Page 399 – Safeguard Properties

FHFA Directs Fannie Mae and Freddie Mac to Change Requirement Relating to Sales of Existing REO

Posted on September 13, 2018 by Safeguard

On November 25, the Federal Housing Finance Agency (FHFA) published a news release announcing its direction of Fannie Mae and Freddie Mac to alter one of their policies relating to the sale of real estate owned (REO) properties in their current inventory.

News Release

FHFA Directs Fannie Mae and Freddie Mac to Change Requirement Relating to Sales of Existing REO

FOR IMMEDIATE RELEASE

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today directed Fannie Mae and Freddie Mac (the Enterprises) to alter one of their policies relating to the sale of real estate owned (REO) properties in their current inventory. The change will permit the two companies to sell existing REO properties to any qualified purchaser at the property’s fair-market value, as determined by the Enterprises.

Prior to today’s directive, the Enterprises required homeowners who have been through foreclosure and want to buy their home back to pay the entire amount owed on the mortgage. This requirement similarly applied to anyone buying the home for the benefit of the previous homeowner. Under the new policy change for existing REO properties, former homeowners who are able to repurchase their home – or a third-party able to purchase on their behalf – may do so under the fair-market value policy that already applies to other purchasers of REO properties.

The policy change is limited to Fannie Mae and Freddie Mac REO inventory of single-family homes as of November 25, 2014. Fannie Mae and Freddie Mac have approximately 121,000 properties in their combined REO inventory. Certain property exclusions may apply and will be handled by the Enterprises on a case-by-case basis.

“This is a targeted, but important policy change that should help reduce property vacancies and stabilize home values and neighborhoods,” said FHFA Director Melvin L. Watt. “It expands the number of potential buyers of REO properties and is consistent with the Enterprises’ practice of requiring fair-market value for those properties.”

Under existing Enterprise rules, former borrowers must wait a minimum of three years after a foreclosure to be eligible to receive a loan purchased or guaranteed by Fannie Mae or Freddie Mac. The purchase of an REO property for the benefit of the previous owner must also still be intended for use by that owner as their principal place of residence.

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

Please click here to view the news release online.

About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally.
Website: www.safeguardproperties.com.

FHFA Announces Miami HARP Outreach Event Dec. 5

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

On November 19, the Federal Housing Finance Agency (FHFA) published a news release announcing its fourth event to reach homeowners who are eligible for the Home Affordable Refinance Program (HARP).

News Release

FHFA Announces Miami HARP Outreach Event Dec. 5

Florida Has Most Homeowners in U.S. Eligible for Refinance Program

FOR IMMEDIATE RELEASE

?Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced it will hold its fourth event to reach homeowners who could save as much as $200 per month through the Home Affordable Refinance Program (HARP). FHFA Director Mel Watt will join housing experts and community leaders on December 5 in a town hall-style meeting at Miami Dade College North Campus in Miami, Florida. The event is designed to provide tools to community leaders to encourage the more than 21,000 Miami area residents still eligible to take advantage of HARP.

“We will be working with community leaders and other trusted sources to get the word out that more than 97,000 homeowners in Florida are still eligible for and can save money by refinancing through HARP,” said FHFA Director Watt. “We will also be providing information about the range of assistance available to homeowners in distress other than those who are eligible for HARP.”

Director Watt will kick off the event and Maria Fernandez, Associate Director for the Office of Housing and Regulatory Policy at FHFA, will moderate a panel discussion including representatives from the U.S. Department of the Treasury, Fannie Mae, Freddie Mac, Ditech Mortgage Corporation/Green Tree Servicing, and a representative with Consolidated Credit Solutions in Miami.

According to new data from the FHFA, as of the second quarter, there are more than 722,000 eligible homeowners nationwide who would benefit financially from HARP, with more than 97,000 in Florida alone. This includes more than 21,000 in Miami, 17,000 in Tampa, more than 11,000 in Orlando, and more than 9,000 in Jacksonville. FHFA’s interactive map of the U.S. shows HARP-eligible borrowers by Metropolitan Statistical Area, county, or zip code.

To be eligible for HARP, homeowners must meet the following criteria:

Their loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
Their mortgage must have been originated on or before May 31, 2009.
Their current loan-to-value ratio must be greater than 80 percent.
They must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

Borrowers generally benefit from HARP if they meet those criteria and have a remaining balance of $50,000 or more on their mortgage, have a remaining term on their mortgage of greater than 10 years, and their mortgage interest rate is at least 1.5 percent higher than current market rates.

FHFA and the Treasury Department introduced HARP in early 2009 as part of the Making Home Affordable program. As of August 2014, more than 3.2 million homeowners have refinanced through HARP. HARP is one of the few refinance programs that allows borrowers with little or no equity to take advantage of low interest rates and other refinancing benefits.

