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VA Circular 26-15-16 Auction Service for the Termination of VA Loans

Posted on September 13, 2018 by Safeguard

On July 1, the U.S. Department of Veterans Affairs (VA) released Circular 26-15-16, subtitled Auction Service for the Termination of VA Loans.

Auction Service for the Termination of VA Loans

1. Purpose. This Circular provides guidance to mortgage servicers of Department of VeteransAffairs (VA) guaranteed loans electing to use an auction service as a means to terminate a loan. VA authorizes mortgage servicers and holders to employ an auction service in lieu of completing a traditional foreclosure sale, where feasible. The process must comply with VA requirements, federal, state, county, and local foreclosure laws.

2. Background. Per Title 38, Code of Federal Regulations (CFR), section 36.4322, VA has delegated the loan termination process to mortgage servicers. When a delinquency cannot be resolved and the loan has been deemed insoluble, the servicer refers the loan to foreclosure. The servicer is required to complete a valid foreclosure sale following VA requirements and complying with all federal, state, county, and local foreclosure laws. VA requires the servicer to obtain a VA liquidation appraisal to establish the fair market value of a property and calculate the Net Value. VA’s Net Value is the fair market value of real property, minus the calculated amount representing the costs VA will incur in acquiring and disposing of the property. The resulting “Net Value Bid” is the minimum credit to the indebtedness applied for claim computation under 38 CFR 36.4324. If the sale proceeds are greater than the Net Value, the actual proceeds of the sale will be credited to the indebtedness. The cost factor used will be the most recent percentage of the fair market value that VA calculated and published in the Notices section of the Federal Register.

3. Issue. Traditional foreclosure methods hinder the opportunity for servicers to obtain greaterproceeds at sale, which are applied to reduce the Veteran’s debt. This may result in VA paying a higher guaranty claim payment and VA to assume the liability of managing and marketing a conveyed property in Real Estate Owned (REO) inventory. The state and county foreclosure process limits the number of potential third-party bidders, and additional costs are incurred by VA as a result of properties conveyed to VA after the completion of a traditional foreclosure sale. The overwhelming majority of winning bidders of foreclosure sales are the mortgage holders, who routinely elect to convey properties to VA instead of incurring the costs of managing and marketing the properties in their own REO portfolios. Upon accepting conveyance, VA pays an up-front property preservation and management fee, plus additional costs associated with maintaining, preserving, and marketing the property.

4. Auction sales may improve awareness among potential bidders and increases marketability,competition, and sale proceeds, when a mortgage servicer terminates a loan through an auction service. Increase to sale proceeds benefit the Veteran by potentially reducing the Veteran’s debt. Auctions generally shorten the amount of time the property remains on the market, thereby decreasing the risk of damage or vandalism. Such third-party sales at auction would save VA the costs of managing and marketing a property. Potential increases in sale proceeds are especially advantageous to servicers in situations where the total loan indebtedness exceeds the Net Value and VA pays the maximum guaranty. Holders may find it advantageous to pursue termination through an auction service, rather than having to waive a greater amount at foreclosure.

5. New. VA authorizes servicers to use an auction service in localities where available to complete the termination of a VA-guaranteed loan as opposed to a traditional foreclosure sale. The servicer must comply with VA regulations and determine the likelihood of increased sale proceeds. VA cannot recommend or advise which auction service to use. However, mortgage holders are accountable for the “selected auction service’s” failures to follow all federal, state, and local laws in addition to errors invalidating an auction sale.

6. As always, VA encourages servicers of VA-guaranteed home loans to explore all reasonable options to help Veterans retain their homes or avoid foreclosure. Once the mortgage servicer has exhausted all home retention and alternative to foreclosure options and determined foreclosure is unavoidable, the servicer may use an auction service to terminate the loan. The results of the auction must be equal to or higher than Net Value, as VA will only apply proceeds of sale equal to or greater than Net Value to the guaranty claim. All properties will be sold “AS IS” in accordance with financial matters pursuant to the terms set forth by the auction service to all bidders. VA does not provide financing for properties sold by foreclosure sale or auction.

