Safeguard Properties

VA Circular 26-12-5 Change 2 New VA Property Management and Servicing Contractor

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Investor Update
June 6, 2016

1. Purpose. The purpose of this Circular is to revise the servicing contractor information from Residential Credit Solutions (RCS) to Ditech Financial LLC and to update the Contract Assurance (Portfolio Loan) contact information.

2. Therefore, Circular 26-12-5 is changed as follows:

Page 1, paragraph 2: Delete “Residential Credit Solutions” and insert “Ditech Financial LLC”.

Page 1, paragraph 7: Delete “c/o Residential Credit Solutions, Attn: Insurance Services, P.O. Box 692330, San Antonio, TX 78269-2330.” and insert “c/o Ditech Financial LLC, Attn: Conversion Team, Mailstop: L508, 345 St. Peter Street, St. Paul, MN 55102”.

Page 1, paragraph 9: Questions for VA regarding portfolio servicing issues should be directed to Adrian.Holbert@va.gov.

By Direction ofthe Under Secretary for Benefits Distribution:

Michael J. Frueh
Director, Loan Guaranty Service

Source: VA

Additional Resources
VA (Circular 26-12-5 Change 1)

VA (Circular 26-12-5)

VA Circular 26-16-17 Special Relief Following West Virginia Severe Storms, Flooding, Landslides and Mudslides

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Investor Update
June 28, 2016

1. Purpose. This Circular expresses concern about Department of Veterans Affairs (VA) home loan borrowers affected by severe storms, flooding, landslides and mudslides in the States of West Virginia, and describes measures mortgagees may employ to provide relief.

2. Direct and Indirect Impact on Borrowers. Directly affected by the West Virginia severe storms, flooding, landslides, and mudslides, were those whose homes were severely damaged or destroyed, the families of those impacted during the storms, flooding, landslides and mudslides, and those who suffered considerable personal injury. Also directly affected were those whose work environments were destroyed or severely damaged as a result of the storms, flooding, landslides and mudslides. Many others have been indirectly affected, including business partners of those in the federally declared disaster areas announced by the Federal Emergency Management Agency (FEMA). The impact may continue to ripple throughout the country, as evacuees travel nationwide to seek the support and shelter of family members.

3. Forbearance Request. VA encourages holders of guaranteed loans to extend every possible forbearance to borrowers in distress as a result of the West Virginia severe storms, flooding, landslides, and mudslides. Careful counseling with borrowers should help determine whether their difficulties are directly or indirectly related to these storms, 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 (Prepayments) allows the reapplication of prepayments to cure or prevent a default. This means that if a borrower has been making additional principal payments over a period of years, the principal balance may be increased up to the scheduled balance and the increase applied toward regular installments. Also, 38 CFR 36.4315 (Loan modifications) allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided certain conditions in the regulation are satisfied.

4. 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. The initial request applies to loans in the federally declared disaster areas, which VA believes should include areas declared by FEMA as eligible for public assistance as well as those areas eligible for individual assistance. Because of the widespread impact of the West Virginia severe storms, flooding, landslides, and mudslides, holders should ensure that all foreclosure referrals nationwide during the moratorium are reviewed prior to initiation 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.

5. Late Charge Waivers. VA believes that many servicers plan to waive late charges on loans in the disaster areas, and VA encourages all servicers to adopt such a policy for any loans that may have been affected due to the ripple effect of the storms, flooding, landslides, and mudslides as mentioned in paragraph 2.

6. Credit and VA Reporting. In order to avoid damaging credit records of Veteran borrowers in the affected areas, many servicers may suspend credit bureau reporting on loans in those areas. At this time, VA would encourage servicers to consider suspension of credit reporting on Veteran borrowers nationwide who have been affected by the storms, flooding, landslides, and mudslides. Similarly, VA will not penalize servicers for any late default reporting to VA as a result of the storms, flooding, landslides, and mudslides. This may include direct damage to servicer facilities located in the disaster areas or their operations elsewhere which may have been impacted by business partners within the disaster areas. Please contact the appropriate RLC with any questions.

