Freddie Mac: Confirmation of Disaster Relief Policies as Hurricane Florence Approaches

Source: Freddie Mac

MCLEAN, Va., Sept. 12, 2018 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today reminded Servicers of its disaster relief policies for borrowers who have been affected by Hurricane Florence. Freddie Mac’s disaster relief options are available to borrowers whose homes or places of employment are located in presidentially-declared Major Disaster Areas where federal individual assistance programs are made available to affected individuals and households.

In areas where FEMA has not yet made individual assistance available, mortgage servicers may immediately leverage Freddie Mac’s short-term forbearance programs to provide mortgage relief to their borrowers that have been affected by the hurricane.

“It is important for those in the Carolinas and nearby states to focus on their safety as Hurricane Florence approaches,” said Yvette Gilmore, Freddie Mac’s Vice President of Single-Family Servicer Performance Management. “Once out of harm’s way, we strongly encourage homeowners whose homes or places of employment have been impacted by Hurricane Florence to call their mortgage Servicer—the company to which borrowers send their monthly mortgage payments—to learn about available relief options. We stand ready to ensure that mortgage relief is made available.”

News Facts:

  • Freddie Mac disaster relief policies authorize mortgage servicers to help affected borrowers in eligible disaster areas: those federally-declared Major Disaster Areas where federal individual assistance programs have been extended. A list of these areas can be found on the FEMA’s website.
  • Freddie Mac mortgage relief options for affected borrowers in eligible disaster areas include:
    Suspending foreclosures by providing forbearance for up to 12 months;
    Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and
    Not reporting forbearance or delinquencies caused by the disaster to the nation’s credit bureaus.
  • Freddie Mac is reminding servicers to consider borrowers who are impacted by the storm, but who live and work outside of an eligible disaster area, for Freddie Mac’s standard relief policies, which include forbearance and mortgage modifications.
  • Affected borrowers should immediately contact their mortgage servicer—the company to which they send their monthly mortgage payment.
  • See http://www.freddiemac.com/singlefamily/service/natural_disasters.html for a description of Freddie Mac disaster relief policies.

FHFA: Refinance Report – July 2018

Source: FHFA

July 2018 Highlights

  • Total refinance volume decreased in July 2018 as mortgage rates in June remained above the levels observed in 2017.  Mortgage rates decreased in July: the average interest rate on a 30-year fixed rate mortgage fell to 4.53 percent from 4.57 percent in June.

In July 2018:

  • Borrowers completed 696 refinances through HARP, bringing total refinances from the inception of the program to 3,491,836.
  • HARP volume represented 1 percent of total refinance volume.
  • Eight percent of the loans refinanced through HARP had a loan-to-value ratio greater than 125 percent.
  • Year to date through July 2018:
  • Borrowers with loan-to-value ratios greater than 105 percent accounted for 16 percent of the volume of HARP loans.
  • Thirty-three percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
  • HARP refinances represented 3 percent of total refinances in Illinois compared to 1 percent of total refinances nationwide over the same period.
  • Borrowers who refinanced through HARP had a lower delinquency rate compared to borrowers eligible for HARP who did not refinance through the program.
  • Ten states accounted for over 70 percent of the nation’s HARP eligible loans with a refinance incentive as of March 31, 2018.

Attachments: Refinance Report – July 2018

Gas Explosions Burn Homes in Massachusetts

Industry Alert
September 14, 2018

Source: CNN

(CNN) – Massachusetts authorities on Friday warned still-stunned residents of three towns north of Boston that the return normalcy could take time following a string of deadly gas explosions that set homes ablaze, forced evacuations and left one person dead.

Hundreds of natural gas technicians were to descend on the towns of Lawrence, Andover and North Andover over the coming days to restore gas service safely before electricity could be turned on, state officials said.

“Utility technicians must do their jobs in order to make sure everyone has a safe place to return to,” Gov. Charlie Baker told reporters Friday. “This will not be an easy process and we ask for continued patience.”

Kurt Schwartz, director of the Massachusetts Emergency Management Agency, said, “How long is it going to take? As long as it takes. … We don’t know today how long this will take.”

The investigation into the cause — involving the National Transportation Safety Board and other federal agencies — is in its early stages, officials said.

“Once the utilities secure the affected areas we’ll work with the federal government to investigate how this occurred and who should be held accountable for the results and actions,” Baker said.

On Thursday evening, homes erupted in flames across the three towns, consumed by more than 60 suspected gas fires.

“It looked like Armageddon, it really did,” Andover Fire Rescue Chief Michael B. Mansfield said.

One house in Lawrence exploded, sending the chimney flying. It crashed into a nearby car, fatally wounding a teenager who was inside. Leonel Rondon, 18, and two of his friends were in the car when the debris struck, his family told CNN affiliate WHDH. He later died at the hospital, authorities said.

Also in Lawrence, a boiler inside Ra Nam’s house caught fire, he told CNN affiliate WCVB.

Minutes later, he said he heard a loud booming sound from his neighbor’s house. Three people rushed out. About 25 people, including two firefighters, were wounded, officials said.

“This has been an overwhelming event,” Mansfield said. “I have been in the fire service for almost 39 years and I have never seen anything like this in my entire career.”

Gas, power shut off

Gas technicians and first responders went door-to-door reviewing thousands of homes in Lawrence, Andover and North Andover and shutting down gas mains.

