Safeguard Properties

FHLMC Guide Bulletin 2016-07: Freddie Mac Principal Reduction Modification

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Investor Update
April 14, 2016

In Single-Family Seller/Servicer Guide (Guide) Bulletin 2016-07, we’re announcing the Freddie Mac Principal Reduction Modification. We’ve developed this temporary offering with Fannie Mae and at the direction of the Federal Housing Finance Agency (FHFA).
 
Review Guide Bulletin 2016-07 for the eligibility requirements and modification terms. We are publishing requirements and terms only in the Guide Bulletin (not in the Guide), since this is a temporary offering.
 
Principal Reduction Modification Highlights

  • This modification is aimed at helping assist seriously delinquent, underwater borrowers at risk of foreclosure, mainly in neighborhoods hit hardest by the housing crisis.
  • It leverages the Freddie Mac Streamlined Modification (Streamlined Modification) structure. The evaluation criteria, Trial Period Plan, processing and reporting are the same as the Streamlined Modification. Some key differences include:
  • Evaluation Criteria – the mortgage must: 
  • Have a UPB less than or equal to $250,000, before capitalizing eligible arrearages.
  • Have a post-modification mark-to-market loan-to-value (MTMLTV) ratio greater than 115%.
  • Not have been for an investment property at origination.
  • Solicitation Letter. Solicit eligible borrowers by sending the Principal Reduction Modification Solicitation Letter provided in Attachment A of Guide Bulletin 2016-07.
  • Submission Through Workout Prospector®. Once the borrower successfully completes the Trial Period Plan and executes the modification agreement, you enter the terms of the modification and data for all required fields using the Workout Prospector Court-Mandated Modification/Litigation exception path.
  • Principal Reduction. This is achieved by calculating the forbearance amount as you would with a streamlined modification; that amount is later forgiven. Eligible borrowers in active Trial Period Plans (as defined in the Guide Bulletin) for Home Affordable Modification Program (HAMP®), Freddie Mac Standard Modification or Streamlined Modification or Freddie Mac MyCity Modification, may also have their forbearance amount forgiven following settlement of the modification.


What Servicers Need to Do
 
Evaluate the starting population provided in the list on our Servicer Performance Profile website of reports using the eligibility criteria provided in Guide Bulletin 2016-07 by October 1, 2016. Servicers may implement prior to October 1, 2016, if they are ready to do so.
 
An initial borrower solicitation must be sent no later than October 15, 2016, and all subsequent solicitation letters must be sent by December 31, 2016.
 
Be ready to discuss alternative workout solutions with borrowers who don’t end up qualifying for the Principal Reduction Modification, including modifications with principal forbearance.
 
Training and Resources
 
Take advantage of training opportunities on our Learning Center. A reference guide and tutorial on the Principal Reduction Modification will be available by April 30, 2016.
 
For More Information

Source: Freddie Mac

FHFA: Statement on Authorized Enterprise Servicers Reliance on Legal Standards in Homeowner Association Foreclosure Proceedings (release date 4/29/2016)

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Investor Update
April 29, 2016

[See attached PDF]
 
Attachments: PDF of August 28, 2015 Statement

Contacts:
?Media: Stefanie Johnson (202) 649-3030 / Corinne Russell (202) 649-3032  Consumers: Consumer Communications or (202) 649-3811

Source: FHFA

Additional Resource:
DS News (FHFA Vows to Keep Fighting HOA Super-Priority Liens)

FHFA: Orders: Reporting by Regulated Entities of Stress Testing Results as of December 31, 2015

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Investor Update
April 18, 2016

SUMMARY: In this document, the Federal Housing Finance Agency (FHFA) provides notice that it issued Orders, dated March 2, 2016, with respect to stress test reporting as of December 31, 2015, under section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Summary Instructions and Guidance accompanied the Orders to provide testing scenarios.

The Orders are effective April 18, 2016. Each Order is applicable March 2, 2016.

Source: FHFA

FHFA Announces Principal Reduction Modification Program and Further Enhancements to NPL Sales Requirements

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Investor Update
April 14, 2016

Washington, D.C. –   The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes.  The new Principal Reduction Modification program is a one-time offering for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria.  The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value (MTMLTV) ratios exceed 115 percent.  Other eligibility criteria apply (see attached Fact Sheet for eligibility criteria and key dates). 

The program was approved under FHFA’s statutory authority in the Emergency Economic Stabilization Act of 2008 “to implement a plan that seeks to maximize assistance for homeowners and … minimize foreclosures,” including through a “reduction in loan principal,” while minimizing losses for the Enterprises (12 USC 5220(b)) as well as other provisions of law.

