Safeguard Properties

FHLMC Guide Bulletin 2014-23 Servicing Updates

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On December 8, Freddie Mac released an update titled Guide Bulletin 2014-23: Servicing Updates.

Guide Bulletin 2014-23 Announces Time-Saving Additions and Revisions

Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-23 announces additions and revisions to improve our processes and response times. All changes announced in Guide Bulletin 2014-23 are effective immediately.

What’s Changing and What It Means for You

One simple change can make a difference. With these changes announced today, we’ll be able to streamline processes and respond to you quicker, while saving you time and money:

  • New Charge-off Requirements. Filing and settling any property insurance claims with property insurers before sending Freddie Mac mortgage charge-off recommendations will help speed up our decision-making time.
  • New Submissions Process for Mortgage Modifications with Partial Prepayments. We’re requiring a copy of the fully executed mortgage modification agreement that results in reduced monthly principal and interest payments due to partial principal curtailments.
  • Limited Reporting for Distressed Properties. Please report any mortgage secured by a distressed property to Freddie Mac using the contact information provided in Guide Directory 5 only when there is a risk of property ownership. 
  • Waiting Period for Approving Changes to Mortgaged Premises. You must wait at least one year from the origination date before approving requests to release a portion of the mortgaged premises or grant borrowers an easement.
  • Reduced Fees for Interior and Exterior Property Valuations with Photographs.

Additional Updates Announced in Guide Bulletin 2014-23

  • Creating a new email account for you to submit limited power of attorney requests.
  • Updating  Form 960, Agreement for Concurrent Transfer of Servicing of Single-Family Mortgages, to help you identify refinance mortgages originated under the Home Affordable Refinance Program® when submitting a Transfer of Servicing.
  • Removing and retiring several outdated Guide forms and exhibits.

For More Information

Please click here to view the online update.

Please click here to view Guide Bulletin 2014-23 [pdf].

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 AB 2014-07 Oversight of Single-Family Seller/Servicer Relationships

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On December 1, the Federal Housing Finance Agency (FHFA) released Advisory Bulletin AB 2014-07, titled Oversight Of Single-Family Seller/Servicer Relationships.

FEDERAL HOUSING FINANCE AGENCY

ADVISORY BULLETIN

AB 2014-07

OVERSIGHT OF SINGLE-FAMILY SELLER/SERVICER
RELATIONSHIPS

Purpose

This advisory bulletin communicates the Federal Housing Finance Agency’s (FHFA) supervisory expectation that Fannie Mae and Freddie Mac (collectively, the Enterprises) maintain the safety and soundness of their operations by effectively managing counterparty risks.  FHFA expects each Enterprise to assess financial, operational, legal, compliance, and reputation risks associated with its single-family Seller/Servicer counterparties and to take appropriate action to mitigate those risks or reduce the Enterprise’s exposure.  Toward this end, each Enterprise should implement a board-approved risk management framework that specifically includes risk-based oversight of single-family Seller/Servicers.  Enterprise oversight should be performed pursuant to policies and procedures as described in this advisory bulletin.

Background

The business relationships between the Enterprises and Seller/Servicers are a fundamental component of the Enterprises’ delegated business models.  Seller/Servicers engage in business transactions with and on behalf of the Enterprises, principally selling loans and performing servicing functions, under the terms of each Enterprise’s respective selling and servicing guide and other contractual provisions.  The term “Seller/Servicer” as used in this advisory bulletin includes all entities that sell single-family mortgage loans to the Enterprises or perform single-family mortgage loan servicing for the Enterprises.

Seller/Servicers may engage in all aspects of a mortgage loan’s lifecycle or specialize in phases of the lifecycle (e.g., servicing delinquent mortgage loans).  Individual Seller/Servicers may present unique risks due to their organizational structure and complexity; operational and technological AB 2014-07 (December 1, 2014) Public capabilities and capacity; experience; access to financial resources, both funding and capital; and
scope of regulatory oversight.

Please click here to view the bulletin in its entirety.

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.

Fannie Mae Taps Reinsurance Industry in New Risk Sharing Transaction

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On December 10, Fannie Mae published a news release announcing its completion of a new credit risk sharing transaction.

