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CFPB Issues Bulletin to Prevent Runarounds in Mortgage Servicing Transfers

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

On August 19, the Consumer Financial Protection Bureau (CFPB) issued Bulletin 2014-01 titled Compliance Bulletin and Policy Guidance: Mortgage Servicing Transfers.

CFPB Issues Bulletin to Prevent Runarounds in Mortgage Servicing Transfers

Bureau Highlights Risks in Transferring Loans Under Loss Mitigation Review
Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) is releasing a bulletin outlining expectations for mortgage servicers that transfer loans. The bulletin includes information on how mortgage servicers should pay special attention to new rules protecting consumers applying for loss mitigation help or trial modifications.

“At every step of the process to transfer the servicing of mortgage loans, the two companies involved must put in appropriate efforts to ensure no harm to consumers. This means ahead of the transfer, during the transfer, and after the transfer,” said CFPB Director Richard Cordray. “We will not tolerate consumers getting the runaround when mortgage servicers transfer loans.”

The bulletin is available at: http://files.consumerfinance.gov/f/201408_cfpb_bulletin_mortgage-servicing-transfer.pdf.

Mortgage servicers are responsible for collecting payments from mortgage borrowers on behalf of loan owners. They also typically handle customer service, escrow accounts, collections, loan modifications, and foreclosures. Generally, borrowers have no say in choosing their mortgage servicers. Servicing transfers among servicers are common and may occur in several ways. The mortgage owner may sell the rights to service the loan. In some case the owner of the loan may hire a sub-servicer rather than servicing the loan itself.

In January 2014, the CFPB’s new common-sense mortgage servicing rules took effect. The rules protect mortgage borrowers from runarounds by their servicers. Servicers are now required, for example, to maintain accurate records, promptly credit payments, and correct errors on request. Among other things, the new regulations also require servicers to maintain policies and procedures to facilitate the handover of information when a servicer transfers a loan to a new company.

Today’s bulletin gives examples of some things CFPB examiners will look for when loans are transferred. In particular, CFPB examiners will carefully scrutinize transfers of loans with pending loss mitigation applications or approved trial and permanent modification plans. Examples of good practices by servicers include flagging those loans and taking special care to ensure that all relevant documents are transferred in a timely manner.

If servicers are not fulfilling their obligations under the law, the CFPB will take appropriate actions to address these violations and seek all appropriate corrective measures, including remediation to harmed consumers.

Throughout 2013 and 2014, the CFPB has been working to ensure a smooth industry transition to compliance with the new mortgage servicing rules. The Bureau maintains a Regulatory Implementation website, which consolidates all of the new mortgage rules and related implementation materials and resources, at: http://www.consumerfinance.gov/regulatory-implementation.

More information about the CFPB’s mortgage rules is available at: http://files.consumerfinance.gov/f/201312_cfpb_mortgagerules.pdf.

To view the online press release, please click here.

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.

VA Renews Contract for Black Knights Mortgage Reporting Application

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

On July 15, the South Florida Business Journal published an article titled Department of Veterans Affairs Renews Contract for Black Knight’s Mortgage Reporting Application.

Department of Veterans Affairs Renews Contract for Black Knight’s Mortgage Reporting Application

– Black Knight (fka LPS) developed the Veterans Affairs’ Loan Electronic Reporting Interface (VALERI) application to help the VA deliver on their mission to help delinquent veteran borrowers retain their homes

– Application enables the VA to monitor current information on more than 2 million VA-backed loans, ensuring servicers and VA are working in concert to help veteran borrowers

– Has helped hundreds of thousands of veterans remain in their homes

JACKSONVILLE, Fla., July 15, 2014 /PRNewswire/ — Black Knight Financial Services announced that the Department of Veterans Affairs (VA) signed a contract renewal for the Web-based reporting application “Veterans Affairs’ Loan Electronic Reporting Interface” (VALERI), which the VA has used since 2007.

VALERI is built upon Black Knight’s Desktop Process Management technology, a highly efficient workflow, imaging and communication management system that provides real-time connectivity between lenders, service providers, vendors and portfolio investors.

VALERI enables mortgage servicers to report “significant events,” through either the servicing system or the servicer’s Web portal user-interface within VALERI, eliminating many processes that were previously done manually, as well as email and verbal reporting for both the servicer and VA. Significant events may include when a borrower becomes delinquent on a loan, when a loan modification is complete or when a repayment plan is approved.

Since implementing VALERI in 2007, Black Knight has made multiple enhancements to its servicing systems, including enhancements that support the Servicemembers Civil Relief Act (SCRA) and the Helping Heroes Keep Their Homes Act of 2010. VA technicians flag loans to help servicers further identify and process protected loans with greater ease and confidence. SCRA prohibits mortgage servicers from foreclosing or seizing property from active-duty military personnel unable to meet their mortgage obligations. The protection from foreclosure lasts up to nine months after active duty has ended, and service members also qualify for interest rate limits and other shields under the law.