7. Guidance to Servicers.

a. Priority of Review. VA expects servicers to exert all reasonable efforts to assist Veteran borrowers in retaining ownership of their homes or mitigating losses when retention is not possible. If the servicer has exhausted all loss mitigation efforts and determines the loan insoluble, they may use the traditional method of foreclosure or an auction service to terminate the loan.

b. Appraisal. Mortgage servicers must obtain a VA appraisal to determine the “Net Value.” At least 30 days prior to an auction sale, the holder must request that VA assign an appraiser to conduct a liquidation appraisal to establish fair market value. The “Net Value Factor” is applied to the fair market value to determine a Net Value bid.

c. Marketing. In order for auction expenses to be eligible for reimbursement on a VA claim, properties selected for an auction sale will be marketed for a minimum of 15 days prior to the scheduled sale and sold for an amount equal to, or greater than, the “Net Value Bid.” Mortgage servicers must ensure they employ a non-affiliated auction service to market properties to the greatest number of potential bidders possible. Auction services may use all marketing tools available including advertisement through television, radio, newspaper, and the internet to expose properties to potential buyers in multiple geographic regions. Marketing of the property should be designed to alert the largest number of potential buyers and provide those potential buyers a means to participate in the auction process. A mortgage servicer that employs an auction service meeting all VA auction marketing requirements will be eligible for reimbursement of auction fees on a successful sale without the actual calling or crying the sale.

d. Servicer Reporting Sale Results to VA. Servicers will continue to report bid results to VA through the VA Loan Electronic Report Interface (VALERI). Servicers will report the amount of the highest bidder to VA on the “Results of Sale” event in the VALERI application. The credit to indebtedness must equal or exceed the Net Value of the property securing the loan.

e. Servicer Claiming Fees Related to Termination Through an Auction Service. When a property is successfully sold at auction, VA will reimburse an “auction fee” up to 5 percent of the sales price at the time of claim submission. The “auction fee” will be reviewed by VA and considered payable up to the maximum guaranty amount of the loan. When submitting the claim under guaranty, the fee incurred must be included as a line item expense. VA will not pay an “auction fee” for homes offered at an auction sale, but not actually sold to a third party. If a property is conveyed to VA in error after a completed auction sale, the property will be reconveyed to the mortgage servicer and any acquisition paid, plus the costs associated with accepting and maintaining property in the VA REO portfolio, will be collected from the mortgage servicer.

f. VA foreclosure timeframes will not be extended to accommodate an auction sale. Mortgage servicers are expected to terminate insoluble loans in accordance with the “State Foreclosure Process and Statutory Bid Information” listed at http://www.benefits.va.gov/homeloans/servicers_valeri.asp and not increase the liability of the Secretary when liquidation is the most prudent course of action. The decision whether to pursue a second auction sale or to proceed with a traditional foreclosure to terminate a loan is not mandated by VA.

8. Guidance to VA Staff.

a. VA Claim Review. VA will review the auction fee as a line item at the time of guaranty claim submission to ensure the fee does not exceed 5 percent of the auction sale price.

b. Special Considerations. Regional Loan Center (RLC) management may contact VA Central Office (VACO) for guidance in unusual situations.

8. Rescission: This Circular is rescinded July 1, 2016.

By Direction of the Under Secretary for Benefits
Michael J. Frueh
Director, Loan Guaranty Service

Please click here to view the online Circular.

About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.

Texas Lawmakers Introduce Bill to Eliminate CFPB

Posted on September 13, 2018 by Safeguard

On July 22, DS News published an article discussing a bill sponsored by U.S Representative John Ratcliffe (R-TX) and U.S. Senator Ted Cruz (R-TX).

Texas Lawmakers Introduce Bill to Eliminate CFPB

Various legislation has been introduced by Republicans in an attempt to reduce the power of the Consumer Financial Protection Bureau (CFPB) in the last year, but there has not been any law proposed to completely eliminate the Bureau – until now.

During a week in which the Bureau celebrates the fourth anniversary of its creation, U.S. Representative John Ratcliffe and U.S. Senator Ted Cruz, both Republicans from Texas, have combined to sponsor a bill that would completely abolish the CFPB, according to announcements on both lawmakers’ websites.

Republicans believe the CFPB, which was created from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has had the opposite effect of its intended purpose of protecting consumers from predatory financial activity; rather, they believe the Bureau has made big banks bigger and limits options for consumers.

“Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumers,” said Cruz, who is a GOP candidate for the presidency in 2016. “The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether. The legislation that Representative Ratcliffe and I are introducing today gives Congress the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth. While there’s much more to do to scale back the harmful regulatory impositions of Dodd-Frank, this legislation takes a critical step in the right direction. So today let’s celebrate the CFPB’s fourth and final anniversary.”

Republicans believe that Bureau is unaccountable to the American people because unlike most federal agencies, the CFPB is not subject to Congressional appropriations despite being funded by the Federal Reserve. Cruz and Ratcliffe believe this situation “invites regulatory excess and abuse.”

Ratcliffe said he hears from small businesses in the fourth district of Texas, which includes the northeastern most part of the state, who say they can no longer provide their customers with basic financial services because of the increased compliance costs and paperwork hours imposed by the CFPB. He said many businesses are faced with the choice of closing their doors or consolidating into larger businesses due to the increasing cost of compliance.

“The CFPB’s regulatory zeal has stripped American consumers and businesses of their freedom of choice and has limited their access to capital – all in the name of a ‘we know best’ attitude from Washington,” Ratcliffe said. “. . .I’m grateful to be able to introduce this bill with 46 of my House colleagues in conjunction with Senator Cruz. The CFPB represents exactly what President Reagan warned of – a government smothering opportunity rather than fostering it. We must eliminate the CFPB.”

The GOP has made an extra push for CFPB reform since gaining a majority in the House and Senate last November. In March, Representative Sean Duffy (R-Wisconsin) introduced a series of proposals to reform the CFPB, including one co-sponsored by Randy Neugebauer (R-Texas) that would replace the CFPB’s director with a bipartisan, Senate-approved five-member committee.

In February, Representatives Steve Stivers (R-Ohio) and Tim Walz (D-Minnesota) revived a bipartisan bill that would create an independent Inspector General for the CFPB that is appointed by the president and approved by the Senate. The Bureau currently shares an IG with the Federal Reserve, a position that is appointed by the Fed chair and not subject to Senate approval.

Democrats have vowed to fight any attempt at cutting back on the CFPB’s power. Last week during a Senate Banking Committee hearing, Congressman Sherrod Brown (D-Ohio), Ranking Member of that Committee, pointed out the work the CFPB has done in the mortgage space.

“Much of the CFPB’s most important work has centered on mortgage regulation,” Brown said. “The agency’s ability to repay rules ensure that consumers are not trapped in mortgages that they cannot afford. The CFPB’s rule to streamline forms will help consumers understand what is happening at the closing table. All of these actions speak for themselves as to why this agency is so important to our nation’s consumers.

“Yet, opponents continue to work to undermine the agency – by weakening its independence or changing its structure. Lately, there have been attempts to chip away at actions the agency has taken on arbitration and small-dollar loans. They have argued the agency should not be able to collect data – data about markets that were formerly non-transparent and unregulated. I will continue to fight all of these attempts to destabilize the CFPB. Our consumers deserve a strong watchdog that can do its job independently, and it’s my job to make sure that happens.”

Please click here to view the article online.

Register for the Freddie Mac Default Campus in Dallas, Texas

Posted on September 13, 2018September 13, 2018 by Safeguard

On June 26, Freddie Mac released an update announcing two workshops taking place on August 4-5, 2015 that will be focused on effectively managing delinquent and default portfolios.

Register for the Freddie Mac Default Campus in Dallas, Texas

On August 4-5, 2015, we’re offering two workshops focused on helping you effectively manage your delinquent and default portfolio. Click on the course titles below to register.

Tuesday, August 4, 2015 9:00AM – 4:30PM Register Now!
Alternatives to Foreclosure Workshop

Wednesday, August 5, 2015 9:00AM – 4:30PM Register Now!
Managing Foreclosures Workshop

Join the Customer Education Team as we cover the following topics at the Freddie Mac Campus:

Alternatives to Foreclosure Overview: Improve your understanding of the Freddie Mac loss mitigation process in order to pursue alternatives to foreclosure that can help reduce your costs and enable you to assist the borrower.
Managing Foreclosure Overview: Learn best practices for managing your delinquent portfolio effectively to ensure compliance with Freddie Mac requirements for mortgages that are either approaching or past our standard time lines for each stage of the delinquency, as shown using Timeline ManagerSM.

