Safeguard Properties

Fannie Mae: Lender Letter LL-2019-03: Interest Rate Spread for Fixed-Rate MBS and Servicing Fee Requirements for Fixed-Rate Loans

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Investor Update
March 5, 2019

Source: Fannie Mae

As we continue to prepare for the implementation of the Uniform Mortgage-Backed Security (UMBS™), the Federal Housing Finance Agency (FHFA) has instructed Fannie Mae and Freddie Mac (the GSEs) to undertake activities that promote aligned investor cash flows for their TBA-eligible mortgage-backed securities. Pursuant to FHFA’s instruction we are changing the allowable interest (note) rate spread in fixed-rate MBS and changing the maximum servicing fee permitted for fixed-rate loans.

Interest Rate Spread
For most fixed-rate loans the maximum allowable interest rate is 250 basis points above the pool’s pass-through-rate. We are updating this policy to limit the interest rate for each fixed-rate loan in a pool to no more than 112.5 basis points above the pass-through rate of the pool.

This updated policy is effective for loans delivered into pools with issue dates on or after June 1, 2019.

FHFA has instructed the GSEs to monitor the weighted-average coupon (WAC) of MBS and take actions as appropriate such that MBS WAC would be generally consistent with historical WAC levels. FHFA and the GSEs are working to determine an appropriate target MBS WAC, such as 80 bps or slightly higher (given current guaranty fees and minimum servicing levels).

Servicing Fee
We are updating our servicing fee policies to limit the servicing fee to a maximum of 50 basis points for all fixed-rate loans delivered to us. In other words, the maximum servicing fee shall not be more than 25 basis points above the standard 25 basis point servicing fee. The 50-basis point maximum is inclusive of any lender-paid mortgage insurance (LPMI) premium.

This updated policy is effective for whole loans delivered, and loans delivered into pools with issue dates, on or after June 1, 2019.

NOTE: We will publish these changes in the Selling and Servicing Guides in future updates.

Lenders who have questions about this Lender Letter should contact their Fannie Mae account team.

Carlos T. Perez
Senior Vice President and
Chief Credit Officer for Single-Family

Fannie Mae: Modification Interest Rate Adjustment Update

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Investor Update
March 7, 2019

Source: Fannie Mae

The Fannie Mae Modification Interest Rate is subject to periodic adjustments based on an evaluation of prevailing market rates. The servicer must use the current Fannie Mae Modification Interest Rate indicated below when evaluating a borrower for a conventional mortgage loan modification.

NOTE: As a reminder, the interest rate used to determine the final modification terms must be the same fixed interest rate that was used when determining eligibility for the Trial Period Plan and calculating the Trial Period Plan payment.

Freddie Mac: Industry Letter Announces Updated Requirements Related to Single Security

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Investor Update
March 5, 2019

Source: Freddie Mac

Today, we published an Industry Letter [pdf] as a follow up to the final rule the Federal Housing Finance Agency (FHFA) adopted on February 28, 2019, supporting the Single Security Initiative.

As instructed by FHFA, Freddie Mac and Fannie Mae will modify their pooling practices for fixed-rate mortgages to enhance the fungibility of the Uniform Mortgage-Backed Security™ (UMBS™).

Our Industry Letter announces changes to our requirements to the note rate to coupon spreads and a reduction in the maximum Minimum Contract Servicing Spread for mortgages serving as collateral for UMBS and Mortgage-backed Securities (MBS).

The changes will be effective for mortgages sold under the Freddie Mac fixed-rate Guarantor program and MultiLender Swap program with settlement dates on and after June 3, 2019. These changes will be reflected in the Single-Family Seller/Servicer Guide (Guide) with the publication of a Guide Bulletin in the near future.

Please review our Industry Letter [pdf] for more details.