“VALERI allows us to establish clear, standardized business rules, which ensure that every veteran borrower receives every possible opportunity to retain their home, or exit home ownership with dignity. Since implementing this technology, VALERI has enabled servicers and VA to help more than 380,000 veterans and service members avoid foreclosure, saving taxpayers more than $12 billion,” said Michael J. Frueh, Director of the U.S. Department of Veterans Affairs Home Loan program. “We appreciate Black Knight’s commitment to ensuring this technology meets our requirements and supports our mission to help veteran homeowners.”

“Historically, the black knight, for which our company is named, is known for helping people, and we are honored to have the opportunity to continue to work with the VA to help our veterans by delivering, supporting and enhancing this comprehensive technology,” said Joe Nackashi, chief information officer and president of the Servicing and Default Technologies division of Black Knight Financial Services.

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

Presidential Statements on Confirmations of Shaun Donovan and Julian Castro

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

On July 11, the U.S. Department of Housing and Urban Development (HUD) shared the official White House press releases of statements by President Obama regarding the confirmations of Shaun Donovan and Julian Castro.

Statement by the President on the Confirmation of Shaun Donovan as the Director of the Office of Management and Budget

I am pleased that Republicans and Democrats in the Senate today confirmed Shaun Donovan as the next Director of the Office of Management and Budget. From his outstanding work at HUD helping to rebuild our housing market to his leadership in the wake of Hurricane Sandy, Shaun has played a crucial role in our efforts to battle back from the worst economic crisis of our lifetimes and expand opportunity for more Americans. While we have made significant strides by investing in areas that are helping to grow the economy, creating good jobs, and promoting more effective and efficient management in government, Shaun knows there is more work to do, and today’s bipartisan vote ensures the dedicated professionals at OMB will have a proven, effective leader to build on the progress we’ve made.

Statement by the President on the Confirmation of Julián Castro as the Secretary of Housing and Urban Development

I applaud the bipartisan majority of Senators who today confirmed Julián Castro as our next Secretary of Housing and Urban Development. Julián is a proven leader, a champion for safe, affordable housing and strong, sustainable neighborhoods. I know that together with the dedicated professionals at HUD, Julián will help build on the progress we’ve made battling back from the Great Recession — rebuilding our housing market, reducing homelessness among veterans, and connecting neighborhoods with good schools and good jobs that help our citizens succeed. Julián has lived the American Dream in his own life, and I’m confident he will help Americans across our country seize their own piece of that dream for themselves and their children.

MHA HAMP Reporting Update: New Reporting Guidance

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

On June 30, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled New Reporting Guidance Posted: Offering and Reporting HAMP Tier 2 Modifications.

HAMP REPORTING UPDATE

New Reporting Guidance Posted: Offering and Reporting HAMP Tier 2 Modifications

Today, June 30, 2014, new reporting guidance regarding offering and reporting HAMP Tier 2 modifications has been posted on HMPadmin.com.

Servicers should refer to: Reporting Guidance: Offering and Reporting HAMP Tier 2 Modifications, which can be found within the Data Reporting tab, under the Reporting Requirements section on the secure side of HMPadmin.com (login required).

Questions?
Email the HAMP Solution center or call 1-866-939-4469; to reach Lender Processing Services, Inc. (LPS), select option 1, then option 5.

Please click here to view the online update.

MHA HAMP Reporting Update June 2014 UP Survey Available

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

On July 15, Making Home Affordable (MHA) released a HAMP Reporting Update, subtitled June 2014 UP Survey Now Available.

HAMP REPORTING UPDATE

June 2014 UP Survey Now Available

The June 2014 UP survey is now available on HMPadmin.com (login required). Servicers that have executed a Servicer Participation Agreement (SPA) and that have cumulative UP activity must complete and upload their UP survey response to the HAMP Reporting Tool (login required) by Tuesday, July 22, 2014.

SPA servicers that have any cumulative UP activity as of June 30, 2014 must submit an UP survey at this time.

For details on downloading and submitting the UP survey response, log in to HMPadmin.com, navigate to the HAMP Loan Reporting Tools & Documents area, and select the UP Survey tab.

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

For questions specifically regarding the survey contents, email the HAMP Servicer Survey team.

Please click here to view the online update.

MHA HAMP June 2014 UP Survey Reminder

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

On July 8, Making Home Affordable (MHA) released a HAMP Reporting Update titled June 2014 UP Survey Reminder.

HAMP REPORTING UPDATE

June 2014 UP Survey Reminder

The June 2014 Home Affordable Unemployment Program (UP) survey will be available on HMPadmin.com (login required) beginning Tuesday, July 15, 2014. Servicers that have executed a Servicer Participation Agreement (SPA) and have cumulative UP forbearance activity must complete and upload their UP survey response to the HAMP Reporting Tool by Tuesday, July 22, 2014.

