Safeguard Properties

VA Circular 26-17-28: Special Relief Following Hurricane Maria

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Updated 3/1/17: The U.S. Department of Veterans Affairs (VA) issued a change to Circular 26-17-28 that extends the established moratorium on foreclosures following Hurricane Maria.

Link to Circular 26-17-28 Change 2

Updated 10/23/17: The U.S. Department of Veterans Affairs (VA) issued a change to Circular 26-17-28 that extends the established moratorium on foreclosures following Hurricane Maria.

Link to Circular 26-17-28 Change 1

Investor Update
September 27, 2017

1. Purpose. This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by Hurricane Maria, 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. (http://www.benefits.va.gov/homeloans/documents/docs/va_policy_regarding_natural_disasters.pdf)

2. Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of Hurricane Maria. 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 (http://www.benefits.va.gov/homeloans), that holders establish a 90-day moratorium from the date of a disaster on initiating new foreclosures on loans affected by major disasters. VA regulation 38 CFR 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 Hurricane Maria, 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, 2018.

By Direction of the Under Secretary for Benefits

Jeffrey F. London
Director, Loan Guaranty Service

Source: VA

Additional Resource:

Safeguard Properties (Hurricane Maria All Client Alert summary page)

VA Circular 26-17-27: Special Relief Following Hurricane Irma

Posted on by Safeguard

Updated 3/1/17: The U.S. Department of Veterans Affairs (VA) issued a change to Circular 26-17-27 that extends the established moratorium on foreclosures following Hurricane Irma.

Link to Circular 26-17-27 Change 2

Updated 10/23/17: The U.S. Department of Veterans Affairs (VA) issued a change to Circular 26-17-27 that extends the established moratorium on foreclosures following Hurricane Irma.

Link to Circular 26-17-27 Change 1

Investor Update
September 18, 2017

1. Purpose. This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by Hurricane Irma, 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. (http://www.benefits.va.gov/homeloans/documents/docs/va_policy_regarding_natural_disasters.pdf)

2. Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of Hurricane Irma. 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 (CFR), section 36.4311 allows the reapplication of prepayments to cure or prevent a default. Also, 38 CFR 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 (http://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster on initiating new foreclosures on loans affected by major disasters. VA regulation 38 CFR 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. Because of the widespread impact of Hurricane Irma, 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, 2018.

By Direction of the Under Secretary for Benefits

Jeffrey F. London
Director, Loan Guaranty Service

Source: VA

Additional Resource:

Safeguard Properties (Hurricane Irma All Client Alert summary page)

USDA: Electronic Status Reporting Implementation Date Delayed Three Months!

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Investor Update
September 1, 2017

This notification is to convey to USDA Guaranteed Loan Servicers that the implementation date for the required use of the new electronic status reporting enhancements will be delayed by three months from April 1, 2018 to July 1, 2018.
 
USDA Rural Development (RD) will adopt enhanced Electronic Status Reporting (ESR) on July 1, 2018.  At that time, all loan servicers are required to report for the period ending June 30, 2018 using the new Electronic Data Interchange (EDI) format or by using the web screens on USDALINC (https://usdalinc.sc.egov.usda.gov/RHShome.do).  Below are the new business reporting requirements: 
1.    Monthly default status reporting will be enhanced to add additional data fields and default status codes.  The current EDI Transaction Set 264 will continue to be used but will require many new data fields.  The new default reporting structure will be similar to that of the Federal Housing Administration (FHA).
2.    Quarterly status reporting will change in frequency from quarterly reporting to monthly reporting.  The EDI Transaction set 203 will continue to be used and will not change in structure.  However, the statuses of all loans will now be required on a monthly basis. 
3.    Loan servicers will now be required to perform corrections of their status reports, similar to what is required by FHA.
 
For loan servicers with a small USDA Rural Development portfolio, the web screen method of reporting will still be available in lieu of the EDI transaction sets.
 
The new “ESR Implementation Guide for the July 1, 2018 Effective Date” and “ESR Implementation Guide Release Notes” are located on the USDA LINC Training and Resource Library.  Loan servicers will need to review the Implementation Guide and develop their EDI files in accordance with the requirements in the guide.
 
Online user training and an ESR User Guide (for the web screen reporting and correction of the status reports) will be provided on the USDA LINC Training & Resource Library in the near future.  An announcement will be sent out on the GovDelivery SFH Guaranteed Servicing email updates once the training and User Guide are available.  To subscribe to the SFH Guaranteed Servicing email topic, please click here. 
 
We ask that loan servicers review both the “ESR Implementation Guide for the July 1, 2018 Effective Date” and “ESR Implementation Guide Release Notes” and should you have any questions or comments, please forward them to the following email boxes based on subject matter content:

For all other inquiries, you may contact us at 202-720-1452.
 