Fannie Mae Taps Reinsurance Industry in New Risk Sharing Transaction

WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced today that it has completed a new credit risk sharing transaction that further diversifies its counterparty exposure and reduces taxpayer risk by increasing the role of private capital in the mortgage market. The credit insurance risk transfer (CIRT™) deal shifts credit risk on a pool of loans to a panel of domestic reinsurers. The CIRT deal also furthers the 2014 Conservatorship Scorecard goal to complete a variety of credit risk sharing transactions in addition to the company’s Connecticut Avenue Securities (CAS) series.

“This unique transaction uses actual losses to calculate benefits, for which risk investors have expressed a preference,” said Andrew Bon Salle, Executive Vice President, Single-Family Underwriting, Pricing and Capital Markets. “This deal complements our current risk sharing offerings focused on capital markets investors and mortgage insurers, and we expect it will be a template for similar transactions that we may execute in the future. The reinsurance market is an attractive potential source of private capital because it currently bears a small amount of U.S. residential mortgage risk. We are pleased to test new and innovative ways to diversify our risk sharing counterparties and to structure this deal in a manner that promotes efficiency and safety.”

In this transaction, CIRT-2014-1 which became effective November 1, 2014, Fannie Mae retains risk on the first 50 basis points of loss on a $6.419 billion pool of loans. If this layer is exhausted, Fannie Mae is provided actual loss coverage for the next 300 basis points of loss on the $6.419 billion pool, up to a maximum coverage of approximately $193 million. The coverage term is 10 years. Depending upon the pay down of the pool and the amount of covered loans that may become seriously delinquent, the aggregate coverage amount may be reduced at the 3-year, 5-year and 7-year anniversaries from the effective date.

The reference loan pool for the transaction consists of 30-year fixed rate loans with loan-to-value (LTV) ratios between 60 and 95 percent. The loans were acquired by Fannie Mae from January through March of 2014. Loans over 80 percent LTV are already covered by primary mortgage insurance, and this credit risk transfer provides supplemental coverage for losses that exceed that covered by primary mortgage insurance.

More information on Fannie Mae’s credit risk transfer activities is available at
http://www.fanniemae.com/portal/funding-the-market/credit-risk/index.html.

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.

Fannie Mae SVC-2014-22 Updates to the Fannie Mae MyCity Modification

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On December 18, Fannie Mae released Servicing Guide Announcement SVC-2014-22, subtitled Updates to the Fannie Mae MyCity Modification. 

Servicing Guide Announcement SVC-2014-22

Updates to the Fannie Mae MyCity Modification

Fannie Mae is amending its policies and requirements for the Fannie Mae MyCity Modification to, among other things, delegate approval of the modification terms to the servicer based on these policy changes, and expand the workout option to include eligible properties located in Cook County, Illinois. This Announcement replaces Servicing Guide D2-3.2-11, Fannie Mae MyCity Modification and F-1-20, Processing a Fannie Mae MyCity Modification in their entirety.

Policy Change Effective Date

The servicer is encouraged to implement the policy changes in this Announcement immediately, but must implement these policy changes no later than April 1, 2015.

Date of Servicing Guide Update

The content as shown in this Announcement will be reflected in the January 2015 update of the Servicing Guide.

D2-3.2-11, Fannie Mae MyCity Modification

Introduction

This topic contains the following:

  • Determining Eligibility for a Fannie Mae MyCity Modification
  • Performing an Escrow Analysis
  • Evaluating a Borrower Whose Mortgage Loan Is Current or Less Than 90 Days Delinquent
  • Evaluating a Borrower Whose Mortgage Loan Is Equal to or Greater Than 90 Days Delinquent
  • Determining the Fannie Mae MyCity Modification Terms
  • Soliciting a Borrower Whose Mortgage Loan is Equal to or Greater Than 90 Days Delinquent
  • Offering a Trial Period Plan and Completing a Fannie Mae MyCity Modification
  • Processing a Fannie Mae MyCity Modification for a Mortgage Loan with Mortgage Insurance
  • Handling Fees and Late Charges in Connection with a Fannie Mae MyCity Modification
  • Handling a Default on a Fannie Mae MyCity Modification

Please click here to view the announcement in its entirety.

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.