FHFA expects that approximately 33,000 borrowers will be eligible for a Principal Reduction Modification.  Servicers must solicit borrowers eligible for a Principal Reduction Modification no later than October 15, 2016.

FHFA also announced today that it has approved further enhancements to its requirements for Freddie Mac and Fannie Mae’s sales of non-performing loans (NPLs).  The new enhancements: 1) establish that NPL buyers must evaluate borrowers whose MTMLTV ratio exceeds 115 percent for modifications that include principal reduction and/or arrearage forgiveness; 2) forbid NPL buyers from unilaterally releasing liens and “walking away” from vacant properties; and, 3) establish more specific proprietary loan modification standards for NPL buyers.

The new enhancements draw on the experiences of Freddie Mac and Fannie Mae with NPL sales over the past year and are consistent with current practices of most NPL investors.  They are designed to minimize foreclosures, help mitigate the potential for neighborhood blight and decay, and help improve loan modification success rates. 

“The national housing market has significantly improved in recent years but there are still areas of the country where home values have not recovered and negative equity remains a real problem,” said FHFA Director Melvin L. Watt.  “The Principal Reduction Modification program we are announcing today, along with the changes we are making to our NPL sales guidelines, will allow an opportunity for delinquent, underwater borrowers in these areas to avoid foreclosure and save their homes,” he said. 

In announcing the Principal Reduction Modification program, Director Watt also said: “This plan will no doubt be viewed by some as too small and too late and viewed by others as too large and unnecessary.  However, the plan is consistent with FHFA’s statutory obligation to ‘maximize assistance for homeowners’ by providing some borrowers what could well be their final opportunity to avoid foreclosure.  It is also consistent with our statutory obligation to provide this assistance in ways that we reasonably expect will not have adverse economic consequences for the Enterprises.  By meeting both of these statutory obligations, the program satisfies my commitment to implement a principal reduction plan only if we could structure one that would be a ‘win-win’ for both borrowers and the Enterprises.”

Attachments:

Fact Sheet: Principal Reduction Modification

Frequently Asked Questions: Principal Reduction Modification

FHFA’s Analysis of a Principal Reduction Modification Program and Enhanced Non-Performing Loan Sales Requirements

Fact Sheet: Enhanced Non-Performing Loan Sale Guidelines

Contacts:
Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030

Source: FHFA

Additional Resource:
DS News (FHFA Throws Struggling Homeowners a Lifeline)

FHA INFO #16-26: Single Family Housing Policy Handbook: Draft Title I Section Posted Today for Feedback

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Investor Update
April 20, 2016

Today, the Federal Housing Administration (FHA) posted for stakeholder review and feedback, the draft Title I section of its Single Family Housing Policy Handbook 4000.1 (SF Handbook). This posting is a continuation of FHA’s progress toward a consolidated, authoritative SF Handbook that will make it easier to do business with FHA.

When published, the Title I section will replace existing guidance on:
(1) Origination, Servicing, Claims and Disposition of Manufactured Home Loans, including Lot and Combination Loans;
(2) Origination, Servicing, Claims and Disposition of Property Improvement Loans;
(3) Doing Business with FHA for Title I Lenders; and
(4) Quality Control, Oversight and Compliance for Title I Loans and Lenders

The Title I section consolidates existing guidance found in approximately 120 Title I lender letters and other policy artifacts. The content will provide FHA’s Title I lenders, appraisers, and other stakeholders with a comprehensive resource of policy.

Review and Feedback
The draft section and supporting information is posted on FHA’s Single Family Housing Policy Drafting Table (SF Drafting Table) page located on HUD.gov. We invite stakeholder feedback on the draft Title I section from April 20, 2016 through June 6, 2016. Stakeholders are encouraged to use the respective Feedback Worksheets and feedback submission process outlined on the web page.

Industry Briefing
FHA will host an industry briefing conference call for stakeholders to review the organization and structure of the draft Title I section. While the content is geared primarily for lenders, servicers and appraisers, all stakeholders are welcome to participate.
Date: May 3, 2016
Time: 2:00 PM – 3:00 PM (Eastern)
Title: FHA SF Handbook Draft Title I Section
Dial-in: (800) 260-0719; Access code: 390049

Quick Links


Resources

  • Contact the FHA Resource Center:
    — Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at: www.hud.gov/answers.
    — E-mail the FHA Resource Center at answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
    — Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: HUD (FHA INFO #16-26 full version)

FHA INFO #16-25: FHA Connection System Updates Include New 203(k) Calculator and More

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Investor Update
April 19, 2016

On April 18, 2016, the Federal Housing Administration (FHA) implemented a series of updates to its FHA Connection (FHAC) system, including the launch of its new 203(k) Calculator that automates Maximum Mortgage Amount calculations required for both the Standard and Limited 203(k) programs, as well as additional FHAC screen enhancements. These changes correspond with Single Family Housing Policy Handbook 4000.1 (SF Handbook) updates published on March 14, 2016.

