Safeguard Properties

USDA: REVISED: Resource Assistance Document and Quick Reference

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Investor Update
April 20, 2016

The Single Family Housing Guaranteed Loan Division has revised the following documents:
 

  • Resource Assistance Document:  This document provides answers to frequently asked questions and is organized by subpart and section of 7 CFR Part 3555.  It also includes references to HB-1-3555.    
  • Quick Reference:  This document provides a cross reference to assist users to locate information in 7 CFR Part 3555 and HB-1-3555 more efficiently.

Questions regarding this announcement may be directed to the National Office Division at (202) 720-1452.
 
Thank you for your support of the Single Family Housing Guaranteed Loan Program!

Help Resources

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: Loss Mitigation Mandatory Waiver, 7 Code of Federal Regulations (CFR) 3555, Sec 3555.301(h)

Posted on by Safeguard

Investor Update
April 28, 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 loss mitigation keeps borrowers in their homes by avoiding foreclosure while minimizing credit losses to the Agency. The Agency has determined, through successful Pilot results, issuing a written waiver of Agency concurrence reduces process times, increases program effectiveness and improves the customer’s experience.
 
Effective August 1, 2016, USDA is mandating all active participating SFHGLP lenders begin processing formal loss mitigation servicing plans in accordance with subject waiver, foregoing Agency concurrence granted by the authority under 7CFR 3555, Sec 3555.301(h). However, the Agency may revoke a lender’s waiver at any time, upon notice and without appeal rights.
 
The waiver is applicable to the following loss mitigation alternatives:

  • Traditional Servicing Options, subject to applicable provisions of 7CFR 3555, Sec 3555.303 and the SFHGLP “Loss Mitigation Guide”;
  • Special Servicing Options, subject to the applicable provision of 7 CFR 3555, Sec 3555.304 and the SFHGLP “Loss Mitigation Guide”;
  • Special Relief Measures subject to the applicable provisions of 7 CFR 3555 sec. 3555.307(c) and the SFHGLP’s “Loss Mitigation Guide”;
  • Voluntary Liquidations, subject to applicable provisions of 7 CFR, Sec 3555.305 and the SFHGLP “Loss Mitigation Guide”.

All active participating lenders will be required to enter and submit all loss mitigation servicing plans to the Agency’s Guaranteed Loan System (GLS) to serve as a record of all loss mitigation alternatives approved by the lender. All servicing actions completed under this waiver which are not submitted as required in GLS will not be considered authorized servicing and will be processed as an unauthorized servicing action should a loss claim be submitted in the future. In addition, the Monthly Default Reporting and Quarterly Status Reporting must be completed using the Electronic Data Interchange (EDI) Status of Mortgage Code Values.
 
Training Opportunities
 
The USDA, Centralized Servicing Center, located in St. Louis Missouri, is providing several training sessions to assist active participating lenders with Loss Mitigation, as well as Property Disposition and Loss Claim processing (Registration form).  All training material will be provided on site. Below, please find a list of training sessions and dates available for registration:
 
Loss Mitigation Sessions*                             Loss Claim/PDP Sessions*
May 23-24, 2016 8:00am/5:00pm                    May 25-27, 2016 8:00am to 5:00pm
June 6-7, 2016 8:00am/5:00pm                       June 8-10, 2016 8:00am to 5:00pm
June 13-15, 2016 8:30am/4:30pm                   August 8-11, 2016 8:30am/4:00pm
July 11-13, 2016 8:30am/4:30pm                    August 22-25, 2016 8:30am/4:00pm
July 18-20, 2016 8:30am/4:30pm

*All training session times will be offered during Central Daylight Time and there will be no registration fees or charges for the training session(s).
 
Training Facility Location
USDA/RD/Centralized Servicing Center
4300 GOODFELLOW BLVD
BLDG 105
SAINT LOUIS, MO 63120
 
Registration Contact: william.wines@stl.usda.gov
 
Facility Access
 
Travel expenses to and from the facility will be the Lender’s responsibility. Access to the facility is restricted without proper clearance. Below, please find a list of requirements/procedures that must be met to gain access to facility:
 
1.  The person driving any vehicle on premises must be preregistered and designated as the driver and include a list of all passengers.
2.  Each person that will attend the training must be preregistered.
3.  Upon arrival, each person will be required to provide one of the following forms of identification that must include your picture:  a) Valid     Passport, b) Valid State Driver’s License, c) Valid State Issued ID, or d) Valid Military ID.
4.  Upon confirmation of attendance, parking assignment and site passes will be issued at the front gate.
5.  All persons attending will need to arrive a minimum of 30 minutes, prior to the session start time, to allow sufficient time for site access.
 