7. Activation of the National Guard. Some members of the National Guard have already been called to active duty to assist in recovery efforts. Those individuals may experience financial difficulties of their own due to what could be extended tours of duty during the disaster recovery efforts. VA encourages servicers to extend special forbearance to National Guard members in this situation.

8. Rescission: This Circular is rescinded July 1, 2018.

By Direction of the Under Secretary for Benefits

Michael J. Frueh
Director, Loan Guaranty Service

Source: VA

OCC Bulletin 2016-20: Servicemembers Civil Relief Act

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Investor Update
June 10, 2016

Description: Extension of Time Period for Certain Protections

Summary

This bulletin informs national banks, federal savings associations, and federal branches and agencies of foreign banks (OCC-supervised institutions) of the temporary extension of certain protections under the Servicemembers Civil Relief Act (SCRA), enacted by the Foreclosure Relief and Extension for Servicemembers Act of 2015.
 
Note for Community Banks

This guidance is applicable to all OCC-supervised institutions that extend loans secured by a mortgage, trust deed, or other similar security to servicemembers.
 
Highlights

  • The SCRA amendments continue a temporary provision that extends for one year following a servicemember’s period of military service the protections related to the sale, foreclosure, or seizure of the servicemember’s mortgaged property, or the filing of a legal action to enforce a mortgage obligation or other similarly secured obligation.
  • The temporary extension expires on December 31, 2017.
  • The U.S. Department of Housing and Urban Development (HUD) updated its “Servicemembers Civil Relief Act Notice Disclosure” (Form 92070) to reflect the extensions.

Background

Section 303 of the SCRA, codified at 50 USC 3953, addresses obligations secured by a mortgage, trust deed, or other security similar to a mortgage on real or personal property owned by a servicemember. The provision applies only to obligations that originated before the servicemember’s military service and for which the servicemember is still obligated.

On March 31, 2016, President Obama signed into law the Foreclosure Relief and Extension for Servicemembers Act of 2015 (Pub. L. 114-142). This act extended again, on a temporary basis, the duration of coverage applicable to the section 303 protections for obligations described above from nine months to one year after a servicemember’s military service. (See OCC Bulletin 2015-21, “Servicemembers Civil Relief Act: Extension of Time Period for Certain Protections.”)

The temporary extension specifies that

  • a sale, foreclosure, or seizure of property based on a breach of a secured obligation is not valid if made during the period of military service or within one year thereafter, unless it is made pursuant to a court order or a waiver by the servicemember; and
  • a court may, on its own motion, and shall, upon application by a servicemember whose ability to comply with the obligation is materially affected by military service, stay the proceedings or adjust the obligation to preserve the interests of all parties at any time during the period of military service or within one year thereafter.

This extension ends December 31, 2017. Unless Congress enacts another extension, beginning January 1, 2018, there will be a period of 90 days after the end of the servicemember’s military service during which a foreclosure, sale, or seizure of the servicemember’s property based on a breach of a mortgage, trust deed, or other security, without a court order or waiver, will not be valid. During this period, a court may also stay proceedings enforcing such obligations.

The Housing and Urban Development Act of 1968, 12 USC 1701x(c)(5), requires lenders to send a notice of servicemembers’ rights to borrowers within 45 days of the date a missed payment was due on a mortgage secured by the borrower’s principal residence, unless the borrower pays the past-due amount before the expiration of the 45-day period. The contents of the notice are prescribed in HUD’s “Servicemembers Civil Relief Act Notice Disclosure.”

Further Information

Please contact the Compliance Risk Division at (202) 649-5470, the appropriate supervisory office, or the Community and Consumer Law Division at (202) 649-6350.

Donna M. Murphy
Deputy Comptroller for Compliance Risk

Related Links

Source: OCC

MHA HAMP Reporting Update Updated Data Dictionaries Posted

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Investor Update
June 30, 2016

In connection with the August 2016 release of the HAMP® Reporting System, updated versions of the following Data Dictionaries were posted on HMPadmin.com:

Questions?
Email the HAMP Solution center or call 1-866-939-4469.

