Safeguard Properties

VALERI Servicer Newsflash

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Investor Update
November 3, 2016

IMPORTANT INFORMATION

Manual Update – Chapter 21, Disasters, has been added to the VA Servicer Handbook, Manual 26-4, and posted on the VALERI Internet site located at http://www.benefits.va.gov/homeloans/servicers_valeri.asp.

Appraisal Fee Changes – Effective September 1, 2016, liquidation appraisal fees have increased in Alabama, Florida, Mississippi, Puerto Rico, and Virgin Islands. Effective November 1, 2016, liquidation appraisal fees have increased in Colorado, Georgia, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Washington, and Wisconsin. 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.

Source: VA

VA Circular 26-16-37 Requirements for Notification Evaluation and Reduction

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Investor Update
November 29, 2016

1. Purpose. To update VA guidance on implementation of Department of Housing and Urban Development (HUD) and Environmental Protection Agency (EPA) guidelines governing the notification, evaluation, and reduction of lead-based paint (LBP) and/or lead-based paint hazards in federally-owned residential housing managed by a private sector service provider.

2. Background. Congress passed the Residential Lead-Based Paint Hazard Reduction Act of 1992, which is Title X of the Housing and Community Development Act of 1992, to address the need to control exposure to LBP hazards. This Circular updates and implements changes that have occurred since the rescission of Circular 26-04-02.

3. Title X Requirements. The full text of the Final Rule is in the Federal Register dated September 15, 1999. It is entitled “Requirements for Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance: Final Rule.” The most authoritative and comprehensive document available to understand the procedures and technology involved in implementing these requirements is the “HUD Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing.” Copies of this document can be downloaded from HUD’s website: http://portal.hud.gov/hudportal/HUD?src=/program_offices/healthy_homes/lbp/hudguidelines.

Source: VA (Circular 26-16-37 full version)

There?s Less Than 1 Year Left for More Than 200,000 HARP Eligible Borrowers

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Investor Update
November 17, 2016

Rates only project to increase

The deadline, while it has constantly moved, is quickly approaching for struggling borrowers to take advantage of the government’s Home Affordable Refinance Program. And to add another factor on top of this, rates are only projected to increase.

The FHFA announced in August that it extended HARP until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product it is planning to launch toward the end of 2017.

In one final push, the Federal Housing Finance Agency announced in September that it was trying one last time to capture the remaining 323,000 homeowners who could save an average of $2,400 per year through HARP.

Even though only a few months have passed since the announcement, the FHFA has already made some progress on reaching the remaining group of borrowers that are still out there.

Approximately 15,597 borrowers refinanced their mortgages through HARP from July through September, bringing total refinances from the inception of the program to 3,434,451, according to the FHFA’s third quarter Refinance Report.

This brings the updated amount of borrowers who are still eligible for HARP as of the second quarter of 2016 to 242,512.

The FHFA reiterated that these borrowers meet the basic HARP eligibility requirements, have a remaining balance of $50,000 or more on their mortgage, have a remaining term on their loan of greater than 10 years, and their mortgage interest rate is at least 1.5% higher than current market rates.

On average, the FHFA said that these borrowers could save $2,400 per year by refinancing their mortgage through HARP.

Currently, ten states account for more than 60% of the nation’s HARP eligible loans with a refinance incentive as of June 30, 2016.

Source: HousingWire (full article)

Freddie Mac: Serial Loan Level Fraud Hurts the Mortgage Industry

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Investor Update
November 16, 2016

We hear plenty about big fraud schemes that capture the headlines.

But often the most pervasive and costliest mortgage fraud starts with small omissions and fabrications that show up on one borrower loan after another.

Recently, we’ve noticed several cases of what we call serial loan level misrepresentation (misrep), which occurs when loan officers and/or real estate agents misstate facts on the loan application and/or fabricate documents to support those misstatements.

Three Examples of Serial Loan Level Misrepresentation

By omitting and fabricating essential information, fraudsters are hoping to qualify borrowers for loans they wouldn’t normally get. How do they do it? Consider these three examples:

  • A borrower’s employment information is changed to reflect an incorrect employment period, a change in employment status from part-time to full-time, a fake promotion, or the fact that the borrower was never employed at all. Sometimes, the fake “employer” is engaged in the fraud, provides false employment verification, sets up a fake company website or Facebook page, and may even have someone answer a fake work phone number to confirm employment. We’re seeing much more sophisticated executions of this kind of fraud than we’ve seen in the past.
  • A borrower’s contribution comes from gift funds. One of our most recent investigations shows that the borrower’s “relative” providing the gift funds isn’t related to the borrower, but may be related to another participant in the origination (e.g. real estate agent, loan officer, etc.). A number of Freddie Mac Seller/Servicers have reported this to our fraud team.
  • Multiple false employers are tied to the same address. For example, all of the investigated loans come from the same loan officer or the borrowers are all represented by the same real estate agent.