More Information

Registration Fee, What to Wear, and Cancellation Policies.
Email our registrar with questions.
Visit The Freddie Mac Learning Center for other learning opportunities and educational resources.

Please click here to view the online update.

OCC Newsletter Focuses on Increasing Sustainable Loan Modifications and Reducing Foreclosures

Posted on September 13, 2018September 13, 2018 by Safeguard

On July 21, the Office of the Comptroller of the Currency (OCC) published a news release announcing the publishing of the latest edition of its Community Developments Investments electronic newsletter.

OCC Newsletter Focuses on Increasing Sustainable Loan Modifications and Reducing Foreclosures

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today published the latest edition of its Community Developments Investments electronic newsletter entitled “Hardest Hit Fund: State Programs to Improve Loan Modification Sustainability and Stabilize Communities.”

“There is no single solution for increasing sustainable loan modifications and reducing foreclosures,” said Comptroller of the Currency Thomas J. Curry. “This newsletter highlights one of the major federal initiatives – the Hardest Hit Fund – and features some of the collaborative programs that have allowed state housing finance agencies to implement solutions tailored to each area’s situation.”

The newsletter provide examples of how state housing finance agencies are implementing the Hardest Hit Fund program, such as by funding programs that provide principal reduction in conjunction with a loan modification, temporary mortgage assistance for unemployed borrowers, assistance to facilitate short sales, or funds to pay off second liens. It also describes efforts to address low-value abandoned properties in a way that complements the work being done by the state housing finance agencies. There is also a review of how foreclosure prevention and community stabilization activities may qualify for consideration in a bank’s Community Reinvestment Act examination.

This edition of Community Developments Investments is part of a group of resources available to national banks and federal savings associations interested in foreclosure prevention and neighborhood stabilization. These resources can be accessed on the OCC’s Web site at www.occ.gov.

Please click here to view the news release online.

Please click the following link for additional media coverage:

DS News (7/23/15)

MHA Supplemental Directive 15-06 Making Home Affordable Program-Streamlined Modification Process

Posted on September 13, 2018September 13, 2018 by Safeguard

On July 1, Making Home Affordable (MHA) issued an update titled Supplemental Directive 15-06: Making Home Affordable Program-Streamlined Modification Process.

Supplemental Directive 15-06

Making Home Affordable Program – Streamlined Modification
Process

In February 2009, the Obama Administration introduced the Making Home Affordable (MHA) Program to stabilize the housing market and help struggling homeowners obtain relief and avoid foreclosure. In March 2009, the U.S. Department of the Treasury (Treasury) issued uniform guidance for loan modifications by participants in MHA across the mortgage industry and subsequently updated and expanded that guidance. On June 1, 2015, Treasury issued version 4.5 of the Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages (Handbook), a consolidated resource for guidance related to the MHA Program for mortgage loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non-GSE Mortgages).

As described in more detail below, the Home Affordable Modification Program (HAMP) will now include a “streamlined” modification process (referred to as Streamline HAMP).
Streamline HAMP is designed to assist borrowers who meet basic HAMP eligibility criteria and, among others, those who have not completed an application by the time their loan is 90 days delinquent.

This Supplemental Directive provides guidance to servicers for implementation of Streamline HAMP for Non-GSE Mortgages. The mapping of the Handbook is expected to be issued in August and will delineate the changes thereto attributable to the guidance provided in this Supplemental Directive. Except where noted, the guidance set forth in this Supplemental Directive is effective January 1, 2016 (Effective Date). Except as indicated herein, HAMP guidelines of general applicability existing as of the date of this Supplemental Directive will apply to HAMP Tier 1, HAMP Tier 2 and Streamline HAMP modifications.

This Supplemental Directive applies to servicers that are subject to the terms of a servicer participation agreement and related documents (SPA) and that have a Program Participation Cap (as defined in the SPA) of $75,000,000 or more as of the date of this Supplemental Directive. However, all other servicers that are subject to the terms of a SPA are encouraged to adopt the guidance in this Supplemental Directive. This Supplemental Directive does not apply to mortgage loans that are owned, securitized or guaranteed by Fannie Mae or Freddie Mac (each, a GSE), or insured or guaranteed by the Veterans Administration, the Department of Agriculture’s Rural Housing Service (RHS) or the Federal Housing Administration (FHA).