Source: MHA

MHA HAMP Reporting Update Streamline HAMP NPV Tool 2016 Q2 Supplemental Data Update Available

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Investor Update
July 1, 2016

A supplemental data update of the Streamline HAMP NPV Tool v1.0 is now available for servicers interested in offering Streamline HAMP under the Home Affordable Modification ProgramSM.

Servicers can access the new file in the Streamline HAMP NPV Tool and Documentation section on the secure side of HMPadmin.com (login required).

The Streamline HAMP NPV Tool is designed to help servicers evaluate their portfolio and determine their policies for offering Streamline HAMP. Information about its development and use is available in the accompanying documentation.

The Streamline HAMP NPV Tool and documentation are subject to the license and other terms and conditions in the Terms of Use of HMPadmin.com.

Questions?
Email the HAMP Solution center or call 1-866-939-4469.

Source: MHA

MHA HAMP Reporting Update Q2 2016 Base NPV Documentation Supplement Available

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Investor Update
June 3, 2016

The Q2 2016 Base NPV Model Documentation Supplement is now available for the Home Affordable Modification ProgramSM (HAMP®) for use with Base NPV Model Version 7.0 beginning July 1, 2016. The supplement provides the following:

  • REO Sale Value Parameters
  • Historical and Projected Home Price Index
  • Foreclosure and REO Disposition Timelines and Costs
  • Home Price Decline Protection Incentive Matrix
  • Default Model Parameters
  • Pre-payment Model Parameters
  • HAMP Tier 2 Assumptions and Parameters

Servicers can access the Q2 2016 Base NPV Model Documentation Supplement in the Base NPV Model Tools & Documents section of HMPadmin.com (login required).

Important Actions for Certain Servicers: HAMP-registered servicers using an NPV model that has been implemented or customized for their own systems must implement the new Q2 2016 data tables for use beginning July 1, 2016.

To fulfill model versioning requirements, servicers should continue to use the Q1 2016 data tables for April 1 through June 30, 2016, and other appropriate supplement data tables for earlier quarters.

FHA Non Performing Loan Sale (NPL) Job Aid Posted

In connection with recent HUD guidance, MHA has created the FHA NPL Job Aid to assist servicers with setting up Servicing Transfers (SVT) of FHA NPL populations. This job aid is posted on the Learning Center tab under Job Aids on HMPadmin.com.

Please refer to this document for instructions on how to process FHA NPL servicing transfer requests to the HAMP Reporting Tool.

Questions?
Email the HAMP Solution center or call 1-866-939-4469.

Source: MHA

MHA HAMP Reporting Update May 2016 UP Survey Now Available

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Investor Update
June 15, 2016

The May 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 Wednesday, June 22, 2016.

SPA servicers that have any cumulative UP activity as of May 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

MHA HAMP Reporting Update Independence Day Holiday Support and System Availability

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Investor Update
June 27, 2016

Due to the observance of Independence Day, the HAMP® Reporting System response files will not be available between 8:00 p.m. ET on Friday, July 1, 2015 and 8:00 a.m. ET on Tuesday, July 5, 2015.

During this time frame, the HAMP Reporting Tool will be available for servicers to submit and upload HAMP loan data files and the corresponding response files will be provided.

The HAMP Solution Center (HSC) will close at 3:00 p.m. ET on Friday, July 1, 2016 and will resume operations at 9:00 a.m. ET on Tuesday, July 5, 2016. Servicers may contact the HSC by phone or email at any time; however, phone messages and emails will be held in queue until the center reopens on Tuesday.

The NPV Transaction Portal will be available for normal processing during this period.

Questions?
Email the HAMP Solution center or call 1-866-939-4469.