FHFA launched a nationwide public awareness campaign and the website HARP.gov and HARP.gov/espanol? to reach borrowers who are eligible to participate in HARP. FHFA has held HARP outreach events in Chicago, Atlanta, and Detroit, the cities with the highest number of eligible borrowers. Follow @FHFA on Twitter for information on the Miami event.

?Link to HARP Toolkit?

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

Please click here to view the news release online.

FHA #INFO 14-69 Increasing Use of FHA’s Claims Without Conveyance of Title Procedures

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

On November 26, the U.S. Department of Housing and Urban Development (HUD) released single family housing news and updates in FHA INFO #14-69.

TO: All FHA-Approved Mortgagees

What’s New

Increasing Use of FHA’s Claims Without Conveyance of Title Procedures

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2014-24 entitled, “Increasing Use of FHA’s Claims Without Conveyance of Title Procedures”, the purpose of which is to notify mortgagees that the Commissioner’s Adjusted Fair Market Value1 (CAFMV) must be used at a foreclosure sale or during any Post-Foreclosure Sale Effort for properties sold through this procedure.

This policy is expected to decrease the number of property conveyance claims being filed as such claims result in greater losses to FHA’s Mutual Mortgage Insurance Fund. This Mortgagee Letter is effective for all foreclosure sales and Post-Foreclosure Sale Efforts associated with defaulted FHA-insured mortgages, scheduled on or after February 1, 2015.

1 FHA is permitting, but not requiring, the use of the CAFMV for Small Servicers (i.e., those servicers that either (a) service, together with any affiliates, 5,000 or fewer loans, all of which the servicer (or an affiliate) is the creditor or assignee; or (b) servicers that are Housing Finance Agencies as defined in 24 CFR 266.5).

Quick Links and Resources

View Mortgagee Letter 2014-24 at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee
Call HUD’s National Servicing Center at (877) 622-8525 or send an email to cwcot@hud.gov
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 and phone messages will be responded to during normal hours of operation, 8:00 a.m. to 8:00 p.m., ET, 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 Information Relay Service at 1-800-877-8339.

Please click here to view the online update in its entirety.

FHA Extends Short Refi Program for Two More Years

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

On November 26, National Mortgage News published an article detailing the Federal Housing Administration’s extension of a principal reduction program through 2016.

FHA Extends Short Refi Program for Two More Years

The Federal Housing Administration has extended a principal reduction program for two years that helps borrowers refinance into FHA-insured loans.

The short refinance program was first authorized by Congress in 2008 to assist non-FHA borrowers that are underwater. It has evolved over time and is now being extended through 2016.

The FHA approved 1,660 short refis in 2013 with a total original mortgage amount of $238 million. During the first 10 months of this year, nearly 1,330 short refis have been completed, according to the agency.

In an FHA short refi, the investor must agree to write down the principal balance by at least 10% and ensure the refinancing results in a loan-to-value ratio of 97.75%. Once the refinancing is complete, the loans can be sold in Ginnie Mae mortgage-backed securities.

Bob Bodell, a vice president at Bloomington Ill.-based MSI, welcomed the two-year extension. He noted there is “still a need for the program,” which is evident from all the nonperforming single-family loan sales. Going forward, he expects FHA short refi volume will remain at current levels.

“Some of the competition has gone away,” he said. “The loans are time consuming and sometimes difficult to do. But that is all we do at our [Frederick, Md.] branch. So we have become very good at it.”

Hedge funds and other investors that buy distressed loans generally turn to MSI or its competitors to refinance underwater loans once the borrowers are current.

In the case of a delinquent borrower, the servicer is responsible for completing the trial payment process so the borrower can qualify for a FHA short refi.

“It is very good for the borrower,” Bodell said. “It puts them in a whole new economic picture.”

During the short refinancing transaction, MSI pays off the investor and acquires the manually underwritten FHA-insured mortgage.

“It is one of the main ways a hedge or investor can liquidate the loan,” the MSI vice president said. Then MSI turns around and sells the new loan in a Ginnie Mae securitization.

FHA conducts periodic sales of its nonperforming loans to investors. In September, it sold 14,000 delinquent loans that are stripped of FHA mortgage insurance.

Bodell would like FHA to expand its short refi program so it could be used to refinance those former FHA loans. “But it hasn’t been done yet,” he said.

MSI is a wholly owned subsidiary of First State Bank in Mendota, Ill.

Please click here to view the article online.

Please click here to view HUD’s Mortgagee Letter 2014-23 online.

Fed Finalizes Merger Rule for Financial Institutions

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

On November 10, DS News published an article discussing the recent ruling of the U.S. Federal Reserve Board to implement section 622 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Fed Finalizes Merger Rule for Financial Institutions

The U.S. Federal Reserve Board recently issued a final rule to implement section 622 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The new rule, which goes into effect on January 1, 2015, prohibits a financial company from combining with another company if the liabilities of the newly formed company between the two exceed 10 percent of aggregate consolidated liabilities of all financial companies.