All Loan servicers should be preparing for the reporting changes.  Many lenders may now decide to move from Web reporting to EDI reporting.  Please note that reports using the new format cannot be reported prior to July 1, 2018.  All reporting prior to July 1, 2018 must be in the current reporting format.
Please note that all ESR users are required to have a USDA e-Authentication Level 2 ID.  As part of the Level 2 e-Authentication set up, users will be prompted with security questions.  Users must remember their security questions and answers as they will be required should your password need reset.

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)

Source: USDA

HUD: Pamela Hughes Patenaude Sworn in as Deputy Secretary by Vice President Mike Pence

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Investor Update
September 27, 2017

WASHINGTON – Pamela Hughes Patenaude is the new Deputy Secretary at the U.S. Department of Housing and Urban Development (HUD). Following her confirmation by the U.S. Senate on September 14th, Vice President Mike Pence administered the oath of office to Patenaude yesterday evening.

As HUD’s second-ranking official, Deputy Secretary Patenaude will lead the Department’s Disaster Management Group (DMG) and will play a primary leadership and operational role in coordinating the long-term recovery efforts following Hurricanes Harvey, Irma and Maria. She will direct 16 program and support offices within HUD to help state and local governments design and execute their recovery plans to rebuild damaged housing, businesses and critical infrastructure.

Deputy Secretary Patenaude has an extensive housing and community development background and served as HUD’s Assistant Secretary for Community Planning and Development during the George W. Bush Administration, providing leadership during the recovery efforts in the wake of Hurricanes Katrina, Rita and Wilma.

For interview requests, contact HUD Public Affairs at (202) 708-0685.

Source: HUD

OCC: Federal and State Banking Agencies Issue Statement on Supervisory Practices Regarding Financial Institutions and Borrowers Affected by Hurricane Irma

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Investor Update
September 6, 2017

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and state bank regulators recognize the serious impact of Hurricane Irma on the customers and operations of many financial institutions and will provide regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions in the affected areas to meet the financial services needs of their communities.

A complete list of the affected disaster areas can be found at www.fema.gov.

Lending: Bankers should work constructively with borrowers in communities affected by Hurricane Irma. The agencies realize that the effects of natural disasters on local businesses and individuals are often transitory, and prudent efforts to adjust or alter terms on existing loans in affected areas should not be subject to examiner criticism. In supervising institutions affected by the hurricane, the agencies will consider the unusual circumstances they face. The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound banking practices as well as in the public interest.

Community Reinvestment Act (CRA): Financial institutions may receive CRA consideration for community development loans, investments, or services that revitalize or stabilize federally designated disaster areas in their assessment areas or in the states or regions that include their assessment areas. For additional information, institutions should review the Interagency Questions and Answers Regarding Community Reinvestment at https://www.ffiec.gov/cra/qnadoc.htm.

Investments: Bankers should monitor municipal securities and loans affected by the hurricane. The agencies realize local government projects may be negatively affected. Appropriate monitoring and prudent efforts to stabilize such investments are encouraged.

Regulatory Reporting Requirements: Institutions affected by Hurricane Irma that expect to encounter difficulty meeting the agencies’ reporting requirements should contact their primary federal regulatory agency to discuss their situation. The agencies do not expect to assess penalties or take other supervisory action against institutions that take reasonable and prudent steps to comply with the agencies’ regulatory reporting requirements if those institutions are unable to fully satisfy those requirements because of the effects of Hurricane Irma. The agencies’ staffs stand ready to work with affected institutions that may be experiencing problems fulfilling their reporting responsibilities, taking into account each institution’s particular circumstances, including the status of its reporting and recordkeeping systems and the condition of its underlying financial records.

Publishing Requirements: The agencies understand that the damage caused by the hurricane may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities under various laws and regulations. Institutions experiencing disaster-related difficulties in complying with any publishing or other requirements should contact their primary federal and state regulatory agency.

Temporary Banking Facilities: The agencies understand that many banks face power, telecommunications, staffing and other challenges in re-opening facilities after the hurricane. In cases in which operational challenges persist, the appropriate primary federal and state regulator will expedite any request to operate temporary banking facilities to provide more convenient availability of services to those affected by the hurricane. In most cases, a telephone notice to the primary federal and state regulator will suffice initially. Necessary written notification can be submitted later.

Media Contacts

Federal Reserve: Darren Gersh 202-452-2955
CSBS: Jim Kurtzke 202-728-5733
FDIC: Barbara Hagenbaugh 202-898-7192
OCC: William Grassano 202-649-6870

Source: OCC

Additional Resource:

Safeguard Properties (Hurricane Irma All Client Alert summary page)

HUD: FHA INFO #17-40: HECM: FHA Systems Updates for September 18th Release

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Investor Update
September 13, 2017

In this Announcement:

  • HECM: FHA Systems Updates for September 18th Release
  • HECM Counseling Certificate Changes
  • HECM Final Rule Policies Reminder
  • Training Opportunities

Source: HUD (FHA INFO #17-40 full version)

HUD Announces Disaster Assistance for U.S. Virgin Island Storm Victims

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Investor Update
September 21, 2017

Foreclosure protection offered to displaced families

WASHINGTON – U.S. Housing and Urban Development today announced HUD will speed federal disaster assistance to the U.S. Virgin Islands and provide support to homeowners and low-income renters forced from their homes due to Hurricane Maria.