General Travel Guidance
 
Travel to and from the facility is the responsibility of the Lender. Attendees should ensure that travel to and from the facility is planned to accommodate the start and conclusion of each training session. In addition, sufficient time should be allotted for air travel, depending upon the attendee’s destination. St. Louis offers ample hotel accommodations near St. Louis Lambert Airport and Downtown St. Louis. Both areas are within approximately 15 minutes of the facility.
 
System Access Requirements & Loss Mitigation Mandatory Waiver
 
In order to maintain compliance with the aforementioned waiver, the lender must appoint a minimum of two (2) internal Security Administrators that will be responsible for maintaining system access for all internal users. Furthermore, the lender must establish a loss mitigation processing staff and ensure they are properly trained in a manner consistent with published Agency Regulations and Guidelines.
 
Prior to August 1, 2016, the designated Security Administrators must 1) obtain Level II access to the GLS System and 2) complete/remit the Loss Mitigation User Agreement. 
 
Once the designated Security Administrators have received confirmation of Level II access and the user agreement has been approved, the Security Administrators will need to ensure all internal loss mitigation processing staff obtain Level II access to GLS. Level II access will allow all loss mitigation processing staff to input all servicing plans into GLS.
 
Additional eAuthentication training is available online. 

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

Processing a Fannie Mae Principal Reduction Modification Job Aid

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Investor Update
April 27, 2016

In conjunction with LL-2016-02: Fannie Mae Principal Reduction Modification, a new job aid, Processing a Fannie Mae Principal Reduction Modification, is available to assist servicers with the handling of the HSSN cases for each of the modified loans.

Source: Fannie Mae (full job aid)

MHA HAMP Reporting Update Updated Data Dictionaries Posted

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Investor Update
April 28, 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 March 2016 UP Survey Now Available

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Investor Update
April 15, 2016

The March 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 Friday, April 22, 2016.

SPA servicers that have any cumulative UP activity as of March 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 HAMP Reporting Tool Post Release Message

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Investor Update
March 28, 2016

Today, March 28, 2016, Fannie Mae, as Program Administrator for the Home Affordable Modification Program (HAMP), has implemented the following functionality to the HAMP Reporting Tool that supports:

  • Supplemental Directive 15-06 (SD 15-06) and Supplemental Directive 15-07 (SD 15-07) Making Home Affordable Program-Streamline HAMP Modification Process
  • Streamline HAMP Eligibility
  • Submission of Streamline HAMP Loan Setup Data
  • Streamline HAMP Additional Data Reporting Data
  • Streamline HAMP Official Monthly Reporting
  • Streamline HAMP Interactions With Other Modifications & Programs
  • Streamline HAMP Compensation
  • Streamline HAMP Servicing Transfers
  • Administrative Clarifications: Non-Approval Notices
  • Supplemental Directive 15-08 (SD 15-08) Making Home Affordable Program – Administrative Clarifications
  • HAMP Tier 2 Standard Modification Waterfall – Principal Forbearance Eligibility
  • New Servicing Transfer Reason Code for GSE Non-Performing Loan Sales
  • Interface File Changes

Servicers are encouraged to review updates related to this release from the program-specific sections on HMPadmin.com.

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

Source: MHA

MHA HAMP Reporting Update August 2016 Release Communications Plan Posted

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Investor Update
April 14, 2016

The communications plan for the August 2016 Release has been posted on the open and secure sections of HMPadmin.com. This plan provides a high-level overview of the upcoming release with key milestones identified.

Please review the August 2016 Release Communications Plan for more details. This plan can be found in the Release Notes tab under the Loan Reporting Documents section on HMPadmin.com.

Questions?
Email the HAMP Solution center or call 1-866-939-4469; to reach Black Knight Financial Services (BKFS), select option 1, then option 5.

Source: MHA

GAO-16-278: Nonbank Mortgage Servicers: Existing Regulatory Oversight Could Be Strengthened

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Investor Update
April 11, 2016

What GAO Found

The share of home mortgages serviced by nonbanks increased from approximately 6.8 percent in 2012 to approximately 24.2 percent in 2015 (as measured by unpaid principal balance). However, banks continued to service the remainder (about 75.8 percent). Some market participants GAO interviewed said nonbank servicers’ growth increased the capacity for servicing delinquent loans, but they also noted challenges. For example, rapid growth of some nonbank servicers did not always coincide with their use of more advanced operating systems or effective internal controls to handle their larger portfolios—an issue identified by the Consumer Financial Protection Bureau (CFPB) and others.