For more Information on the Single Security Initiative

•Review the Single Security Market Adoption Playbook [pdf]
•Check out our Single Security Readiness Checklist for Seller/Servicers [pdf]
•Visit the Freddie Mac Single Security web page
•Contact your Freddie Mac representative

Freddie Mac: We’re Re-Imagining Servicing with a New Rewards Program, and More

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Investor Update
March 4, 2019

Source: Freddie Mac

Announcing Reimagine Servicing – Innovation Starts Here

At Freddie Mac, we believe in loan servicing by, for and about Servicers. Our journey starts with you – we’ve heard your feedback and we’re using it as the foundation for our innovation roadmap.

Today, we’re launching our Reimagine Servicing initiative, a collective effort to transform the servicing landscape. Imagine greater speed and efficiency in our technology applications, improved data quality and collection methods, and simplified processes. We’re committed to innovating new solutions that improve efficiency and minimize credit losses, while making it easier for you to do business with us.

Over the coming weeks and months, we’ll share more about the Reimagine Servicing journey. Please continue to visit our Servicing web page for the latest news and information about specific projects and technology releases that will transform your day-to-day operations.

Together, let’s Reimagine Servicing.

Recognizing You – A New Servicing Rewards Program

As part of our Reimagine Servicing initiative, we’re proud to recognize Servicers for their successes, since success means we’re moving the industry forward together.

We’ve designed the new Freddie Mac Servicer Honors and Recognition Program (SHARP)SM offering well-deserved rewards and public recognition to our top servicing clients. This program recognizes and rewards Servicer performance through defined metrics, benchmarks and requirements.

No Action Required

If you fall into rank groups 1, 2 or 3 and meet the criteria for receiving an annual rank, you are automatically enrolled to receive rewards through Freddie Mac SHARP.

Effective January 1, 2019, Servicer performance under Freddie Mac SHARP is now tied to financial incentives. Based on a Servicer’s Servicer Success Scorecard annual ranking, you are eligible to receive rewards if certain criteria is met (see ranking specifics).

We recently announced Servicing Guide updates (see the December 12, 2018 Guide Bulletin [pdf] for details), which included the following changes to the Scorecard in relation to Freddie Mac SHARP:

•Revising how Servicers are segmented into rank groups

•Amending weights for the default management metrics.

We’ll provide additional information on these changes in the March Servicing Guide update.

Get SHARP

Access your January 2019 Scorecard (released on February 28, 2019) by logging into the Performance Profile. Don’t have access? Sign up here and start finding ways to improve your servicing performance.

Stay sharp with the latest news and information on our new web page. For questions, please contact your Servicing Relationship Manager (SRM).

HUD: Disaster Assistance for Alabama Tornado Victims

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Investor Update
March 6, 2019

Source: HUD

Foreclosure protection offered to displaced families in Lee County

WASHINGTON – Following the Trump Administration’s major disaster declaration in the wake of this week’s deadly tornado in Alabama, the U.S. Department of Housing and Urban Development (HUD) will provide mortgage relief and other support to homeowners and low-income renters forced from their homes in Lee County, Alabama.

The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in impacted counties. HUD is:

•Providing immediate foreclosure relief – HUD’s automatic 90-day moratorium on foreclosures of Federal Housing Administration (FHA)-insured home mortgages commenced for the counties covered under yesterday’s Presidential declaration on the date of the declaration. For assistance, call your loan servicer or FHA’s Resource Center at 1-800-304-9320;

•Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims whose homes were destroyed or damaged to such an extent that reconstruction or replacement is necessary and are facing the daunting task of rebuilding or buying another home. Borrowers from participating FHA-approved lenders are eligible for 100 percent financing, including closing costs;

•Making insurance available for both mortgages and home rehabilitation – HUD’s Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home; and

•Making information on housing providers and HUD programs available – The Department will share information with the Federal Emergency Management Agency (FEMA) and the State on housing providers that may have available units in the impacted counties. This includes Public Housing Agencies and Multi-Family owners. The Department will also connect FEMA and the State to subject matter experts to provide information on HUD programs and providers.

