Safeguard Properties

Fannie Mae: Announcement SVC-2017-01: Servicing Guide Updates

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Investor Update
January 18, 2017

The Servicing Guide has been updated to include changes related to the following:

  • Investor Reporting Requirements*
  • Retirement of Non-Eligible List*
  • Miscellaneous Revision

* Policy change not applicable to reverse mortgage loans.

Read the Announcement for full details.

For a summary of key updates in this Servicing Guide Announcement, view the video presented by Bill Cleary, Vice President of Single-Family Servicing Policy & Solutions.

Changes to Investor Reporting: Take charge of your February 1 transition!

Have you visited the Fannie Mae Changes to Reporting page recently? Several documents were updated with new information including Process Requirements, Detailed Scenarios, FAQs, and more to support your transition. For details about the changes that must be implemented by servicers as of February 1, see the Release Notes. Review archived webinar materials (just released), and don’t forget live webinars are still open through January.

More Simple. More Certain. Learn more at the IMB!

Join us at the upcoming MBA’s Independent Mortgage Bankers Conference (January 23-27) to learn more about our Day 1 Certainty™ program, and how we’re working to help you achieve your business goals. Our team will be on hand — and easy to find — to answer questions and talk about the opportunities ahead.

Recent Tweets

Shared housholds are impacting #housing. @QuickenLoans has more:
https://t.co/FFypFmYXAR

January 17
 
We’re using #AI to become more efficient and improve how we deliver for our customers. Via @WSJ #technology:
http://on.wsj.com/2jFxnY0

January 17
 
Source: Fannie Mae

CFPB’s Final Mortgage Servicing Rule Implementation Possibly Delayed

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Investor Update
January 25, 2017

Possibly delayed 60 days for review by Trump administration
 
The implementation date of the Consumer Financial Protection Bureau’s final mortgage servicing rule lies in question after the Trump administration announced a freeze on federal regulations.

After a nearly four-month delay since the CFPB finished the final mortgage servicing rule, the Office of the Federal Register finally published the rule on Oct. 19, meaning it would go into effect one year later on Oct. 19, 2017.

While the extra time to adjust to the rule isn’t a bad thing, Nanci Weissgold, a member of Alston & Bird’s Financial Services & Products Group, said, “Given the operational complexities in implementing these rules, servicers should not delay in understanding the requirements and developing an implementation plan.”

The implementation date, however, could be delayed even further due to the regulatory freeze announced by Reince Priebus, assistant to the president and chief of staff, last Friday.

Here’s the section of the announcement that pertains to the servicing rule:

With respect to regulations that have been published in the OFR but have not taken effect, as permitted by applicable law, temporarily postpone their effective date for 60 days from the date of this memorandum, subject to the exceptions described in paragraph 1, for the purpose of reviewing questions of fact, law, and policy they raise.  Where appropriate and as permitted by applicable law, you should consider proposing for notice and comment a rule to delay the effective date for regulations beyond that 60-day period.  In cases where the effective date has been delayed in order to review questions of fact, law, or policy, you should consider potentially proposing further notice-and-comment rulemaking. 

The exceptions listed in the first paragraph include: Emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters, or otherwise.

But the situation isn’t so clear-cut for the CFPB. According to the Consumer Financial Services Review blog post by Mayer Brown Lawyers Laurence Platt and Joy Tsai, “The newly announced freeze on federal regulations does not appear to apply across the board.  ‘Independent regulatory agencies,’ such as the Consumer Financial Protection Bureau, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission may be excluded from that moratorium.”

In a recent interview with The Wall Street Journal, “Cordray declined to answer questions about how a Trump order to freeze new regulations would affect the bureau’s planned rules. He said bureau lawyers are evaluating the directive signed Friday and how it might apply to independent agencies such as the CFPB.”

The Mayer Brown blog post noted, “It is too soon to tell if any particular ‘independent regulatory agency’ believes that it is exempt from the freeze or, even if it is, it nevertheless will honor the memorandum’s spirit.”

While there are several issues such as debt collection and payday lending that the bureau has identified as part of its rulemaking agenda, there are only two rules currently published but not yet effect in the Federal Register that this freeze applies to.