“These types of schemes result in real financial losses for our customers and Freddie Mac, and also negatively impact the perception of our industry,” said Chris Mock, Freddie Mac’s Vice President of Quality Control and Customer Eligibility.

And while all borrowers are susceptible to misrep, history shows us that first-time and affordable lending borrowers are more susceptible to this type of fraud. They’re often novices to mortgage lending and can be taken advantage of more easily by an unscrupulous mortgage or real estate professional.

The good news is that we’re getting better at busting fraudsters for two reasons:

  • Freddie Mac is receiving a richer set of data from our lenders than before. This allows us to more quickly identify the rogue counterparties we’re actively looking to catch.
  • Our lending partners have fraud on their radar. They’re following our Guide requirements and best practices for fraud management and reporting.

International Fraud Awareness Week

“Freddie Mac is proud to acknowledge International Fraud Awareness Week, which runs from November 13-19,” says Joan Ferenczy, Vice President of Enterprise Fraud Risk. “Our team stands with our customers in fighting fraud together. Early detection is key to stopping fraud before perpetrators can get away with it.”

For More Information

Source: Freddie Mac

Saying Goodbye to HAMP Isn?t the End for Struggling Homeowners

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Investor Update
November 14, 2016

This is what the change means to Fitch Ratings

Dec. 31, 2016 marks the end of a seven-year government program designed to save struggling homeowners who are behind on their mortgage, or in danger of imminent default due to financial hardship.

The government’s Home Affordable Modification Program also came with incentives for servicers and investor, which worked to help unify the industry after the financial crisis.

HAMP’s sibling, the Home Affordable Refinance Program, which was created at the same time, was extended in August until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product. HAMP, on the other hand, is still slated to end at the end of this year.

Borrowers aren’t out of luck though. A new report from Fitch Ratings explains that 2017 brings the start of a new system that can still be beneficial for all parties involved. There are just a few wrinkles that the system would need to be ironed out.

Up until this point, Fitch stated that HAMP loan modifications have accounted for approximately 50% of all loan modifications completed this year, and this number is dropping. HAMP monthly applications are now approximately 70% below the monthly average at the start of the program.

The main benefit Fitch outlines is that modification decision timelines will shorten.

“Currently servicers first perform full reviews of applications for acceptability to HAMP guidelines; ineligible candidates are usually subsequently screened for acceptability under proprietary modification programs,” the report stated.  

With HAMP ending, this initial step is removed and servicers will likely be able to make faster modification decisions.

This is likely to then translate into shorter liquidation timelines for the portion of loans that do not qualify for proprietary modifications.

The main industry fear is that there will no longer be any consistency in the industry anymore since HAMP unified everyone.

Back in July, the Department of the Treasury, Department of Housing and Urban Development, and the Federal Housing Finance Agency, the three main governmental agencies that were involved in this program, took a look back the programs’ history and provided a look at what’s next.

The government wants to make sure that the mortgage industry will take steps to ensure that loss mitigation is still a priority over foreclosure.

To avoid another massive wave of foreclosures, the agencies stated that the mortgage industry can take several steps, including the adoption of five “guiding principles” that the agencies believe should be the foundation for future loss mitigation programs: accessibility, affordability, sustainability, transparency, and accountability.

The Consumer Financial Protection Bureau later reaffirmed these principles in its own words, adding that these principles are not binding legal requirements and instead are intended to complement ongoing discussions on the development of loss-mitigation programs.

The Fitch report touched on these likely differences now that non-HAMP ‘proprietary’ modifications will be used more frequently.

“Borrowers applying for modifications in 2017 may find greater ease in the documentation gathering process and faster approval/decline decisions,” the report stated. “However, features of proprietary modifications differ across servicers and this can be further impacted by approaches taken by the investors in the loans.”

Fitch stated that the HAMP program provided for the unification of loss mitigation policies across the broad mortgage servicing industry but as proprietary modifications increase to replace HAMP, the overall variability in modifications is expected to increase.

“To be clear, the end of HAMP does not mean the end of available help to borrowers still struggling with their mortgage payments as other existing programs remain available,” the report stated.

In fact, it added concluded that many servicers have found success through the use of their own proprietary loan modification programs.

Another positive Fitch noted is that with a further HAMP extension unlikely, the GSE’s are expected to focused on other borrower relief programs.