Two Ways to Access the 203(k) Calculator
The new 203(k) Calculator is accessible in both a public version on HUD.gov and a secure version within the FHAC system:

  • Public version: this web-based version allows all interested parties to work with the calculator when developing scenarios for 203(k) mortgages before an FHA case number is obtained. Results can be viewed and printed, but they cannot be downloaded or saved.
  • FHAC version: accessible from FHAC’s Case Processing page only after signing on to the system using a valid FHAC identification number and password, this version also requires that the mortgagee has a valid FHA case number, and:
    — Based on information entered into the calculator, will pre-populate certain fields in the calculator from the Case Number Assignment, Appraisal Logging, and/or FHA TOTAL Mortgage Scorecard screens in FHAC.
    — Upon successful processing of the 203(k) Calculator page, the calculator saves the results and uses data from the calculator to pre-populate certain fields in the FHAC Insurance Application Screen.


Using the 203(k) Calculator
As announced with FHA’s March 14, 2016, SF Handbook update, mortgagees may begin using the 203(k) Calculator as of today, but must use the calculator version within FHAC prior to endorsement for all 203(k) transactions with case numbers assigned on and after October 31, 2016. Mortgagees should thoroughly review the April 18, 2016, FHA Connection Release Notes for detailed information about using the calculator.

Mortgagees are also encouraged to attend the FHA Connection 203(k) Calculator and Other System Enhancements webinar for a more in-depth discussion covering the functionality of the 203(k) Calculator. Information about accessing this live webinar on April 28, 2016, is included at the end of this article.

At this time, FHA’s 203(k) Maximum Mortgage Calculation sample resource documents remain available on the 203(k) Sample Documents web page; however, FHA intends to remove these documents in the future.

Other FHAC System Updates Implemented on April 18, 2016
In addition to the 203(k) Calculator, FHA implemented other changes to the following FHAC screens:

  • Appraisal Logging: includes changes to coincide with the implementation of the 203(k) Calculator; addition of a new Appraisal Type field; and, changes to certain other drop-down menus to include appraisal type.
  • Insurance Application: includes changes to error messages, certain drop-down menus, and data fields to coincide with the implementation of the 203(k) Calculator; other changes to accommodate recent FHA policy updates, including Building on Own Land, and Energy Efficient Homes.
  • Escrow Closeout: includes addition of new fields; modification of existing fields; and, additions and revisions to drop-down menus to accommodate escrow closeout policies announced with FHA’s March 14, 2016, SF Handbook update. Mortgagees may begin using the Escrow Closeout functionality in FHAC as of April 18, 2016, but must use this functionality FHAC for all case numbers assigned on and after October 31, 2016.

Mortgagees and others should review the April 18, 2016 FHA Connection Release Notes for more information on these and other FHAC changes.

FHA Connection Systems Enhancements Webinar
Mortgagees and other stakeholders in FHA transactions are invited to participate in a live webinar training session on the April 28, 2016, FHAC system updates. This webinar will provide a detailed overview for FHAC users on the new functionality, screen changes, and other FHAC system updates, including how these changes relate to FHA policy.


Quick Links


Resources
Contact the FHA Resource Center:
— Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at: www.hud.gov/answers.
— E-mail the FHA Resource Center at answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
— Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

Source: FHA (FHA INFO #16-25 full version)

Fannie Mae Single-Family Servicing News: Visit Fannie Mae at MBA Secondary

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Investor Update
April 20, 2016

It’s all about opportunities + leadership at MBA’s National Secondary Market Conference & Expo 2016 in New York, May 15 – 18, 2016. Stop by Booth #205, and Fannie Mae’s Open House in the Manhattan Ballroom, to talk about the opportunities ahead — opportunities for you to generate more business, reduce risk, and lower expenses. You’ll:

  • Connect with Fannie Mae leaders and subject matter experts
  • Learn how Fannie Mae Technology Solutions deliver reliable, end-to-end solutions and life-of-loan servicing so you can better serve your customers
  • Find out how new products, like HomeReady®, help lenders confidently serve today’s market of creditworthy, low- to moderate-income borrowers

At Fannie Mae, helping you do business better is our goal. Fannie Mae and you — creating opportunities together. Join us!
 