The final mortgage servicing rule is one and the other is the rule on Prepaid Accounts under the Electronic Fund Transfer Act and Truth in Lending Act, published Nov. 22, 2016 and effective Oct. 1, 2017.

Source: HousingWire

CFPB Updates Congress on Mortgage Industry Rules

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Investor Update
January 9, 2017

Three of the initiatives by the Consumer Financial Protection Bureau (CFPB) that have had the biggest impact on the mortgage industry—the TILA-RESPA Integrated Disclosure (TRID) rule (a.k.a. the Know Before You Owe, or KBYO rule), the updated Home Mortgage Disclosure Act (HMDA) rule, and the August 2016 updates to the mortgage servicing rules were highlighted in a report on the Bureau’s activities from Q4 2015 to Q3 2016.

In its recently-released fourth report to the House and Senate Committees on Appropriations coving October 1, 2015, through September 30, 2016, the Bureau laid out some of the materials and helps it provided during that 12-month period to assist institutions implement those three initiatives.

“As the Bureau has issued regulations to implement Dodd-Frank Act requirements, it has focused intently on supporting the implementation process for these rules with both industry and consumers,” CFPB stated in the report. “The Bureau has provided substantial implementation support for these regulations, including engaging in public outreach, speaking at conferences, and publishing guides, summaries, charts, webinars, and other resources.”

The implementation of TRID, which went into effect on October 3, 2015, caused no small amount of consternation among mortgage lenders and other stakeholders in the industry. Among the helps the CFPB has provided are several implementation resources that include a plain-language guides containing an overview of TRID’s key aspects, illustrated instructions on how to complete the new Loan Estimate and Closing Disclosure Forms. The Bureau has also conducted several public webinars on TRID to answer specific questions on the implementation and/or interpretation of the rule’s requirements the Bureau has received since the rule went into effect.

In July 2016, the Bureau proposed updates to TRID aimed at providing greater clarity and certainty surrounding the rule.

“The proposed changes would augment implementation of the KBYO rule, which took effect in October 2015, and further help to facilitate compliance within the mortgage industry,” CFPB stated. “Bureau staff continues to engage in outreach and market monitoring activities to identify implementation issues as they arise, and provide informal oral guidance in response to interpretive inquiries from a myriad of stakeholders.”

The CFPB issued its updated HMDA rule in October 2015 along with resources to help industry stakeholders understand and implement the new rule, including a summary and overview of the final rule, a timeline of the rule’s effective dates, coverage charts for financial institutions to determine if they are HMDA reporters, a summary of reportable data explaining the HMDA data points that are to be collected, recorded, and reported per the updated rule, a compliance guide with a plain-language explanation of the rule, a webinar with an overview of the final HMDA rule, and a number of data submission resources for HMDA filers available on the CFPB’s website.

“In addition to publishing implementation resources, the Bureau continues to engage in extensive outreach activities, including speaking at conferences and other events, to support the implementation of new HMDA mortgage lending data reporting rules and to identify and address implementation issues,” the Bureau said.

The CFPB published a number of resources along with the August 2016 updates to its mortgage servicing rules, including a summary of the new rule, a fact sheet, and a table summarizing how the rule affects small servicers, and a fact sheet explaining the definition of “delinquency” under the new rule and how the new rule applies to TILA-RESPA requirements.

“The Bureau plans provide additional support to facilitate implementation and compliance with the August 2016 amendments to the mortgage servicing rules, and to update the existing compliance guide to reflect the August 2016 amendments,” the CFPB wrote in the report.

Click here to view the CFPB’s full report.

Source: DS News

CFPB Announces Changes to Senior Leadership

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Investor Update
January 5, 2016

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced leadership changes within the Bureau. The positions being announced today are: the Chief of Staff; the Chief Information Officer; the Chief Financial Officer; the Assistant Director of Consumer Lending, Reporting, and Collections Markets; and the Assistant Director for the Office for Servicemember Affairs.

“I am very excited for the new additions we are announcing today to the Bureau’s senior leadership,” said CFPB Director Richard Cordray. “The mix of experience and talent this group brings will provide great value to the Bureau as we continue to work on behalf of consumers everywhere.”