Fannie Mae SVC-2014-21 Servicing Guide Upates

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On December 10, Fannie Mae released Servicing Guide Announcement SVC-2014-21, subtitled Servicing Guide Updates.

Servicing Guide Announcement SVC-2014-21

Servicing Guide Updates

The Servicing Guide has been updated to include the following:

  • Updates to Insured Loss Events
  • Updates to Mortgage Release Incentive Payments
  • Miscellaneous Revision

Each of these updates is described below. The servicer must review each topic in the Servicing Guide in its entirety to gain a full understanding of the policy change(s).

Insured Loss Events

Servicing Guide B-5-01, Insured Loss Events has been updated as follows:

Effective Date

The servicer is encouraged to implement the new policies immediately, but must implement no later than February 1, 2015.

Mortgage Release Incentive Payments

Servicing Guide D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure) has been updated as follows:

Effective Date

The servicer is encouraged to implement the additional borrower incentive payment for any Evaluation Notice issued for a Mortgage Release on or after December 10, 2014; however, the servicer is required to implement the additional borrower incentive payment when the servicer issues the Evaluation Notice for a Mortgage Release on or after February 1, 2015. The additional borrower incentive payment will expire on December 1, 2015; therefore, the servicer must have issued the Evaluation Notice for a Mortgage Release on or before December 1, 2015 for the borrower to receive the additional incentive payment.

NOTE: The Evaluation Notices Exhibit has been revised to indicate the incentive amount as a fill-able field to
comply with these changes.

  • Clarified that the borrower incentive must be paid for a completed Mortgage Release with a 3-month or 12-month transition option within 30 days after the property becomes vacant.

Effective Date

Effective immediately.

Miscellaneous Revision

Defined Expense Reimbursement Limits in F-1-6, Expense Reimbursement has been revised to correct a typo to the maximum reimbursable amount for an interior property inspection to $20/inspection.

*****

The servicer 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 Announcement.

Malloy Evans
Vice President
National Servicing Organization

Please click here to view the announcement 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.

Fannie Mae National Housing Survey Results Mirror Uneven 2014 Activity, Support Forecast for Gradual Recovery in 2015

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On December 8, Fannie Mae published a release titled National Housing Survey Results Mirror Uneven 2014 Activity, Support Forecast for Gradual Recovery in 2015.

National Housing Survey Results Mirror Uneven 2014 Activity, Support Forecast for Gradual Recovery in 2015

WASHINGTON, DC – Results from Fannie Mae’s November 2014 National Housing Survey show that Americans’ attitudes toward housing have tracked closely with the uneven 2014 housing market trend, which is improving but lagging behind the overall economy trend. According to the survey results, consumers’ personal financial outlook has increased fairly steadily during the year, lending support to the ongoing housing market recovery. The share of respondents who expect mortgage rates to go up in the next 12 months decreased again to 45 percent, in line with a gradual but uneven decline since the beginning of the year. On the other hand, the share who believe it is a good time to buy and sell a home moved further apart. Sixty-eight percent of consumers now say it is a good time buy, an increase of 3 percentage points, compared to 39 percent who say it is a good time to sell, a 5 percentage point drop.

“November’s National Housing Survey results support the 2014 trend of gradual, but often sporadic and unspectacular, improvement across a range of indicators measuring consumer attitudes toward housing – mirroring the uneven recovery in housing activity this year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “More encouraging is the steady upward trend this year in consumers’ assessment of their personal finances, with 46 percent of Americans – near the survey’s high – expecting their personal financial situation to improve over the next 12 months. We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects. However, a sustained improvement in sentiment that could support a robust housing recovery, as policy support is removed, will require meaningful gains in household income. While such gains have so far been elusive, the strength in the November jobs report, which points to faster growth in labor income in the current quarter, marks a good start.”

SURVEY HIGHLIGHTS

Homeownership and Renting

  • The average 12-month home price change expectation fell to 2.6 percent.
  • The share of respondents who say home prices will go up in the next 12 months remained at 44 percent. The share who say home prices will go down decreased to 6 percent.
  • The share of respondents who say mortgage rates will go up in the next 12 months fell by 3 percentage points to 45 percent.
    Those who say it is a good time to buy a house rose to 68 percent. Those who say it is a good time to sell fell by 5 percentage points to 39 percent.
  • The average 12-month rental price change expectation fell to 3.6 percent.
  • The percentage of respondents who expect home rental prices to go up in the next 12 months increased by 4 percentage points to 53 percent.
  • The share of respondents who think it would be difficult to get a home mortgage today decreased by 3 percentage points.
  • The share who say they would buy if they were going to move fell to 62 percent, while the share who would rent increased to 31 percent.