Today, President Trump issued a major disaster declaration for St. Croix Island. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living on this island.

HUD is:

  • Granting immediate foreclosure relief – HUD granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. There are approximately 593 FHA-insured U.S. Virgin Islands homeowners living in these impacted islands.
  • Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes 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;
  • Information on housing providers and HUD programs – The Department will share information with 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.
  • Assisting the U.S. Virgin Islands and local governments in re-allocating existing federal resources toward disaster relief – HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars in annual formula funding to address critical needs, including housing and services for disaster victims. HUD is currently contacting State and local officials to explore streamlining the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing; and,
  • Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

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

Source: HUD

Additional Resource:

Safeguard Properties (Hurricane Maria All Client Alert summary page)

HUD Announces Disaster Assistance for U.S. Virgin Island Storm Victims

Posted on by Safeguard

Investor Update
September 18, 2017

Foreclosure protection offered to displaced families

WASHINGTON – U.S. Housing and Urban Development today announced HUD will speed federal disaster assistance to the U.S. Virgin Islands and provide support to homeowners and low-income renters forced from their homes due to Hurricane Irma.

Last week, President Trump issued a major disaster declaration for St. John and St. Thomas Islands. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in this county.

HUD is:

  • Granting immediate foreclosure relief – HUD granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. There are approximately 593 FHA-insured U.S. Virgin Islands homeowners living in these impacted islands.
  • Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes 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;
  • Information on housing providers and HUD programs – The Department will share information with 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.
  • Assisting the U.S. Virgin Islands and local governments in re-allocating existing federal resources toward disaster relief – HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars in annual formula funding to address critical needs, including housing and services for disaster victims. HUD is currently contacting State and local officials to explore streamlining the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing; and,
  • Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

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

Source: HUD

Additional Resource:

Safeguard Properties (Hurricane Irma All Client Alert summary page)

HUD Announces Disaster Assistance for Puerto Rico Storm Victims

Posted on by Safeguard

Investor Update
September 21, 2017

Foreclosure protection offered to displaced families

Today, President Trump issued a major disaster declaration for Aguas Buenas, Aibonito, Arecibo, Arroyo, Barceloneta, Barranquitas, Bayamón, Caguas, Canóvanas, Carolina, Cataño, Cayey, Ceiba, Ciales, Cidra, Coamo, Comerio, Corozal, Culebra, Dorado, Fajardo, Florida, Guayama, Guaynabo, Gurabo, Humacao, Jayuya, Juana Díaz, Juncos, Las Piedras, Loíza, Luquillo, Manati, Maunabo, Morovis, Naguabo, Naranjito, Orocovis, Patillas, Ponce, Rio Grande, Salinas, San Juan, San Lorenzo, Santa Isabel, Toa Baja, Toa Alta, Trujillo Alto, Utuado, Vega Alta, Vega Baja, Vieques, Villalba and Yabucoa municipalities.

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

  • Granting immediate foreclosure relief – HUD granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. There are approximately 117,254 FHA-insured Puerto Rico homeowners living in these impacted municipalities.
  • Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes 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;
  • Information on housing providers and HUD programs – The Department will share information with 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.
  • Assisting the Commonwealth of Puerto Rico and local governments in re-allocating existing federal resources toward disaster relief – HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars in annual formula funding to address critical needs, including housing and services for disaster victims. HUD is currently contacting State and local officials to explore streamlining the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing; and,
  • Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

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

Source: HUD

Additional Resource:

Safeguard Properties (Hurricane Maria All Client Alert summary page)

HUD Announces Disaster Assistance for Puerto Rico Storm Victims

Posted on by Safeguard

Investor Update
September 11, 2017

Foreclosure protection offered to displaced families

WASHINGTON – U.S. Housing and Urban Development today announced HUD will speed federal disaster assistance to the Commonwealth of Puerto Rico and provide support to homeowners and low-income renters forced from their homes due to Hurricane Irma.

Yesterday, President Trump issued a major disaster declaration for Culebra and Vieques municipalities. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in this county.

HUD is:

  • Granting immediate foreclosure relief – HUD granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages;
  • Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes 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;
  • Information on housing providers and HUD programs – The Department will share information with 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.
  • Assisting the Commonwealth of Puerto Rico and local governments in re-allocating existing federal resources toward disaster relief – HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars in annual formula funding to address critical needs, including housing and services for disaster victims. HUD is currently contacting State and local officials to explore streamlining the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing; and,
  • Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

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

Source: HUD

Additional Resource:

Safeguard Properties (Hurricane Irma All Client Alert summary page)