The following individuals were announced today as joining the CFBP leadership team:

Leandra English is returning to the CFPB to serve as the Chief of Staff.  Ms. English has previously served in a number of senior leadership roles at the Bureau, including deputy chief operating officer, acting chief of staff, deputy chief of staff, and deputy associate director of external affairs. Most recently, Ms. English served as the principal deputy chief of staff at the Office of Personnel Management.  Ms. English also served as chief of staff and senior advisor to the deputy director of management at the Office of Management and Budget. Ms. English received her B.A. from New York University and her M.S. from the London School of Economics.

Jerry Horton will serve as the CFPB’s Chief Information Officer. Before joining the Bureau, Mr. Horton worked at the Department of State where he started and led the Office of the Chief Architect for State’s global information presence. Prior to that, Mr. Horton was the chief information officer at the U.S. Agency for International Development and before that held the same role at the U.S. Mint in the Department of the Treasury. Before working in the government, Mr. Horton spent over 20 years in the private sector leading both business and technical functions for a wide variety of startups, two supercomputer manufacturers, and several large corporations. Mr. Horton received his B.S. from the University of Colorado.

Paul Kantwill will serve as the CFPB’s Assistant Director for Servicemember Affairs. Prior to joining the Bureau, Mr. Kantwill served as the director in the Office of Legal Policy, Office of the Under Secretary of Defense, Personnel & Readiness at the Pentagon. In this capacity, Mr. Kantwill was the Department of Defense’s legal policy expert on the financial industry and the effects financial products and services had on military members and their families. Mr. Kantwill had a 25 year military career as an active duty officer in the U.S. Army Judge Advocate General’s Corps, and has served in Afghanistan, and the Persian Gulf. Mr. Kantwill received his B.A. from Loyola University, Chicago and his J.D. from Loyola University, Chicago School of Law. 

John McNamara will serve as the CFPB’s Assistant Director of Consumer Lending, Reporting, and Collections Markets.  Mr. McNamara previously served in the same capacity in an acting role, and before that was the debt collection program manager at the Bureau. Prior to joining the Bureau, Mr. McNamara was the chief marketing officer for LiveVox, a provider of cloud contact center solutions, and was the president, chief executive officer, and co-founder of Fidelis Recovery Solutions, Inc. Mr. McNamara has over 30 years of experience working in the debt collection market. Mr. McNamara received his B.A. and M.B.A. from Kennesaw State University.  

Elizabeth (Eli) Reilly will serve as the CFPB’s Chief Financial Officer. Ms. Reilly previously served as the deputy chief financial officer at the Bureau, joining as one of the agency’s first employees in 2010. Prior to joining the CFPB, Ms. Reilly was a program examiner and acting branch chief at the Office of Management and Budget. Ms. Reilly was also a Peace Corps volunteer in Guinea, West Africa. Ms. Reilly received her B.A. from Wesleyan University and her M.A.L.D. from Tufts University.

Source: CFPB

Bankers Cry Foul Over CFPB’s Five-Star Complaint Rating System

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Investor Update
January 13, 2017

Bankers are trying to stop the Consumer Financial Protection Bureau from allowing consumers to rank how companies handle complaints on a one- to five-star scale and to publish narratives of consumer experiences in an online public database.

The financial services industry is outraged at the proposal, which could go into effect as early as Jan. 29 if approved by the Office of Management and Budget. The OMB has approved all of the CFPB’s past data collection requests, a CFPB spokesman said.

The CFPB wants to allow consumers to rate firms on a five-star scale about how their complaint was handled.

The American Bankers Association and Consumer Bankers Association have asked the OMB’s desk officer for the CFPB to deny the agency’s collection request. They argue that ranking companies based on how they handle consumer complaints would provide “minimal, if any, utility,” because the data would be “prone to misleading impressions.”

“We are disappointed that the bureau seeks to continue and further expand its troubling practice of publishing unreliable information under U.S. Government imprimatur, abusing its status as an agency of the federal government,” wrote Jonathan Thessin, the ABA’s senior counsel for the Center for Regulatory Compliance. The Dec. 28 letter to the OMB also was signed by Kate Larson, the CBA’s vice president and regulatory counsel.

But consumer advocates argue that the five-star rating system allows the free market to police financial companies.