SPA servicers that have any cumulative UP forbearance activity as of June 30, 2014 should submit an UP survey by July 22, 2014.

For details on downloading and submitting the UP survey response, log in to HMPadmin.com, navigate to the HAMP Loan Reporting Tools & Documents area, and select the UP Survey tab.

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

Please click here to view the online update.

Julian Castro Confirmed as HUD Secretary

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

On July 9, MortgageOrb.com published an article titled Julian Castro Confirmed As HUD Secretary.

Julian Castro Confirmed As HUD Secretary

It’s a done deal: Julian Castro, President Obama’s pick to lead the U.S. Department of Housing and Urban Development (HUD), sailed through his Senate confirmation Wednesday by a 71-27 vote.

The 39-year-old, third-term mayor of San Antonio will replace current HUD Secretary Shaun Donovan, who will next lead the White House Office of Management and Budget (OMB).

Donovan replaces OMB head Sylvia Mathews Burwell, who replaces Kathleen Sebelius as Health and Human Services secretary in a reshuffling of White House staff.

Castro’s twin brother, Joaquin Castro, serves in the U.S. House of Representatives as a Democrat from Texas.

Castro’s confirmation comes as the White House is struggling with housing finance reform and measures that will free up more credit for minority or “underserved” borrowers. It also comes as Democrats are working to maintain their advantage among Hispanic voters in the upcoming November elections.

Some political insiders say Castro is being groomed as a potential 2016 vice president pick and see his appointment as a way for him to get acclimated to Washington and raise his national profile.

Castro was first introduced to a national audience when he gave the keynote speech at the 2012 Democratic National Convention.

Eighteen Republicans supported Castro’s confirmation.

In a statement following the vote, David H. Stevens, president and CEO of the Mortgage Bankers Association, said, “With Castro becoming the next HUD secretary and Shaun Donovan soon to become the new director of OMB, the administration will be well positioned to address the important housing policy issues. We look forward to working with both men to help ease access to credit for qualified borrowers and accelerate the housing recovery.”

During a confirmation hearing held in June before the Senate Banking Committee, a calm and cool Castro said it’s possible to loosen credit requirements for lower-income borrowers and still keep the Federal Housing Administration (FHA) solvent. He said the FHA should continue to play a role in ensuring that creditworthy first-time home buyers “have the opportunity to reach the American Dream of homeownership.”

However, the FHA also needs to have “policies in place that ensure what happened a couple of years ago doesn’t happen again,” he added.

Last fall, the FHA required a $1.7 billion subsidy from the Treasury Department to cover losses of more than $50 billion resulting from loan defaults – including losses on its Home Equity Conversion Mortgage or reverse mortgage product. It was the first “bailout” for the agency in its 80-year history.

In March, White House budget officials, in presenting the president’s proposed budget plan, said the FHA had made great strides in shoring up its reserves, mainly by increasing the fees it charges, and thus would not likely need a second Treasury draw later this year.

The balancing act for the FHA has been keeping fees low enough so that lower-income borrowers have adequate access to mortgage credit while at the same time avoiding increased risk.

During his Senate committee hearing, Castro didn’t provide details on how he would free up more mortgage credit for the underserved.

Castro also commented on housing finance reform, saying he supports the idea, without endorsing any particular proposed bill. In particular, he said he supports the idea of developing a single common security for government-sponsored enterprises Fannie Mae and Freddie Mac.

Please click here to view the online article.

HUD ML 2014-15 Updated Requirements for PFS and DIL

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

On July 10, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2014-15, subtitled Updated Requirements for Pre-Foreclosure Sales (PFS) and Deeds in Lieu (DIL) of Foreclosure.

Mortgagee Letter 2014-15

To: All FHA-Approved Mortgagees Servicing Single Family Mortgages

Subject: Updated Requirements for Pre-Foreclosure Sales (PFS) and Deeds in
Lieu (DIL) of Foreclosure

Purpose: This Mortgagee Letter sets forth the Department’s policies on
Pre-Foreclosure Sales and Deed In Lieu transactions. This Mortgagee
Letter also describes:

Requirements for real estate agents and brokers participating in PFS
transactions;
An initial listing period requirement for PFS transactions;
Updated sample language for the PFS Addendum;
Documentation requirements for verifying assets, income, and expenses;
Use of the Deficit Income Test (DIT);
The elimination of the financial hardship/deficit income PFS requirement
for a servicemember who has received Permanent Change of Station (PCS)
Orders;
Validation requirements for appraisals;
The criteria under which the Department will permit non-arms-length PFS
transactions; and
The minimum marketing period for all PFS transactions.