Read about these and other HUD programs designed to assist disaster victims.

Foreclosure Reform Bills Proposed in New Jersey

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Updated 4/30/19: The office of New Jersey Governor Phil Murphy issued a press release outlining the approval of a package of bills aimed at improving foreclosure rates across the state.

Included is A4997 (Mortgage Servicers Licensing Act), a bill that will require any person acting as a mortgage servicer to obtain a license from the Commissioner of Banking and Insurance for each main office and each branch office where business is conducted.

Press Release (Governor Murphy Signs Legislative Package to Address New Jersey’s Foreclosure Crisis)

Approved Legislation Overview:

• A664 – Codifies the Judiciary’s Foreclosure Mediation Program; dedicates monies from foreclosure filing fees and fines.

• A4997 – “Mortgage Servicers Licensing Act.”

• A4999 – Requires filing of certain creditor contact information with residential mortgage foreclosure complaint and lis pendens.

• A5001 – Revises statute of limitations for residential mortgage foreclosures.

• A5002 – Permits certain planned real estate developments to file certain liens; concerns limited priority of certain liens.

• S3411 – Requires receivership appointment application prior to certain foreclosure actions; requires notice of intention to foreclosure on residential mortgage to be filed within 180 days prior to commencing foreclosure; limits reinstatements of dismissed mortgage foreclosure actions.

• S3413 – Makes certain changes to summary action foreclosure process under “Fair Foreclosure Act.”

• S3416 – Clarifies that “New Jersey Residential Mortgage Lending Act” applies to certain out-of-state persons and involved in residential mortgage lending in the State.

• S3464 – Revises certain procedures for real estate foreclosure sales; alters adjournment of sale process.


Updated 3/25/19: A4999 (concerning residential mortgage foreclosures) passed the New Jersey Senate. The bill aims to require a creditor that files a residential foreclosure complaint to provide contact information for the party responsible for property care with the summons and complaint in Superior Court, and with the lis pendens filed with the office of the county clerk or register of deeds and mortgages.

This bill has substituted S3415.

A4999 Information/Text

Legislation Update
March 4, 2019

Source: New Jersey Legislature

Additional Resources:

NJ Spotlight (Package of Bills Hopes to Knock NJ Out of the Top Spot in Foreclosures)

New Jersey Judiciary (Report of the Special Committee on Residential Foreclosures)

New Jersey
S1244

Status: Reported from Senate Committee with Amendments, 2nd Reading (March 4, 2019)

Legislative Summary
Codifies the Judiciary’s Foreclosure Mediation Program; dedicates monies from foreclosure filing fees and fines.

Source: New Jersey Legislature (S1244 full text/info)


S3411

Status: Senate Amendment (February 21, 2019)

Legislative Summary
Requires notice of intention in residential mortgage foreclosure actions to be filed no more than 180 days prior to commencing foreclosure; limits reinstatements of dismissed mortgage foreclosure actions.

Source: New Jersey Legislature (S3411 full text/info)


S3412

Status: Referred to Senate Budget and Appropriations Committee (February 7, 2019)

Legislative Summary
Requires DCA to produce and maintain database and interactive map concerning residential properties under foreclosure; increases certain recording fees as funding mechanism.

Source: New Jersey Legislature (S3412 full text/info)


S3413

Status: Senate Amendment (February 21, 2019)

Legislative Summary
Makes certain changes to summary action foreclosure process under “Fair Foreclosure Act.”

Source: New Jersey Legislature (S3413 full text/info)


S3415

Status: Senate Amendment (February 21, 2019)

Legislative Summary
Requires filing of certain contact information of creditors with residential mortgage foreclosure complaint and lis pendens.