The Economy and Household Finances

  • The share of respondents who say the economy is on the right track fell 4 percentage points to 36 percent.
  • The percentage of respondents who expect their personal financial situation to get better over the next 12 months increased to 46 percent.
  • The share of respondents who say their household income is significantly higher than it was 12 months ago remained at 25 percent.
  • The share of respondents who say their household expenses are significantly higher than they were 12 months remained at 36 percent.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

For detailed findings from the November 2014 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The November 2014 Fannie Mae National Housing Survey was conducted between November 1, 2014 and November 17, 2014. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Please click here to view the release online.

Please click here to view the November 2014 National Housing Survey Data Release [pdf].

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.

Fannie Mae Lender Letter LL-2014-09: Updates to Foreclosure Bidding Instructions and Third Party Sales

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On December 23, Fannie Mae released Lender Letter LL-2014-09, subtitled Updates to Foreclosure Bidding Instructions and Third Party Sales.

Fannie Mae Lender Letter LL-2014-09 Updates to Foreclosure Bidding Instructions and Third Party Sales

To: All Fannie Mae Single-Family Servicers

Updates to Foreclosure Bidding Instructions and Third Party Sales

This Lender Letter provides advanced notification of upcoming changes to the following Fannie Mae policies and requirements:

  • Issuing bidding instructions
  • Issuing bidding instructions for all properties eligible for Fannie Mae’s MyCity Modification
  • Remitting third-party sales proceeds to Fannie Mae

Policy Change Effective Date

The servicer is encouraged to implement these requirements as early as February 1, 2015, but must implement these policy changes no later than March 1, 2015, for all mortgage loans with a foreclosure sale to occur on or after April 15, 2015.

Date of Servicing Guide Update

The policy changes in this Lender Letter will be reflected in the February 2015 update of the Servicing Guide.

Issuing Bidding Instructions
Servicing Guide E-3.3-04, Issuing Bidding Instructions

The servicer must issue bidding instructions to the law firm for all mortgage loans referred for foreclosure that result in scheduled foreclosure sales.

The servicer must obtain a reserve price from Fannie Mae in any of the following circumstances:

  • when preparing bids for uninsured conventional first lien mortgage loans,
  • when applicable laws do not require the use of an appraisal report to set the bid, or
  • if the mortgage insurer of a first lien mortgage loan elects not to issue bidding instructions and defers to Fannie Mae.

Please click here to view the letter in its entirety.

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.

Fannie Mae: Economic Growth Ends Year With a Slower Q4, but Poised to Strengthen in 2015

Posted on by Safeguard

On December 18, Fannie Mae issued a news release titled Economic Growth Ends Year With a Slower Q4, but Poised to Strengthen in 2015.

Economic Growth Ends Year With a Slower Q4, but Poised to Strengthen in 2015

Housing Continues Long-Term Climb Back to Normal

WASHINGTON, DC – After a roller-coaster year for the U.S. economy, in which economic growth pitched and rolled from quarter to quarter, 2014 is expected to end on an unspectacular note, as some unsustainable forces that drove activity in the third quarter reverse in the final quarter. Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group forecasts full-year growth of 2.1 percent for this year, a full percentage point below the 2013 pace. However, growth still is expected to strengthen heading into the new year, driven by firming consumer income prospects, rising consumer and business confidence, a broadening housing recovery, and reduced fiscal headwinds. Overall, the Group expects economic growth of 2.7 percent for all of 2015.

“The December forecast is relatively little changed from the November forecast. We expect a weaker fourth quarter to follow a stronger third quarter, but we don’t see it as a sign of overall weakness,” said Fannie Mae Chief Economist Doug Duncan. “Although real consumer spending growth has disappointed this year, it appears poised to accelerate in November due to a significant jump in auto sales and a likely pick-up in home heating costs. The decrease in oil prices certainly may support consumer spending over time, particularly now during the holiday shopping season, as well as hold down inflation as a potential benefit to consumption. Based on the stronger consumer story that we expect to see in 2015 relative to 2014, we upgraded our forecast from approximately 2.5 percent growth to 2.7 percent growth for the full year.”

