Source: MHA

In connection with the October 2018 release of the HAMPReporting System, an updated version of the following Data Dictionary was posted on HMPadmin.com:

• HAMP Data Dictionary – 10/01/2018 Release

Source: HUD

Today, the Federal Housing Administration (FHA) is issuing this reminder to mortgagees about its guidance for originating and/or servicing FHA-insured forward and reverse mortgages in locations in the
U.S. and its territories when the President declares it a major disaster area. This declaration is made when natural or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. The following guidance applies to all areas covered by a Presidentially-Declared Major Disaster Area (PDMDA):

• FHA-insured mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster.
• FHA-insured reverse mortgages (HECMs) that become due and payable for reasons other than the death of the last surviving borrower and eligible nonborrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
• In PDMDAs only, HUD provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD’s loss mitigation program.

Mortgagees should review complete servicing guidance in the Single Family Housing Policy Handbook 4000.1 (SF Handbook), Sections III.A.2 and III.A.3.c relating to the servicing of mortgages in PDMDAs.

Mortgagees are reminded that they should begin reaching out to affected borrowers who may require loss mitigation assistance as soon as possible post-disaster. In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review:

• FHA’s 203(h) Mortgage Insurance for Disaster Victims requirements in Section II.A.8.b of the SF Handbook. The 203(h) program allows FHA to insure mortgages for victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.
• FHA’s 203(k) Rehabilitation Mortgage Insurance Program requirements in Section II.A.8.a of the SF Handbook. The 203(k) program provides mortgage financing or refinancing which includes the cost of home repairs – both structural and non-structural – into the loan amount.

Mortgagees can find more information about the policies referenced above and other FHA PDMDA policies on the FHA Resource Center’s Online Knowledge Base.

Quick Links

• Access the SF Handbook in online or portable document format from HUD’s Client Information Policy Systems Housing Handbooks web page at:
  https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh

Resources
Contact the FHA Resource Center:

• Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at www.hud.gov/answers.
• E-mail the FHA Resource Center at answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
• Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: Fannie Mae

Reverse Mortgage Loan Servicing Manual Update

The Reverse Mortgage Loan Servicing Manual has been updated to include changes related to the servicer requirement to pay ground rents, co-op fees and assessments, and property taxes for certain properties in Fannie Mae’s REO inventory. This policy change is applicable to all reverse mortgage loans.

Relieving Servicers of Additional Responsibilities for Paying Escrow-Related Expenses on Acquired Properties

We continue to review our policies in order to relieve servicers of post-foreclosure sale responsibilities, where possible. In 2017, we accepted responsibility to pay property taxes for acquired properties with a foreclosure sale date or final acceptance of an executed Mortgage Release occurring on or after July 1, 2017 for reverse mortgage loans. We are now accepting responsibility to pay property taxes for all acquired properties in REO inventory, including acquired properties with a foreclosure or Mortgage Release date that precedes the mentioned effective dates.

Additionally, to further reduce servicers’ costs and operational risk, Reverse Mortgage Loan Servicing Manual 5-04, Property Management has been further updated to remove the requirement that servicers pay co-op fees and assessments or ground rents for certain acquired properties in Fannie Mae’s REO inventory, except when directed by Fannie Mae.

Effective Date

Fannie Mae will assume responsibility for

• property taxes for all acquired properties effective on October 1, 2018, without regard to the foreclosure sale or Mortgage Release date;
• ground rents for all acquired properties effective on October 1, 2018, without regard to the foreclosure sale or Mortgage Release date; and
• co-op fees and assessments for all acquired properties with a foreclosure sale or Mortgage Release date occurring on or after October 1, 2018.

Contact your Reverse Mortgage Loan Servicing Representative in Fannie Mae’s Single-Family Servicer Support Center at
1-800-2FANNIE (1-800-232-6643) with any questions regarding this Announcement.

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

Source: VA

1. Purpose. This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by Hurricane Florence, and describes measures mortgagees may employ to provide relief. Mortgage servicers and borrowers alike should review VA’s Guidance on Natural Disasters to ensure Veterans receive the assistance they need. (https://www.benefits.va.gov/homeloans/documents/docs/va_policy_regarding_natural_disasters. pdf) or https://www.benefits.va.gov/WARMS/docs/admin26/m26_04/Chapter_21.docx.

2. Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of Hurricane Florence. Careful counseling with borrowers should help determine whether their difficulties are related to this disaster, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, Title 38, Code of Federal Regulations (C.F.R.), section 36.4311 allows the reapplication of prepayments to cure or, prevent a default. Also, 38 C.F.R. 36.4315 allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided conditions in the regulation are satisfied.

3. Moratorium on Foreclosure. Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (https://www.benefits.va.gov/homeloans) that holders establish a 90day moratorium from the date of a disaster on initiating new foreclosures on loans affected by major disasters. VA regulation 38 C.F.R. 36.4324(a)(3)(ii) allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. Due to the widespread impact of the disaster, holders should review all foreclosure referrals to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about impact should be discussed with the VA Regional Loan Center (RLC) of jurisdiction.