Servicer Expense Reimbursement Line Item Submission Changes Document Implemented

Fannie Mae Expense Reimbursement consolidated the available expense reimbursement claim line item categories and subcategories in the Black Knight Financial Services LoanSphere™ Invoicing Application on March 21, 2016.

A full listing of the claim line items that servicers should use for conventional loans are available in the Servicer Expense Reimbursement Line Item Submission Changes. You may have noticed some line items available to you are not included in the published document. Those 22 line items are for expenses related to Reverse Mortgage loans and should not be used for conventional loan expenses. The Reverse Mortgage line items can be easily differentiated from the standard expense line items because the subcategory includes the prefix of “HECM”.

If you have any questions or concerns related to the LoanSphere Invoicing Line Item Consolidation project or the HECM expense line items, please submit your inquiry to expensereimbursement_lineitemconsolidationproject@fanniemae.com.
 
Check out our Marketing Center for Updated HARP Materials and More

The Home Affordable Refinance Program (HARP) ends this year, and we’ve updated our outreach materials to help you notify homeowners that time is running out to refinance with HARP. Visit our Marketing Center to view, customize, and download a range of free HARP materials in addition to collateral for HomeReady mortgage and our 97% LTV options. The Marketing Center gives you the benefit of professionally designed materials while saving you time and money.
 
Build New Skills with HFI InDepth

With Housing Finance Institute® (HFI™) InDepth, you’ll learn from expert instructors and get your questions answered — all in an online virtual classroom. Register today for an upcoming course:

Visit Fannie Mae’s HFI InDepth page today to see the full calendar of classes and to register!
 
Stay Connected

Trending Topics
Here are the hot topics that are currently trending in our social network:

  • Consumers think mortgage rates have bottomed out. Are they right? Here’s what @mortgagereports says.
  • The American family is changing, and home builders are responding. See what the industry is doing in this article.

To get more info on these and other hot topics, please follow us on Twitter.

Source: Fannie Mae

Fannie Mae Single-Family Servicing News: Introducing the Fannie Mae Marketing Center

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Investor Update
March 30, 2016

Introducing the Fannie Mae Marketing Center

Our new Marketing Center is a free online tool providing lenders and other housing professionals access to a variety of customizable marketing materials including HomeReady® mortgage, HARP, and more. Add your logo, company colors, product names, contact information and choose images from our photo gallery to brand and make these materials your own.

With our Marketing Center, you get the benefits of professionally designed materials while saving the time and money required to develop them yourself. Our marketing materials are a great way to get your message out with style. Learn more.

SMDU Brings Efficiency to Streamlined Modification Offers

Ditech Financial and Nationstar use of Servicing Management Default Underwriter™ (SMDU™) for mass solicitations of Fannie Mae Streamlined Modifications is resulting in greater efficiency, more certainty, and the time to focus on giving delinquent borrowers a fresh start. Read more.

Build New Skills with HFI InDepth

With Housing Finance Institute® (HFI™) InDepth, you’ll learn from expert instructors and get your questions answered — all in an online virtual classroom. Register today for an upcoming course:

Visit Fannie Mae’s HFI InDepth page today to see the full calendar of classes and to register!
 
Stay Connected

Trending Topics
Here are the hot topics that are currently trending in our social network:

  • Servicers, sign up for expanded borrower “pay for performance” incentives for HAMP mod here.
  • Have you seen our HOME by Fannie Mae #mobileapp resource page? Check it out here.

To get more info on these and other hot topics, please follow us on Twitter.

Source: Fannie Mae

Fannie Mae Single-Family Servicing News: Announcement SVC-2016-03 and Lender Letters LL-2016-01 & LL-2016-02

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Investor Update
April 14, 2016

This Announcement communicates the following updates made to the Servicing Guide:

  • Updates to Selling/Servicing Requirements for Texas 50(a)(6) Mortgage Loans
  • Updates to Loan Level Price Adjustment Refunds
  • Updates to California Publication Requirements


Lender Letter LL-2016-01: Advance Notice of Additional Changes to Future Investor Reporting Requirements

This Lender Letter provides advance notice to the servicer of future changes to Fannie Mae investor reporting requirements.
 