“Market power is one of the most important ways to keep abusive practices in check,” said Lauren Saunders, associate director of the National Consumer Law Center. “And frankly, I think banks should welcome ratings as a way to allow the free market to stop abuses so they don’t need to have another regulation. If the free market can stop abuses, I would think both consumers and businesses will be better off.”

Banks have countered that consumers with complaints would be motivated to give a company a low rating. But Saunders said the CFPB would not allow for fake ratings, which is a problem with private ratings systems generally.

“The only people who can put in ratings are those who have complained and gotten a response from a company,” Saunders said.

The CFPB first proposed using a one- to five-point scale in August by adding a short survey to its consumer complaint portal where consumers could rate a company’s response to their complaint. The bureau has said it plans to replace the so-called ‘dispute’ function in its online database with the survey and a narrative box where consumers can comment on how their complaint was handled.

Under the CFPB’s collection proposal, consumers will be asked to use a one- to five-point scale to determine whether they agreed or disagreed with three statements: “The company addressed all of my issues,” “I understood the company’s response to my complaint,” and “The company did what it said it would do with my complaint.”

Currently, the CFPB does not have any ranking system on how companies respond to complaints. The agency is working on the proposed rollout, which is expected in the first quarter, Larson said.

For now, one of the few ways to halt the proposed data collection would be if the OMB determined that the collection request lacked “utility,” to consumers, a standard that includes improving “the functioning, transparency and efficiency of markets for [financial] products and services.”

To be sure, the proposal could be withdrawn altogether if CFPB Director Richard Cordray were replaced, an issue that is the subject of much speculation, or CFPB management somehow put a halt to the effort, Larson said in an interview.

Consumer complaints have been a sore spot for both industry and the agency. The CFPB uses consumer complaints as a partial basis for industry guidance, rulemaking and enforcement actions.

But bankers have accused the CFPB of using a back-door process to collect data on consumer complaints in violation of the Paperwork Reduction Act of 1995. Gathering data from “the narrow field of consumers that file complaints,” would provide subjective responses, the banking groups said.

Source: National Mortgage News

VALERI Servicer Newsflash

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Investor Update
December 5, 2016

IMPORTANT INFORMATION
Appraisal Fee Changes – Effective December 1, 2016, liquidation appraisal fees increased in Arizona, California, Connecticut, Delaware, Indiana, Maine, Massachusetts, Michigan, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. These changes are reflected on the VALERI Fee Cost Schedule: http://www.benefits.va.gov/HOMELOANS/documents/docs/valeri_fee_cost_schedule
_maxallowable_2014_to_present.xls.

REMINDER
Quit Claim Deeds (QCD) – If a VA-acquired property is returned to the servicer due to title problems, VA’s contractor, Vendor Resource Management, is responsible for processing the QCD. Servicers are advised not to send the QCD to the Regional Loan Centers (RLC). If the property was never acquired by VA and the deed was recorded to VA in error, then it is appropriate for the servicer to prepare and send a QCD to the RLC for execution (VA Servicer Handbook M26-4, Chapter 12).

DEVELOPMENT UPDATES
On Saturday, December 10, 2016, VALERI Manifest 16.4 will be released. The following system enhancements will be included:

CQ 12067 – Foreclosure proceeding type and maximum allowable foreclosure timeframe for Wisconsin will be updated on the property address link.

CQ 11471 – An indemnified loan will be identified as such in the loan summary section in the Servicer Web Portal (SWP).

CQ 11973 – Servicers will have the ability in SWP to view the name of the person who submitted an appeal on a paid claim and the details of what was submitted.

CQ 12220 – Several document names will be updated in the Post Audit process.

CQ 11948 – Servicers who report events through SWP ONLY will now have the ability to view all events, regardless of the employee’s role.

CQ 12336 – New claim line item for polycarbonate will be added as a boarding type. A new version of the Claim Bulk Upload Template and the VALERI Fee Cost Schedule will be available on Monday, December 12.

Source: VA

VA: M26-4 Servicer Handbook Updates

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Investor Update
November 17, 2016

Appendix H: Property Preservation Requirements and Fees *Updated text in italics. This text has been revised to include snow removal.