4. Late Charge Waivers. VA believes that many servicers plan to waive late charges on affected loans, and encourages all servicers to adopt such a policy for any loans that may have been affected.

5. Credit and VA Reporting. In order to avoid damaging credit records of Veteran borrowers, servicers are encouraged to suspend credit bureau reporting on affected loans. VA will not penalize affected servicers for any late default reporting to VA as a result. Please contact the appropriate RLC with any questions.

6. Activation of the National Guard. Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service.

7. Rescission: This Circular is rescinded October 1, 2019.

By Direction of the Under Secretary for Benefits

Jeffrey F. London
Director, Loan Guaranty Service

Source: Fannie Mae

Hurricane Florence has battered the Carolinas and surrounding areas with historic rainfall and flooding, and remnants of the storm are expected to continue for days. Around this same time last year, Hurricane Harvey pummeled many southern U.S. states and Puerto Rico was devastated by Hurricane Maria, both storms leaving behind unprecedented destruction.

While many individuals respond to natural disasters with kindness and generosity – opening their hearts and their wallets to those in need, providing aid and assistance when it is needed most – some unscrupulous individuals will take advantage of the situation to line their own pockets through fraud.

In the aftermath of Hurricane Maria, the Financial Crimes Enforcement Network (FinCEN), a unit of the U.S. Treasury department, issued an advisory to warn financial institutions about a possible uptick in fraud in disaster areas. FinCEN drew attention to three specific avenues of fraud: Benefits Fraud, Charities Fraud, and Cyber-Related Fraud. It is important to be familiar with each of these scams.

Benefits Fraud

Benefits fraud is when individuals apply for emergency assistance benefits to which they are not entitled. This could include a fraudster lying about his or her circumstances to obtain financial assistance from the government or a nonprofit organization, or a fraudster attempting to wrongly acquire the benefits of a legitimate victim through fraud or theft. Such actions blunt the impact of aid organizations and make it that much harder to help those in need.

Charities Fraud

In the wake of every natural disaster, charities are created to help care for those most in need. Sadly, criminals often seek to exploit charitable entities for their own gain. Their methods can include setting up fraudulent charities and soliciting donations, or attempting to collect money on behalf of legitimate charities, which is then stolen. Such schemes can be perpetrated via many different means such as mailings, door-to-door collections, telephone calls, as well as many others.

Cyber-Related Fraud

FinCEN’s 2017 advisory warned that cyber criminals often take advantage of public interest during natural disasters to conduct fraud and to spread malware. Their approach can be as simple as setting up a website that claims to support the victims of a given tragedy, but in reality steals money and personal information from donors. Many fraudsters attempt to mimic the website of a legitimate relief organization to make their efforts that much harder to detect. In addition, phishing attempts typically increase in the wake of natural disasters, as criminals seek to acquire people’s personal information via social engineering.

In addition to the disaster-related fraud schemes described by FinCEN, two others have become particularly common in areas affected by natural disasters – Loan Modification and Repair fraud – which target homeowners affected by disaster.

Loan Modification Fraud

With a Loan Modification scam, fraudsters will seek out mortgage borrowers affected by a natural disaster and promise a loan modification or forbearance for a fee. Once they collect the fee, however, the fraudsters are never heard from again.

Repair Fraud

With a Repair Fraud scam, fraudsters promise to make repairs to damaged homes. This is especially attractive to those affected by the natural disasters, as repair contractors are often difficult to find given the extensive damage in disaster areas. Once again, however, a fee to begin the work is collected, then the fraudsters disappear.

It is important for mortgage borrowers to deal only with official, authorized personnel regarding their loan or their home. Loan modifications and forbearances can only come from a borrower’s servicer, and all repair work should go through official, documented channels.

Regardless of whether you are a homeowner recovering from a natural disaster, a financial institution working to serve those affected, or a concerned individual wanting to help, we urge you to be cautious. And if you suspect disaster-related fraudulent activity, please report it. Suspected fraud regarding a Fannie Mae loan should be reported to Fannie Mae – please visit our website for contact information and other resources. Additionally, the FinCEN advisory contains guidance for financial institutions on reporting fraud to the government, while individuals can contact the Department of Justice to report disaster-related fraud.

Jennifer Horne
Vice President for Anti-Fraud and Anti-Money Laundering

September 18, 2018

Source: Freddie Mac

Please review Single-Family Seller/Servicer Guide (Guide) Bulletin 2018-14 for important updates for Servicing Freddie Mac loans. This Guide Bulletin:

• Updates borrower evaluation notices and solicitation letters.
• Announces a new temporary reimbursement process for property inspections related to insurance loss settlements.
• Provides updates related to the Investor Reporting Change Initiative.
• Updates our reporting requirements for third-party foreclosure sale redemptions.

For details on these updates and other changes and reminders, please read Guide Bulletin 2018-14[PDF].