Lender Letter LL-2016-02: Fannie Mae Principal Reduction Modification

This Lender Letter introduces a new mortgage loan modification program, the Fannie Mae Principal Reduction Modification, at the direction of FHFA and in collaboration with Freddie Mac. Details of this program are included in this Lender Letter.

In addition to LL-2016-02, Fannie Mae is also publishing a list of Servicer FAQ’s related to this program.
 
Join Us, Become a Fannie Mae Seller/Servicer

We’ve prepared a new resource to guide lenders through every step of the process to become an approved Fannie Mae seller/servicer. The recorded training tutorial Navigate the Fannie Mae Lender Approval Process, available 24/7, covers the benefits of a direct relationship with Fannie Mae and helps you understand what you can expect throughout the approval process. The course will walk you through the Fannie Mae eligibility requirements, outline the information we will need to consider your application, and give you a run-down on how your sponsor will help guide you through the process. Join us, become an approved Fannie Mae Seller/Servicer. We look forward to doing business with you!
 
Build New Skills with HFI InDepth

With Housing Finance Institute® (HFI™) InDepth, you’ll learn from expert instructors and get your questions answered — all in an online virtual classroom. Register today for an upcoming course:

 

Visit Fannie Mae’s HFI InDepth page today to see the full calendar of classes and to register!
 
Stay Connected

Trending Topics
Here are the hot topics that are currently trending in our social network:

  • This spring, expect higher home prices, says @realtorcom. Here’s why.
  • DYK it’s Financial Literacy Month? Here’s a place your borrowers can learn about the complexities of owning a home.

To get more info on these and other hot topics, please follow us on Twitter.

Source: Fannie Mae

Fannie Mae Single Family Servicing News: New Look, Improved Website, Enhanced Materials

Posted on by Safeguard

Investor Update
April 27, 2016

Help for Borrowers Affected by Recent Flooding

Servicers are reminded that Fannie Mae has selling and servicing policies to assist impacted borrowers (or potential borrowers) following a disaster, such as the recent flooding in Houston, TX and the surrounding area. Refer to Assistance in Disasters for information on where to find Fannie Mae’s policies for providing assistance to borrowers impacted by a disaster.
 
New Look, Improved Website, Enhanced Materials

We’re continuing to make changes to put you at the center of everything we do. You’ll begin to see an updated Fannie Mae in the coming weeks, with a new look and feel and an even greater focus on making it easier to do business with us. These changes are part of many activities we’re working on — all designed to help create opportunities for you to reduce risk and lower expenses.

We look forward to seeing many of you at the MBA Secondary in a few weeks, where we’ll be showcasing our new appearance and highlighting the opportunities ahead. Be sure to stop by Booth #205 or Fannie Mae’s Open House in the Manhattan Ballroom. In the meantime, if you have any questions or want to set up a meeting in advance, please contact your account team. More information? Click here.
 
New Principal Reduction Modification Job Aid

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 HomeSaver Solutions™ Network (HSSN) cases for each of the modified loans.
 
Coming Soon: A New Way for Application Users to Access Help

Beginning in May, the Help Center available within our Fannie Mae applications is being retired and replaced by a new Technology Support page. This new page will describe how to contact us via phone or web chat, and include a link to search for help online. We hope this new page will make it easier for you to seek assistance or information regarding your Fannie Mae technology application(s).
 
Form 582 Application Scheduled Maintenance Outage

The Lender Record Information (Form 582) application will be temporarily unavailable from 6 a.m. ET, Saturday, April 30, 2016 until 8 a.m. ET Monday, May 2, 2016, for planned maintenance. If you experience any issues while using this application following this maintenance, please contact 1-800-2FANNIE (1-800-232-6643).
 
Missing out on Potential Buyers? Survey Says Yes

When it comes to credit scores, consumers could use more information, confirms research by Fannie Mae’s Economic & Strategic Research Group. Most respondents either don’t know their credit score or provide an invalid response. In addition, many think it would be difficult for them to get a mortgage because of a low credit score score — leading to lost opportunities for both lenders and buyers.

What is clear: lenders, ranked as the most influential source of mortgage advice, could play a vital role in educating consumers, clearing up consumer confusion, and responsibly expanding the pool of buyers. Download the credit score details and learn more here.
 
Build New Skills with HFI InDepth

With Housing Finance Institute® (HFI™) InDepth, you’ll learn from expert instructors and get your questions answered — all in an online virtual classroom. Register today for an upcoming course:

Visit Fannie Mae’s HFI InDepth page today to see the full calendar of classes and to register!

Source: Fannie Mae