Source: New Jersey Legislature (S3415 full text/info)

New York Bill Focuses on Abandoned Property Redemption

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Legislation Update
March 1, 2019

Source: The New York State Senate (S.1864 information/text)

Additional Resource:

Times Union (N.Y. state bill would shorten timeline on zombie properties)

S1864 (ACTIVE) – SPONSOR MEMO

FEMA Declared Disaster Alabama

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FEMA Alert
March 5, 2019

FEMA issued a Presidential Major Disaster Declaration for areas in Alabama affected by severe storms, straight-line winds and tornadoes that took place March 3, 2019. The following county is eligible for assistance:

Individual/Public Assistance

  • Lee

FEMA Release: Declared Disaster for Alabama

ZIP Code List for FEMA Declared Disaster for Alabama

MapAlert Disaster Viewer

Additional Resources

FEMA’s web site

FEMA’s Disaster Declaration Process

Safeguard Properties Industry Alerts

HUD Moratorium on Foreclosure

VA’s Policy Regarding Natural Disasters

Freddie Mac Disaster Relief Policies

Fannie Mae’s Natural Disaster Relief Policies

FEMA Declared Disaster Washington

Posted on by Safeguard

FEMA Alert
March 4, 2019

FEMA issued a Presidential Major Disaster Declaration for areas in Washington affected by severe winter storms, straight-line winds, flooding, landslides, mudslides and a tornado that took place December 10-24, 2018. The following counties are eligible for assistance:

Public Assistance

  • Clallam
  • Grays Harbor
  • Island
  • Jefferson
  • Mason
  • Pacific
  • Snohomish
  • Whatcom

FEMA Release: Declared Disaster for Washington

ZIP Code List for FEMA Declared Disaster for Washington

MapAlert Disaster Viewer

Additional Resources

FEMA’s web site

FEMA’s Disaster Declaration Process

Safeguard Properties Industry Alerts

HUD Moratorium on Foreclosure

VA’s Policy Regarding Natural Disasters

Freddie Mac Disaster Relief Policies

Fannie Mae’s Natural Disaster Relief Policies

Tornadoes Blow Through Southeast

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Updated 3/5/19: FEMA issued a Presidential Major Disaster Declaration for areas in Alabama affected by severe storms, straight-line winds and tornadoes that took place March 3, 2019.

Link to FEMA Alert

Updated 3/4/19: Alabama Governor Kay Ivey requested an expedited FEMA Major Disaster Declaration for areas affected by severe storms, straight-line winds and tornadoes beginning on March 3, 2019 and continuing.

Link to media coverage

Link to associated ZIP code list

NOTE: This has not yet been declared a FEMA Disaster.

Updated 3/4/19: Alabama Governor Kay Ivey issued a supplemental emergency declaration to include all counties not previously covered in earlier proclamations made in February.

Link to declaration

Link to associated ZIP code list

NOTE: This is independent from any FEMA Declared Disaster.

Updated 3/4/19: Georgia Governor Brian P. Kemp issued an emergency declaration for three counties impacted by severe weather.

Link to declaration

Link to associated ZIP code list

NOTE: This is independent from any FEMA Declared Disaster.

Disaster Alert
March 4, 2019

Source: USA Today

Approximate locations containing home damage:

Alabama
Beauregard (Lee County, 62568)

Florida
Baum Road Community (Baum Road and Steeds Run; Leon County, 32317)

Georgia
Cairo (Grady County, 31728, 39827, 39828)
Talbotton (Talbot County, 31827)

NOTE: This has not yet been declared a FEMA Disaster.

First responders in Lee County, Alabama, were picking through the rubble Monday of a devastating tornado that killed at least 23 people and injured dozens more.

The tornado smashed homes and toppled power lines and a massive steel cell tower. The twister was part of a brutal system packing strong winds that also roared through parts of South Carolina, Georgia and Florida.

“The devastation is incredible,” Lee County Sheriff Jay Jones said. Jones said several people were missing, but that it was not clear whether they actually had fled the area without telling all of their concerned friends and family members.

For full article, please click the source link above.