Officials were also shutting down power in the three towns, Massachusetts State Police said Thursday evening, which confirmed at least 70 responses to fire, explosions and gas odor reports. About 18,000 customers were without power.

The blazes left 8,000 people unable to go home Thursday. A middle school in North Andover and a senior center in Andover were set up for evacuees, according to state police.

Schools were to be closed Friday in Lawrence and Andover. All state offices in the three towns were also closed, and nonemergency employees were told to stay home.

The NTSB sent a team Friday to investigate what “appears to be multiple explosions involving (a) natural gas pipeline in the Merrimack Valley area of Massachusetts,” NTSB Chairman Robert Sumwalt said.

Sumwalt said his agency would look at “the design of the pipeline system, any maintenance or upgrades being done or in process of being done on the pipeline. The integrity management system of the pipeline operator Columbia Gas. We’ll look at the emergency response, the system safety program of the pipeline operator.”

“Our mission is to find out what happened, so that we can learn from it and keep it from happening again,” he said.

Thousands can’t go home

Information about the full extent of the damage was not immediately available Thursday night, and authorities cautioned it was “far too early to speculate” on the cause of the explosions.

Earlier Thursday before the fires broke out, the utility company that services the area announced it would be upgrading natural gas lines in neighborhoods across the state.

“Weather permitting, work will take place Monday through Friday,” Columbia Gas said in a statement. Andover, North Andover and Lawrence were included in the planned projects.

Gas service had been interrupted for 250 customers in Lawrence last month due to a line hit by a third party, according to the company. It’s unclear if that incident was related to Thursday’s fire and explosions.

The governor said he urged Columbia Gas to develop a “comprehensive safety inspection plan.”

Lawrence Mayor Daniel Rivera said residents won’t be allowed to return home until crews inspect every home and make sure there are no more gas leaks.

“We are not sure that’s going to be anytime soon. Make plans for at least between now and this time tomorrow,” Rivera said early Friday.

The explosions and emergency response caused Amtrak to cancel four train routes between Boston and Maine.

Utility works with officials to ‘investigate this incident’

In a statement Friday, Columbia Gas said crew members are working to restore power with the help of other utility companies.

“Our thoughts are with the community and everyone impacted by yesterday’s tragic incident. We are focused on providing as much support as possible to our customers, residents and communities,” the company said in the statement.

Columbia Gas also said it’s working with officials to “investigate this incident in order to understand its cause.”

CNN’s Rob Frehse and Kristina Sgueglia contributed to this report.

HUD: FHA INFO #18-40: Reminder — Guidance for FHA-Approved Mortgagees and Servicers Regarding Presidentially-Declared Major Disaster Areas

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

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.

Fannie Mae Reverse Mortgage Loan Servicing Manual Announcement RVS-2018-03

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

VA: Circular 26-18-18: Special Relief Following Hurricane Florence

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

Fannie Mae: Don’t Let Fraud Add to the Pain of a Natural Disaster

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

FHLMC Guide Bulletin 2018-14: Servicing Updates

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].

USDA: Servicing Relief to Borrowers Affected by Hurricane Florence

Source: USDA

This announcement outlines relief measures loan holders and loan servicers should implement to assist USDA Rural Development Section 502 Single Family Housing Guaranteed Loan Program (SFHGLP) borrowers affected by Hurricane Florence. Homeowners impacted by the hurricane may be eligible for temporary relief and the determination of eligibility may require a property inspection. Due to the magnitude and aftermath of the hurricane, loan servicers must inspect properties that secure SFHGLP loans to ascertain the extent of damage and the occupancy status, particularly if contact has not yet been made with the borrower.

Loan servicers seeking to assist SFHGLP borrowers may pursue any of the relief options referenced in the following USDA guidance. Complete details outlining “Assistance in Natural Disasters” is located in Chapter 18, Section 4, 7 CFR 3555.307 of the SFHGLP Handbook.

1. FORBEARANCE: USDA Rural Development encourages SFHGLP loan servicers to extend forbearance alternatives to borrowers in distress as a result of Hurricane Florence. Careful and precise communication with borrowers should help determine whether their difficulties are directly or indirectly related to Hurricane Florence, or whether they stem from other sources which must be addressed.
2. FORECLOSURE SUSPENSION: Although the loan servicer is ultimately responsible for determining when to initiate foreclosure, USDA Rural Development requires that holders establish a 90-day suspension from the date the President declared the disaster on foreclosure actions involving properties or the borrower’s place of employment affected by Hurricane Florence. The properties should also be in Presidentially declared disaster areas designated through the Federal Emergency Management Agency (FEMA) as eligible for individual assistance. The foreclosure suspension applies to the initiation of new foreclosure actions and to foreclosure actions already in process.
3. DOCUMENTATION: Holders and loan servicers should fully document their decisions when loss mitigation servicing actions are provided.

Questions regarding this announcement may be directed to SFHGLP in the Rural Housing National Office at 202-720-1452.

Help Resources

Policy Questions
Customer Service Center
Phone: 866-550-5887
Single Family Housing Guaranteed Loan Division
Phone: 202-720-1452

USDA ITS Service Desk Support Center
For e-Authentication assistance
Email: eAuthHelpDesk@ftc.usda.gov
Phone: 800-457-3642, option 1 (USDA e-Authentication Issues)

Rural Development Help Desk
For GUS system, outage or functionality assistance
Email: RD.HD@STL.USDA.GOV
Phone: 800-457-3642, option 2 (USDA Applications); then option 2 (Rural Development)