A financial institution’s liabilities are typically defined as the difference between risk-weighted assets and total regulatory capital, with the assets adjusted to include exposures from the regulatory capital. Generally accepted accounting standards would be used to measure liabilities for firms that are not subject to consolidated risk-based capital rules. Institutions that are required to comply with the rule include depository institutions and companies that control insured depository institutions, bank holding companies, savings and loan holding companies, foreign banking organizations, and non-bank entities the Financial Stability Oversight Council for Board Supervision should designate.

Based on comments made in the last few months, the Fed made minor changes to the rule, which was originally proposed in May. The company cannot acquire control of another company under merchant banking authority of the company has exceeded the 10 percent limit. There is an exemption in the final rule, however, that allows a financial company to continue securitization if it has gone over the 10 percent limit.

Please click here to view the article online.

Fannie Mae SVC-2014-20 Introducing the New Single-Family Servicing Guide

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

On November 12, Fannie Mae released Servicing Guide Announcement SVC-2014-20, subtitled Introducing the New Single-Family Servicing Guide.

Servicing Guide Announcement SVC-2014-20

Introducing the New Single-Family Servicing Guide

Fannie Mae is announcing the publication of the new Single-Family Servicing Guide (“Servicing Guide”), which will replace the 2012 Servicing Guide (as updated by Announcements) in its entirety.

Goals of the New Servicing Guide

Fannie Mae’s goals in creating the newly restructured and rewritten Servicing Guide were to make it easier for servicers to do business with Fannie Mae. The new Servicing Guide

makes it easier to locate servicing-related policies and requirements;
streamlines policy content by moving the procedural requirements to new separate Servicing Guide Procedures;
increases readability by using tables, bulleted lists, and more descriptive topic titles; and
allows for real-time updates as policies and requirements change.

Organization of the New Content

The new Servicing Guide is organized into parts that reflect the organization of a servicer’s operations. The structure within each part is further divided into subparts, chapters, sections, and topics that closely follow the mortgage loan lifecycle. All Fannie Mae servicing policies and requirements in the new Servicing Guide are located at the topic level. See the Servicing Guide Preface for an example of topics included by part and an overview of the new numbering system (similar to the numbering system of the Fannie Mae Single-Family Selling Guide).

Similarly, Servicing Guide Procedures are included in part F and are divided into documents based on servicing functional area or responsibility, which may serve as stand-alone reference documents.

Contents of the new Servicing Guide

The new Servicing Guide contains policies and requirements from the 2012 Servicing Guide, as amended through Announcements issued since September 2, 2011. All Announcements issued through October 17, 2014, have been incorporated into the new Servicing Guide.

With the new Servicing Guide, Fannie Mae

removed policies that are not required or duplicative,
aligned certain content to be consistent with the Selling Guide, and
added new policies that are being communicated through this Announcement.

Please click here to view the announcement in its entirety.

Fannie Mae Standard Modification Rate Adjustment

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

On November 7, Fannie Mae released a Servicing Notice announcing the new Standard Modification Interest Rate required for all Fannie Mae conventional mortgage loan modifications.

Servicing Notice

Fannie Mae Standard Modification Interest Rate Adjustment

Fannie Mae is adjusting the Fannie Mae Standard Modification Interest Rate required for all Fannie Mae conventional mortgage loan modifications, excluding Fannie Mae HAMP Modifications. The servicer must implement the new interest rate indicated on the Fannie Mae Standard Modification Interest Rate Exhibit for any mortgage loan modification evaluation conducted on or after November 14, 2014.

NOTE: As a reminder, the interest rate used to determine the final modification terms must be the same fixed interest rate that was used when determining eligibility for the Trial Period Plan and calculating the Trial Period Plan payment.

Please click here to view the Servicing Notice online.

Fannie Mae LL-2014-16 Advance Notice of Future Changes to Investor Reporting Requirements

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

On November 13, Fannie Mae released Lender Letter LL-2014-16, subtitled Advance Notice of Future Changes to Investor Reporting Requirements.

Lender Letter LL-2014-06

To: All Fannie Mae Single-Family Servicers

Advance Notice of Future Changes to Investor Reporting Requirements
This Lender Letter provides advance notification to servicers of upcoming changes to the following Fannie Mae investor reporting requirements:

Elimination of Mortgage Backed Security (MBS) Pool Balance Reporting
Changes to Due Dates for Fannie Mae Monthly Investor Reporting

Effective Date
The target effective date for the policies in this Lender Letter is during the third quarter of 2016; servicers will be notified once a specific effective date is established. Fannie Mae will conduct servicer outreach to provide additional information on implementation requirements prior to the effective date.