Note: GAO measured the quantity of mortgages using the total unpaid principal balance of all home mortgage loans outstanding. GAO estimated the amount of mortgages serviced by banks as the sum of the unpaid principal balance of mortgages that banks report holding for investment, sale, or trading plus the unpaid principal balance of mortgages that banks report servicing for others. GAO estimated the amount of mortgages serviced by nonbank servicers as the difference between the total amount of mortgages outstanding and the amount serviced by banks.

Nonbank servicers are generally subject to oversight by federal and state regulators and monitoring by market participants, such as Fannie Mae and Freddie Mac (the enterprises). In particular, CFPB directly oversees nonbank servicers as part of its responsibility to help ensure compliance with federal laws governing mortgage lending and consumer financial protection. However, CFPB does not have a mechanism to develop a comprehensive list of nonbank servicers and, therefore, does not have a full record of entities under its purview. As a result, CFPB may not be able to comprehensively enforce compliance with consumer financial laws. In addition, the Federal Housing Finance Agency (FHFA) is the safety and soundness regulator of the enterprises. As such, it has indirect oversight of third parties that do business with the enterprises, including nonbanks that service loans on the enterprises’ behalf. However, in contrast to bank regulators, FHFA lacks statutory authority to examine these third parties to identify and address deficiencies that could affect the enterprises. GAO has previously determined that a regulatory system should ensure that similar risks and services are subject to consistent regulation and that a regulator should have sufficient authority to carry out its mission. Without such authority, FHFA may lack a supervisory tool to help it more effectively monitor third parties’ operations and the enterprises’ actions to manage any associated risks.

Why GAO Did This Study
 
As of June 2015, about a quarter of the $9.9 trillion in outstanding home mortgages in the United States were serviced by nonbank servicers—non-depository institutions that perform such activities as collecting borrowers’ monthly payments and modifying loan terms. After the 2007-2009 financial crisis, an increase in delinquent loans and other factors led some banks to exit the mortgage servicing business and created opportunities for increased participation by nonbank entities. GAO was asked to study the effects of the growth of nonbank servicers in the mortgage market. This report examines, among other things, recent trends in mortgage servicing and the oversight framework in which nonbank servicers operate. GAO analyzed mortgage industry data from January 2006 through June 2015; reviewed relevant laws and documents from regulatory and housing agencies and an industry group; conducted a literature review; and interviewed consumer groups, regulators and other agency officials, and market participants.
 
What GAO Recommends
 
Congress should consider granting FHFA authority to examine third parties that do business with the enterprises. In addition, CFPB should take steps to collect more data on the identity and number of nonbank servicers. FHFA agreed that there should be parity among financial institution regulators in oversight authority of regulated entities and third parties they do business with. CFPB agreed that more data could supplement existing information but noted that the current data limitation does not materially affect its work.
 
For more information, contact Lawrance L. Evans Jr., at (202) 512-8678 or evansl@gao.gov.

Source: GAO (GAO-16-278 full version)

Additional Resources:

GAO-16-278 Full Report [pdf]

National Mortgage News (FHFA Should Have Oversight of Nonbank Mortgage Servicers: GAO)

HousingWire (Elizabeth Warren Pushing CFPB for More Oversight of Nonbank Mortgage Servicers)

Freddie Mac: How to Avoid Mortgage Fraud

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Investor Update
April 4, 2016

Expert offers tips on how to avoid getting conned

It’s spring time and that normally means homeowners are either searching for their perfect home, or are in the process of purchasing it. But according to Freddie Mac’s Financial Fraud Investigation Unit, it’s also a time for home shoppers to fall victim to real estate fraud.
 
In fact, Joan Ferenczy, vice president in the Freddie Mac fraud department, said in a blog post that, because people write checks and sign complex legal documents, it is so important to know how to protect from mortgage fraud.

Here are a 3 suggestions on how to avoid mortgage fraud, for the full story, visit her blog on Freddie Mac.
 
1. Mortgage application
 
First, never sign a mortgage application until you are certain the blanks are filled in correctly. Leaving blanks on a signed document makes it easy for a fraudster to change key information about you (think income and assets) or the amount you are borrowing, the interest rate you agree to pay, or even whether the interest rate is fixed for the life of the loan or will adjust. The best way to protect yourself from a loan you can’t afford is to make sure the loan application is complete and accurate before you sign it.
 