(a)  Timing.  Winterization and Snow Removal are not required, nor will be reimbursed, for properties in Hawaii, Guam, Puerto Rico, or the U.S. Virgin Islands.  In the jurisdictions where winterization and/or snow removal are required, these services must be conducted between October 1 and March 31.  However, winterizations and/or snow removal are allowed during any month of the year in the following States: Alaska, Colorado, Connecticut, Idaho, Iowa, Illinois, Indiana, Massachusetts, Maine, Michigan, Minnesota, Montana, North Dakota, Nebraska, New Hampshire, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, Wisconsin, and Wyoming.

Source: VA (M26-4 Transmittal November 2016)

Additional Resource:

 VA (full M26-4 Servicer Handbook text by chapter)

VA Circular 26-14-22 Change 1 Making Home Affordable Program

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Investor Update
December 22, 2016

1. Purpose. The purpose of this Circular is to extend the rescission date of the basic Circular.

2. Therefore, Circular 26-14-22, Change 1 is changed as follows:

Page 5, paragraph 6b: Delete “January 1, 2017.” and insert “October 1, 2017.”

By Direction of the Under Secretary for Benefits

Jeffrey F. London
Acting Director, Loan Guaranty Service

Source: VA

Additional Resource:

VA (Circular 26-14-22)

USDA: Partial Releases – Delegation of Servicer Approval Authority

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Investor Update
December 12, 2016

This update is a reminder that loan servicers can approve partial releases without prior Agency approval under the following conditions, excerpted from the program handbook:

  • The borrowers receive adequate compensation for the released property;
  • The portion of the property being conveyed does not exceed 10 percent of the area of the mortgaged real estate;
  • There is no damage to existing structures or other improvements;
  • There is no unrepaired damage to sewer, water, or paving;
  • All of the compensation received for the partial release is applied to reduce the unpaid principal balance of the mortgage, or toward repairs and improvements of the property.

More details on this subject may be found in Chapter 17 of the program handbook.
 
Questions regarding this announcement may be directed to Melvin Carroll at 202-690-4742 or Melvin.Carroll@wdc.usda.gov.
 
Thank you for your support of the Single Family Housing Guaranteed Loan Program!

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

USDA: Automated Submission of Loss Claims

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Investor Update
December 8, 2016

USDA continues to explore effective means by which to improve the quality and effectiveness of the Single Family Housing Guaranteed Loan Program (SFHGLP).  Effective use of automation to submit loss claim packages will benefit both the lender/servicer and the Agency.  The submission of loss claims and supporting loss claim documents using automation reduces costs, process times, increases program effectiveness and improves the customer’s experience.
 
Effective December 31, 2016, USDA is requiring all active participating SFHGLP lenders/servicers to enter and submit loss claims and upload supporting claim documents to the Agency’s Lender Interactive Network Connection (USDA LINC) site.
 
For more detailed information on submission of loss claims, timelines and required documentation, lender/servicers should refer to 3555 Handbook Chapter 20 Loss Claims – Collecting on the Guarantee 7CFR 3555.351.
 
The lender/servicer can submit a claim as the result of a loss from a pre-approved pre-foreclosure sale (short sale), a third party purchase at a foreclosure sale, acquisition through voluntary liquidation, or as a result of a purchase by the servicer at a foreclosure sale.  Servicers submit loss claim requests to the Customer Service Center (CSC) located in St. Louis, Missouri.  A guide “Loss Claim Administration User Guide” along with a CSC Contact information sheet can be found online at our “Training and Resource Library”.
 
System Access Requirements
 
In order to properly submit loss claims through USDA LINC, lenders are required to establish a System Administrator, sign a Trading Partner Agreement – Addendum E and provide Level II eAuthentication Access for all applicable staff.
 
Prior to December 31, 2016, the designated Administrator must first obtain Level II eAuthentication access to the GLS System and complete the Trading Partner Agreement – Addendum E.  Below, please utilize the links to obtain system access and complete the agreement.
 
Obtaining GLS Level II System Access (LexisNexis)
 
Once the designated Lender Administrator(s) has received confirmation of Level II e-Authentication access and the agreement has been approved, the administrator(s) will need to ensure all internal loss claim processing staff obtain Level II access to USDA LINC.  Level II access will allow all loss claim processing staff to input all loss claims into USDA LINC.  eAuthentication Training is available to assist the Lender Administrator(s) in navigating Security Administration.
 
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