Elimination of MBS Pool Balance Reporting
Servicing Guide A1-4.2-01, Compensatory Fees Other Than Delays in the Liquidation Process

When these changes are implemented, the servicer will no longer be required to

report aggregate security balances for each MBS pool serviced,
reconcile the actual mortgage loan balance for all scheduled/scheduled remittance type mortgage loans that are in any given MBS pool to the aggregate security balance for that pool (or the servicer’s portion of that pool), or
pay compensatory fees for late or inaccurate reporting of MBS security balances and multiple wire transfers of MBS pool remittances.

Please click here to view the letter in its entirety.

Fannie Mae LL-2014-08 Confirmation of Conventional Loan Limits for 2015

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

On November 25, Fannie Mae released Lender Letter LL-2014-08, subtitled Confirmation of Conventional Loan Limits for 2015.

Lender Letter LL-2014-08

To: All Fannie Mae Single-Family Sellers and Servicers

Confirmation of Conventional Loan Limits for 2015

The Federal Housing Finance Agency (FHFA) has issued the maximum loan limits that will apply to conventional loans to be acquired by Fannie Mae in 2015. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits. The maximum loan limits for 2015 remain unchanged from 2014; however, a number of high-cost area county limits have increased.

Please click here to view the letter in its entirety.

Fannie Mae LL-2014-07 Updates to Compensatory Fees

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

On November 17, Fannie Mae released Lender Letter LL-2014-07, subtitled Updates to Compensatory Fees for Delays in the Liquidation Process, Foreclosure Time Frames and Allowable Foreclosure Attorney Fees.

Lender Letter LL-2014-07

To: All Fannie Mae Single-Family Servicers

Updates to Compensatory Fees for Delays in the Liquidation Process, Foreclosure Time Frames and Allowable Foreclosure Attorney Fees

Updates to Compensatory Fees
Servicing Guide A1-4.2-02, Compensatory Fees for Delays in the Liquidation Process

Establishment of Minimum Aggregate Billing
Effective with foreclosure sales completed on or after January 1, 2015, for a given month, a servicer will not be assessed a compensatory fee for delays in connection with a completed foreclosure if the servicer’s aggregate amount for that month’s compensatory fees is $25,000 or less. Furthermore, compensatory fees will not be carried over to the following month’s invoice, if any.

Temporary Suspension of Compensatory Fee Assessments in Certain Jurisdictions
The assessment of compensatory fees will be temporarily suspended in the following four jurisdictions, effective for foreclosure sale dates on or after January 1, 2015:

District of Columbia,
Commonwealth of Massachusetts,
State of New Jersey, and
State of New York.

The suspension will last, at a minimum, for foreclosure sale dates through June 30, 2015. At the conclusion of the suspension period, Fannie Mae will update allowable foreclosure time frames for these jurisdictions and will retroactively apply their foreclosure time frames to foreclosure sale dates on or after January 1, 2015, as applicable. Upon completion of the suspension and retroactive revisions to each jurisdiction’s allowable foreclosure time frame, the servicer will be billed in arrears for any compensatory fees incurred during the suspension period in a supplemental monthly billing, if applicable.

The servicer will be notified of when to expect these supplemental monthly invoices and separate periods for the appeal process prior to a supplemental billing will be identified.

These policy changes will be reflected in the January 2015 monthly update of the Servicing Guide.

Updates to Foreclosure Time Frames

Fannie Mae is increasing the maximum number of allowable days for routine foreclosure proceedings for 47 jurisdictions, effective for foreclosure sales completed on or after November 1, 2014. Please review the updated foreclosure time frames in Foreclosure Time Frames and Compensatory Fee Allowable Delays on Fannie Mae’s website.

Updates to Allowable Foreclosure Attorney Fees

Fannie Mae is updating the maximum allowable foreclosure attorney fees for all Fannie Mae mortgage loans secured by properties located in 50 jurisdictions.

The updated fees apply to all matters referred to counsel for initiation of foreclosure on or after June 1, 2012, by the present or prior servicer, provided the matter is still active as of the date of this Lender Letter; except, however, the fee in Connecticut for a Foreclosure by Market Sale is effective for foreclosure referrals on or after January 1, 2015.

For purposes of this Lender Letter, the term “active” is defined as a foreclosure matter that has not yet gone to foreclosure sale, or has not been concluded by some other event, such as a Mortgage Release™, short sale, mortgage loan modification, payoff, or reinstatement.

NOTE: The Allowable Foreclosure Attorney Fees Exhibit on Fannie Mae’s website has been updated to reflect these changes and to update certain footnote annotations.
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Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie Mae’s National Servicing Organization’s Servicer Support Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Lender Letter.

Malloy Evans
Vice President
National Servicing Organization

Please click here to view the letter online.