Encourage home shoppers to resist temptation to either exaggerate their income, length of employment or any other information someone says will help their loan approved. It is also important that they be in contact with their loan officer on any life changing events.
 
2. Meeting in person

Next, meet your loan officer in a secure location, like your home or their place of business. Don’t give your mortgage application in, say, a coffee shop or food court where a stranger with a cell phone could take a picture of your bank statement, tax returns, or income statements. This is an important tip for protecting yourself from identify theft.
 
3. False advertisement

Beware of ads promising to erase bad credit records and/or create new credit identities so people can get new credit cards or mortgage loans and start spending again. That’s an appealing pitch to someone eager to buy a home. But rebuilding credit takes time and patience, a good household budget, and paying your bills on time. People who fall prey to credit repair scams lose their upfront fees, don’t improve their credit, and sometimes run afoul of the law.

Source: HousingWire (full article)

Freddie Mac: 3 Red Flags + 4 Tips to Fight Affinity Fraud

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Investor Update
April 28, 2016

Can you trust someone simply based on the fact you share a religion, neighborhood or other commonality?
 
Affinity fraudsters want you to think so. 
 
With affinity fraud, a scam artist preys upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group.
 
In the past few months, the Freddie Mac Financial Fraud Investigation Unit (FFIU) has heard an increase in reports from Seller/Servicers related to suspected affinity fraud. That’s why we want to help you – and your borrowers – understand the psychology and sociology behind this type of fraud.
 
What Should You Know?

  • We tend to trust people like us. We assume they have the same values as we do. Any good salesperson can do this, but a salesperson within your own community increases the chance you’ll go along with it.
  • Affinity fraud cases are usually geographically-centric. We’re inclined to feel comfortable in our own neighborhoods. Sometimes the most egregious offenders are hiding in plain sight.
  • Proving that there’s affinity fraud is harder than with other types of fraud because participants are often less willing to admit to an “outsider” that fraud occurred. They’ll protect others within the group or may be too embarrassed to tell anyone.


Recent Affinity Fraud Examples
 
In one recent instance, a mortgage fraudster was sentenced to 30 to 99 years in prison and ordered to pay $400,000 in restitution for a “faith-based” mortgage assistance scam that was marketed through Christian networks and ministries.
 
Freddie Mac’s FFIU has also investigated reverse occupancy schemes that involve a common ethnicity and an investment scheme in which all the participants worked out at the same gym.
 
Three Red Flags

To help you detect, prevent and report affinity fraud as soon as possible, please look out for:

  • Overuse of gift funds. The amount given by the gift donor doesn’t feel reasonable.
  • Questionable income and employment.  All the borrowers are in similar lines of work.
  • Questionable occupancy. Borrowers qualify for an investment mortgage using rental income to offset a mortgage payment they wouldn’t otherwise qualify for and assets that don’t match their levels of income.  


Four Tips to Avoid Affinity Fraud
 
Follow these four tips for avoiding this scam – and share them with your organization and with your borrowers, too.

  • Do your research. Someone offers you a real estate opportunity. Check out the person’s background, as well as the investment itself, no matter how trustworthy the person who brings the investment opportunity to your attention seems to be. When doing business with someone you know, it’s wise to have an objective person review the transaction/documents before moving forward.
  • Don’t make assumptions. Beware of making any investment based solely on a recommendation from a member of an organization or group to which you belong. Not everyone like you is on the up and up.
  • There’s no free lunch. Be skeptical of any investment opportunity that promises risk-free returns or mortgage/default relief with fees. If it sounds too good to be true, it probably is.
  • Get it in writing. Avoid agreeing to anything you can’t get in writing and situations where you are told to keep the investment opportunity confidential or a secret. 


For More Information

  • Read the Single-Family mortgage fraud mitigation best practices document [pdf] and mortgage screening checklist [pdf].
  • Visit the Freddie Mac fraud prevention web page and share our updated resources with appropriate members within your organization.
  • Refer to Single-Family Seller/Servicer Guide Chapters 3100 and 3200 for our complete requirements on fraud prevention, detection and reporting.
  • Contact us immediately if you suspect fraud related to any loans we’re working on together. Call (800) 4FRAUD8 or email Mortgage Fraud Reporting.

Source: Freddie Mac