This Supplemental Directive covers the following topics:

Servicer Participation
Investor Solicitation
Streamline HAMP Eligibility
Streamline HAMP NPV Tool
Streamline HAMP Modification Terms
Streamline HAMP Offer
Streamline HAMP Trial Period
Evaluation Upon Submission of an Initial Package
Streamline HAMP Permanent Modification
Borrower Notices
Incentive Compensation
Servicing Transfers
Compliance
Annual Certification
Treasury Reporting Requirements
Interaction with Other MHA Programs

Please click here to view SD-15-06 [pdf] in its entirety.

MHA HAMP Reporting Update September 2015 HAMP Reporting Tool Release Notes

Posted on September 13, 2018September 13, 2018 by Safeguard

On June 25, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled September 2015 HAMP Reporting Tool Release Notes.

HAMP REPORTING UPDATE

September 2015 HAMP Reporting Tool Release Notes

On September 1, 2015, the HAMP® Reporting System, including the HAMP Reporting Tool, will receive an update to
support the following:

Enhancement of Borrower “Pay for Performance” Incentives under HAMP, Treasury FHA-HAMP and RD-HAMP;
Recast of Loans Modified Under HAMP;
Dodd-Frank Certification Reporting for GSE Loans;
Servicer Incentive Increase for Completed Modifications;
Clarifications for GSE Repurchase Reporting;
Extension of Non-GSE HAMP, 2MP, Treasury FHA-HAMP, RD-HAMP and HAFA® Programs;
Interface File Changes and Edit updates; and
GSE-HAMP Extension.

Please refer to the Release Notes for more details on these updates.

Updated Data Dictionaries Posted

In connection with the September 2015 release, updated versions of the following Data Dictionaries were posted on HMPadmin.com:

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

Please click here to view the online update.

Meredith Fuchs Named Acting Deputy Director of the Consumer Financial Protection Bureau

Posted on September 13, 2018October 29, 2018 by Safeguard

On July 22, the Consumer Financial Protection Bureau (CFPB) issued a press release announcing the appointment of Meredith Fuchs as Acting Deputy Director when Deputy Director Steve Antonakes will leave the agency at the end of July.

Meredith Fuchs Named Acting Deputy Director of the Consumer Financial Protection Bureau

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today announced that Meredith Fuchs will serve as Acting Deputy Director when Deputy Director Steve Antonakes departs the agency at the end of July. Antonakes currently serves as both Deputy Director for the Bureau and Associate Director for the Division of Supervision, Enforcement, and Fair Lending. Earlier this month Fuchs announced her intention to step down as General Counsel, but she will continue to serve as General Counsel and Acting Deputy Director until a permanent replacement is selected for each position. David Bleicken, Deputy Associate Director for Supervision, Enforcement, and Fair Lending, will serve as Acting Associate Director for that division while a search for a replacement is conducted.

“Steve has been an enormous asset to the Bureau, and a great friend and colleague to me since the early days of the agency,” said CFPB Director Richard Cordray. “His contributions to this agency have been extensive in his dual roles as Deputy Director and Associate Director of Supervision, Enforcement, and Fair Lending and he will be sorely missed. Meredith’s experience and vision have helped build the Bureau since before we opened our doors, and I could not be more pleased that she has agreed to take on the role of Acting Deputy Director. I am deeply grateful to Steve and Meredith for their contributions to the CFPB and the American public we serve.”

Steve Antonakes

Steve Antonakes’ background includes more than two decades as a financial services regulator. He first joined the CFPB in November 2010 as the Assistant Director of Large Bank Supervision and was named the Associate Director for Supervision, Enforcement, and Fair Lending in June 2012. Antonakes began his professional career as an entry level bank examiner with the Commonwealth of Massachusetts Division of Banks in 1990. He served in numerous managerial capacities before being appointed by successive Governors to serve as the Commissioner of Banks from December 2003 until November 2010, becoming only the second career bank examiner to ever serve in that capacity. In addition, he served as the first state voting member of the Federal Financial Institutions Examination Council (FFIEC), as the Vice Chairman of the Conference of State Bank Supervisors (CSBS), and as a founding member of the governing board of the Nationwide Mortgage Licensing System (NMLS). Antonakes also received NeighborWorks America’s Government Service Award for his work in combatting foreclosures in March 2007. Antonakes received a Bachelor of Arts degree from Penn State University, a Masters of Business Administration from Salem State University, and a Doctorate of Philosophy in Law and Public Policy from Northeastern University.