Source: HousingWire

MHA HAMP Reporting Update Updated Data Dictionaries Posted

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Investor Update
November 17, 2016

In connection with the March 2017 release of the HAMP® Reporting System, updated versions of the following Data Dictionaries were posted on HMPadmin.com:

  • HAMP Data Dictionary – 03/01/2017 Release
  • SVT Data Dictionary – 03/01/2017 Release
  • HAMP ADR Data Dictionary – 03/01/2017 Release
  • 2MP Data Dictionary – 03/01/2017 Release
  • HAFA Data Dictionary – 03/01/2017 Release
  • Treasury FHA-HAMP Data Dictionary – 03/01/2017 Release
  • RD-HAMP Data Dictionary – 03/01/2017 Release

Questions?
For more information, email the HAMP Solution Center or call 1-866-939-4469.

Source: MHA

MHA HAMP Reporting Update October 2016 UP Survey Now Available

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Investor Update
November 15, 2016

The October 2016 UP survey is now available on HMPadmin.com (login required). Servicers that have executed a Servicer Participation Agreement (SPA) and that have cumulative UP activity must complete and upload their UP survey response to the HAMP® Reporting Tool (login required) by Tuesday, November 22, 2016.

SPA servicers that have any cumulative UP activity as of October 31, 2016 must submit an UP survey at this time.

For details on downloading and submitting the UP survey response, log in to HMPadmin.com, navigate to the HAMP Loan Reporting Tools & Documents area, and select the UP Survey tab.

Questions?
For more information, email the HAMP Solution Center or call 1-866-939-4469.

For questions specifically regarding the survey contents, email the HAMP Servicer Survey team.

Source: MHA

HUD Mortgagee Letter 2016-17: National Servicing Center Address Change for the Tulsa, Oklahoma Office

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Investor Update
November 2, 2016

New Address and Contact Information

Effective upon the publication date of this Mortgagee Letter, mortgagees will use the new address, provided below, for all correspondence for the NSC Tulsa, Oklahoma Branch:

U.S. Department of Housing and Urban Development
National Servicing Center – TULSA
110 W 7th Street, Suite 1110
Tulsa, OK 74119

The Tulsa Branch of the NSC will use its existing toll-free phone number, which is 1-800-594-9057. Likewise, the Branch’s fax number will remain as (918) 292-8984.

Source: HUD (Mortgagee Letter 2016-17 full version)

HUD Announces Disaster Assistance for Virginia Hurricane Matthew Victims

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Investor Update
November 3, 2016

Foreclosure protection offered to displaced families in four cities

WASHINGTON – The U.S. Department of Housing and Urban Development announced today it will speed federal disaster assistance to the Commonwealth of Virginia and provide support to homeowners and low-income renters forced from their homes due to Hurricane Matthew.

Yesterday, President Obama issued a disaster declaration for the cities of Chesapeake, Newport News, Norfolk, and Virginia Beach. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in this county.

“Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Castro. “Whether it’s foreclosure relief for FHA-insured families or helping these counties to recover, HUD stands ready to help in any way we can.”

HUD is:

  • Assisting the Commonwealth of Virginia 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;
  • 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; 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.
  • 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.

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

Source: HUD

Freddie Mac: Your 2017 Scorecard Preview Period Begins Today

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Investor Update
November 30, 2016

The 2017 Freddie Mac Servicer Success Scorecard (Scorecard) preview period begins today. From now through February 28, get to know the new and improved Scorecard and its:

  • Simplified navigation.
  • Intuitive user interface.
  • Easier access to important information.

Get Started
 
Here’s what you can do to hit the ground running with the 2017 Scorecard:

1. Watch our high-level overview video to get familiar with the new workflow and design.

2. Log in to preview your October 2016 performance. Discover how to drive your performance using innovative analysis, including updated performance trends, synthetic comparisons, rankings, and metric details/reports.

3. Need help? Review the new reference guide [pdf] for detailed instructions on how to navigate and use the redesigned Scorecard.
 
Once you’ve experienced the 2017 Scorecard for yourself, we’d like to know your initial impressions and would appreciate your feedback in one or two words.

More Features to Come
 
The following features/functions will be unavailable during the preview period but will be live in your first monthly 2017 Scorecard available on February 28, 2017, with your January performance:

  • Performance Trending for Default Management metrics.
  • Metric Detail pages and Loan Level Reports for Investor Reporting metrics.
  • Expanded Portfolio Overview section in the Executive Summary Report.

For More Information

  • Read Single-Family Seller/Servicer Guide Bulletin 2016-17 [pdf].
  • Review our 2017 Scorecard FAQs.
  • Visit Freddie Mac’s Learning Center for more on our training programs and reference tools.
  • Contact your Freddie Mac representative.

Source: Freddie Mac