Source: MHA

MHA HAMP Reporting Update GSE HAMP Modifications ? Dodd Frank Certification (DFC) Signature Date Reporting

Posted on by Safeguard

Investor Update
June 10, 2016

Per MHA policy waiver Ref. ID 20160510, loans with a Sixth Anniversary Date of January 1, 2016 and prior with an executed DFC or GSE equivalent on or before January 31, 2016 are eligible to receive the $5,000.00 Borrower Pay for Performance incentive if the loan was in good standing on the Sixth Anniversary Date and had not been paid in full.

All servicers with loans meeting these criteria should report them into the HAMP® Reporting Tool using the approved reporting workaround for the Dodd-Frank Certification Signature Date field (DD1117) to indicate a value of 1/1/16. Once such loans are reported into the HAMP Reporting Tool, the associated incentive payments will be processed and disbursed the same month they are reported.

Questions?
Email the HAMP Solution center or call 1-866-939-4469.

Source: MHA

HUD Awards $42 Million in Housing Counseling Grants

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Investor Update
June 21, 2016

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today awarded more than $42 million in housing counseling grants to hundreds of national, regional and local organizations to help families and individuals with their housing needs and to prevent future foreclosures. HUD’s housing counseling grants and the additional funding they leverage will assist more than 1.4 million households find housing, make more informed housing choices, or keep their current homes. See list of all counseling agencies awarded funding today.

June is National Homeownership Month, a time HUD recognizes how homeownership enhances lives and contributes to thriving communities. “Dare to Own the Dream” is the theme of this month-long recognition, reinforcing the long-held belief that owning a home remains one of the cornerstones of the American Dream. The grants awarded today were announced at a White House gathering to mark National Homeownership Month.

HUD Secretary Julián Castro said, “Housing counselors provide potential homeowners with the tools they need to ensure they’re ready and responsible. Their efforts give countless families a real shot at the American Dream of homeownership. The counseling organizations HUD supports are on the front lines in providing the full spectrum of services households need – from locating affordable rental housing, offering advice on how to become a homeowner, and preventing foreclosure.”

More than $40 million will directly support the housing counseling services provided by 31 national and regional organizations, five multi-state organizations, 17 State Housing Finance Agencies (SHFAs) and 181 local housing counseling agencies. In addition, HUD is awarding $2 million to four national organizations to train housing counselors who will receive the instruction and certification necessary to effectively assist families with their housing needs.

National and regional agencies distribute much of HUD’s housing counseling grant funding to community-based organizations that assist low- and moderate-income families to improve their housing conditions. In addition, these larger organizations help improve the quality of housing counseling services and enhance coordination among counseling providers. Read a comprehensive summary of each grant.

Counseling improveshousing outcomes for homebuyers, homeowners, and renters. Last month, HUD published research findings summarizing the impact of housing counseling has on families’ housing options and choices.  Read more. In addition, recent research from the Federal Reserve Bank of Philadelphia and the Urban Institute continues to find substantial benefits to housing counseling for families who purchase their first homes and those struggling to prevent foreclosure.

Grant recipients address the full range of families’ housing counseling needs. This includes helping homebuyers evaluate their readiness for a home purchase, understand their financing and down payment options, and navigate what can be an extremely confusing and difficult homebuying process. The organization also help households find affordable rental housing and offer financial literacy training to individuals and families struggling to repair credit problems that restrict their housing options.

In addition to providing counseling to homeowners and renters, these organizations assist homeless persons in finding the transitional housing they need to move toward a permanent place to live. Finally, grantees also assist senior citizens seeking reverse mortgages. These agencies provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs, and other living expenses.

Housing counseling agencies support fair housing by assisting borrowers in reviewing their loan documentation, to avoid potential mortgage scams, unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation, to avoid foreclosure.

There are many ways to find a HUD-approved housing counseling agency. Visit HUD’s website or call (800) 569-4287 for our interactive telephone directory. Get the free housing counseling i-phone app from the app store (not yet available for android). Watch HUD’s video on how housing counseling can help families find (and keep) housing. 

Source: HUD

Additional Resource:
DS News (HUD Invests in Counseling for Foreclosure Prevention)