Meredith Fuchs

Meredith Fuchs, who will now serve as Acting Deputy Director, is currently the General Counsel of the CFPB. She joined the Bureau in 2011 as Principal Deputy General Counsel before serving as Chief of Staff to CFPB Director Richard Cordray. Prior to joining the CFPB, she served as Chief Investigative Counsel of the United States House of Representatives Committee on Energy and Commerce. Previously, Ms. Fuchs held positions as Vice President and General Counsel of the National Security Archive at George Washington University, a litigation partner in private practice, the Supreme Court Assistance Project Fellow at the Public Citizen Litigation Group, and an officer on the D.C. Bar Board of Governors. She is the recipient of the American Library Association’s James Madison Award. Ms. Fuchs served as a law clerk for Judge Patricia M. Wald on the D.C. Circuit Court of Appeals and Judge Paul L. Friedman on the United States District Court for the District of Columbia. She is a graduate of the New York University School of Law and the London School of Economics and Political Science.

David Bleicken

David Bleicken, who will now serve as Acting Associate Director for the Division of Supervision, Enforcement and Fair Lending, is currently the Deputy Associate Director for that division. He joined the Consumer Bureau in June 2011 as counsel to Steve Antonakes in his capacity as Assistant Director for Large Bank Supervision. Prior to that, Mr. Bleicken was the Deputy Secretary of Banking for Non-Depository Institutions and Consumer Services at what is now known as the Pennsylvania Department of Banking and Securities. He is a graduate of the Beasley School of Law at Temple University and Carleton College.

Please click here to view the press release online.

GAO-15-670: Troubled Asset Relief Program: Treasury Could More Consistently Analyze Potential Benefits and Costs of Housing Program Changes

Posted on September 13, 2018September 13, 2018 by Safeguard

On July 6, the U.S. Government Accountability Office (GAO) released GAO-15-670, a report subtitled Troubled Asset Relief Program: Treasury Could More Consistently Analyze Potential Benefits and Costs of Housing Program Changes.

What GAO Found

Between February 2009 and May 2015, the U.S. Department of the Treasury (Treasury) disbursed approximately $16.3 billion of the $37.5 billion in Troubled Asset Relief Program (TARP) funds allocated to support housing programs. The number of new borrowers with permanent modifications added to the Home Affordable Modification Program (HAMP), the key component of these programs, began to decline in late 2013 but has stabilized at between 9,000 and 15,000 additions per month. Activity under HAMP Tier 1, the original modification for qualified borrowers seeking to reduce their mortgage payments to affordable levels (rates periodically reset), has gradually declined. HAMP Tier 2, a broader fixed rate modification announced in 2012, has gradually grown to account for the majority of new entrants. Since October 2014, Treasury has expanded incentives in order to draw new entrants into the programs and further assist existing participants.

In making program changes, Treasury took steps to assess their benefits and costs but did not fully meet all of the key elements of federal benefit-cost analysis guidance, and thus has limited assurance that the additional expenditures are an effective and efficient use of taxpayer dollars (see figure below). For example, it is unclear whether the recent changes, such as extending performance incentives to borrowers in the sixth year of their HAMP modification (estimated to cost $4-6 billion), will reduce redefaults. Treasury officials told GAO that borrower surveys confirmed that borrowers responded to performance incentives. But Treasury does not have the estimates needed to fully assess the effectiveness of this or other recent changes. Treasury officials said that program benefits and costs depended on unknown factors and macroeconomic trends and that program benefits were difficult to quantify. Office of Management and Budget guidance and GAO’s past work stress that analyzing benefits and costs can help decision makers choose among alternatives. Without full and comprehensive analyses, Treasury will be challenged to determine whether program changes are actually achieving desired goals and are an efficient use of taxpayer dollars.