“Similarly, the housing market is likely to continue its gradual climb upward next year after a sub-par 2014,” said Duncan. “We anticipate a fairly strong increase in housing starts in response to stronger employment and some improvement in related household incomes. As a result, that may help to unfold some of the suppressed household formation numbers and incent builders to meet some of that increased demand. For all of 2015, we expect total housing starts to increase by about 22 percent and total home sales to rise approximately 5 percent, with total mortgage originations ticking up slightly to $1.13 trillion.”

Visit the Economic & Strategic Research site at www.fanniemae.com to read the full December 2014 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.

Please click here to view the news release online.

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.

Fannie Mae Announces Eviction Moratorium for the Holidays

Posted on by Safeguard

On December 9, Fannie Mae published a news release announcing that it will suspend evictions of foreclosed single family properties from December 17, 2014 through January 2, 2015.

Fannie Mae Announces Eviction Moratorium for the Holidays

WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced today that it will suspend evictions of foreclosed single family properties during the holiday season.  From December 17, 2014 through January 2, 2015 families living in foreclosed properties will be allowed to remain in the home, although legal and administrative proceedings for evictions may continue during this period.

“As in previous years, we believe it is important to extend the timeline of help for struggling borrowers during the holidays,” said Joy Cianci, Senior Vice President of Credit Portfolio Management for Fannie Mae.  “If you are in trouble or facing foreclosure, reach out to Fannie Mae or your servicer today to get help.  There are more options than ever before to avoid foreclosure.  We want to help struggling borrowers whenever possible.”

Since 2009, Fannie Mae has completed more than 1.6 million loan workout solutions to help distressed families avoid foreclosure.  Anyone with a Fannie Mae-owned loan who is having trouble paying their mortgage can contact Fannie Mae at 1-800-7FANNIE for more information.  Homeowners can also visit www.knowyouroptions.com for additional resources on how to prevent foreclosure.

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.

VALERI Servicer Newsflash

Posted on by Safeguard

On October 27, the U.S. Department of Veterans Affairs (VA) released a VALERI Sevicer Newsflash.

VALERI Servicer Newsflash

IMPORTANT INFORMATION

Loan Modification Approvals with Trial Payment Periods – VA regulation 38 CFR 36.4315(a)(8) was revised, and became effective January 19, 2012, to allow servicers to determine the interest based on the date the modification is approved instead of the date the modification is actually executed.

Servicers who include a trial payment agreement with the loan modification may request pre-approval from VA to complete the modification with an interest rate based on the approval date of the trial agreement instead of at the time the permanent modification is approved. This pre-approval would avoid the possibility of a regulatory infraction being imposed against the servicer should a Suspicious Loan Modification process “kick off” due to the interest rate.

Please note that all pre-approval requests must be submitted before a servicer and borrower agree upon a loan modification or trial modification. Per page 163 of the VA Servicer Guide, VA does not grant pre-approvals for events a servicer has already reported. If the servicer deviates from a regulation without a pre-approval, it is considered a regulatory infraction on the loan.

REMINDER

VALERI Helpdesk Email Responses – The VALERI Helpdesk makes every effort to respond to emails on the date they are received. There may be instances where research, policy review, and/or additional discussions are required by VA Central Office (VACO). In the event VACO is unable to respond timely, an email will be sent notifying the sender of the reason(s) for the delay. With the exception of weekends or holidays, VACO will make every effort to respond within 24 hours of receipt of an email.

Partial Release of Security – Servicers have the authority to complete a partial release of security if the loan meets the criteria per VA regulation 36.4327, Release of Security. If the loan does not meet the requirements, servicers may submit a pre-approval request to VA through the VALERI application for consideration.

Compromise Sales – VA’s policy for compromise sales prevents excess funds from being issued to the borrower. If there are excess funds in an escrow balance after the closing on a compromise sale, the funds should be applied to the loan indebtedness.

Please click here to view the Newsflash 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.