Why GAO Did This Study

Treasury has allocated $37.5 billion in TARP funds to help struggling homeowners avoid potential foreclosure since 2009. The Emergency Economic Stabilization Act of 2008 includes a provision for GAO to report every 60 days on TARP activities. This 60-day report examines (1) the status of TARP-funded housing programs and (2) the extent to which Treasury’s analytic framework for considering recent program changes was consistent with federal guidance and best practices. To do this work, GAO analyzed borrower participation levels, reviewed program documentation, and interviewed Treasury officials.

What GAO Recommends

To bring greater rigor and efficiency to decisions about the use of federal funds, GAO recommends that Treasury develop and implement policies and procedures that establish a standard process to better ensure that TARP-funded housing program changes are based on benefit-cost analyses that meet key elements. Treasury agreed to consider applying GAO’s recommendation going forward.

For more information, contact Mathew Scire at (202) 512-8678 or sciremj@gao.gov.

Please click here to view the report highlights in their entirety.

Please click here to view the report [pdf] in its entirety.

Freddie Mac: Check Out Our Newly Updated Investor Reporting Web Page

Posted on September 13, 2018September 13, 2018 by Safeguard

On July 16, Freddie Mac released an update detailing changes made to its Investor Reporting Web Page.

Check Out Our Newly Updated Investor Reporting Web Page

We’ve updated our Freddie Mac Investor Reporting Web page with information, management tools and training that make it easier than ever for you to improve investor reporting accuracy and keep your Freddie Mac portfolio on track.

We’ve also changed the name of the tab on our Servicing Web page from Investor Accounting to Investor Reporting to reflect our focus on the four R’s, which help you:

Report principal and interest collection activity for each mortgage on a monthly basis.
Remit funds due to Freddie Mac.
Resolve reporting and remitting discrepancies.
Reconcile your Freddie Mac custodial accounts.

What’s New

Every two months, we’ll update the Investor Reporting tab with a new information spotlight to help you better manage various aspects of investor reporting. The July/August spotlight is on avoiding common edits such as Edit Codes 600 and 700, with a reminder to answer common questions by accessing our Resolving Loan Level Edits Quick Reference Guide [pdf].

Bookmark this Web page and make our Investor Reporting tab your one-stop shop for policy updates, links to training and resources, and easy access to technology tools such as Service Loans application, Servicer Performance Profile, and Remedy ManagerSM.

Training

Please register for our free webinar training on August 11: Investor Accounting: Resolving Loan-Level Edits.

For More Information

Visit Freddie Mac’s Learning Center for additional information on our training programs and references tools.
Stay connected to Investor Reporting Web page updates and the latest Single-Family news. Sign up for the Single-Family Week in Review and receive a summary of the previous week’s Single-Family news and announcements every Monday morning.
Contact your Freddie Mac representative.

Please click here to view the update online.

FHLMC Guide Bulletin 2015-11 Announces Borrower Solicitation and Effective Date Changes

Posted on September 13, 2018September 13, 2018 by Safeguard

On July 8, Freddie Mac released an update titled Guide Bulletin 2015-11 Announces Borrower Solicitation and Effective Date Changes.

Guide Bulletin 2015-11 Announces Borrower Solicitation and Effective Date Changes

In today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2015-11, we’re:

Updating Guide Exhibit 93 to incorporate the Freddie Mac MyCity Modification in the borrower evaluation hierarchy for loss mitigation alternatives; and
Extending the effective date for changes related to filing reimbursement claims on REO expenses announced in Guide Bulletin 2015-5 [pdf].

Please read Guide Bulletin 2015-11 for full details on these updates.

Resources

Check out our Summary of Upcoming Requirement Changes [pdf], which provides you with a comprehensive list of upcoming requirement changes by effective date.
Vacation plans? Stay connected with the Single-Family Week in Review. You’ll receive a summary of all the previous week’s news and announcements every Monday morning.

For More Information

Read Guide Bulletin 2015-11 [pdf].
Visit Freddie Mac’s Learning Center for information on our training programs and references tools.
Contact your Freddie Mac representative.

Please click here to view the online update.

Please click here to view Guide Bulletin 2015-11 [pdf].