Effective Date: Mortgagees must implement the requirements in this Mortgagee
Letter for all new Approvals to Participate (ATPs) no later than October 1, 2014.

Affected Policy: This Mortgagee Letter supersedes in its entirety Mortgagee
Letter 2013-23, Updated Pre-Foreclosure Sale (PFS) and Deed in Lieu (DIL)
of Foreclosure Requirements, published on July 9, 2013. The policies set
forth in this Mortgagee Letter also supersede, where in conflict, Mortgagee
Letters 2013-34, 2008-43, 2002-13, and 2000-05. All other requirements
of Mortgagee Letters 2008-43, 2002-13, and 2000-05 remain in effect.

Please click here to view the letter in its entirety.

HUD ML 2014-13 Voluntary Termination of FHA Mortgage Insurance

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

On July 3, the U.S. Department of Housing and Urban Development (HUD) released Mortgagee Letter 2014-13, subtitled Voluntary Termination of FHA Mortgage Insurance.

MORTGAGEE LETTER 2014-13

To: All Approved Mortgagees

Subject: Voluntary Termination of FHA Mortgage Insurance

Purpose: This Mortgagee Letter requires mortgagees, requesting voluntary
termination of FHA mortgage insurance, to obtain a signed Borrower’s
Consent to Voluntary Termination of FHA Mortgage Insurance from each
borrower on the mortgage.

Effective Date: Mortgagees are required to comply with the requirements of this
Mortgagee Letter no later than October 1, 2014.

Affected Policy: The policies set forth in this Mortgagee Letter modify or supersede,
where there is conflict, HUD Handbook 4330.1, Section 5-1.B.

Background: Pursuant to 24 CFR 203.295, at the request of the borrower and
mortgagee, FHA may terminate a mortgage insurance contract. Upon the
voluntary termination of FHA insurance, the borrower and mortgagee are only
entitled to those rights or benefits available if the insurance contract was
terminated as a result of the insured mortgage being paid in full. Also, upon the
termination of FHA insurance for any other reason, the mortgage is no longer
governed by the FHA insurance program’s rules and regulations, including
FHA’s Loss Mitigation requirements.

Mortgagees will now be required to document that they have obtained the
borrowers’ informed consent to terminate.

Please click here to view letter in its entirety.

HUD June Housing Scorecard

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

On July 11, the U.S. Department of Housing and Urban Development (HUD) released an update titled Obama Administration Releases June Housing Scorecard.

OBAMA ADMINISTRATION RELEASES JUNE HOUSING SCORECARD

WASHINGTON- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the June edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. The latest data show progress among key indicators, including growing equity and a rebound in the sale of new and existing homes. While this scorecard notes positive overall trends in the housing market, officials caution that more work needs to be done as the economy recovers from the Great Recession. The full Housing Scorecard is available online at www.hud.gov/scorecard.

“The June Housing Scorecard shows the housing market continues to make progress as we move into the summer months,” said HUD Assistant Secretary for Policy Development and Research Katherine O’Regan. “Sales of new and existing homes are up, equity continues to grow, and foreclosures starts continue trending down. While these are all signs of a healthy recovery, given the severity of the housing crisis, we must stay committed to helping homeowners.”

“Although the housing market continues to improve, Treasury remains committed to helping homeowners who are still struggling to make their mortgage payments,” said Treasury Acting Assistant Secretary Tim Bowler. “To date, more than 1.3 million homeowners have received a permanent modification through the Home Affordable Modification Program (HAMP), saving an estimated $28.2 billion in mortgage payments.”

The June Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

Purchases of new homes surged by 18.6 percent in May. New home sales rebounded to a seasonally adjusted annual rate (SAAR) of 504,000 in May, following sales of 425,000 in April, and were up 16.9 percent from one year ago. Purchases of new homes rose in May by the biggest monthly gain in 22 years (since January 1992) and to the highest level since May 2008, indicating that home sales are rebounding from a severe-weather induced lull during the previous two quarters. (Source: HUD and Census Bureau).
Sales of previously owned (existing) homes rose again in May after a lackluster performance in the previous two quarters. The National Association of Realtors® (NAR) reported that existing homes—including single-family homes, townhomes, condominiums, and cooperatives—sold at a pace of 4.89 million (SAAR) in May, up 4.9 percent from April but remain 5.0 percent below the 5.15 million pace a year-earlier.
Foreclosure starts continue their downward trend. Lenders started the public foreclosure process on 49,240 U.S. properties in May, down 10 percent from the previous month and down 32 percent from one year ago to the lowest level since December 2005—a 101-month low (although foreclosure starts were up from a year ago in 12 states). (Source: Realty Trac)
Foreclosure completions also fell in May. Lenders completed the foreclosure process (bank repossessions or REOs) on 28,373 U.S. properties in May, down 6 percent from the previous month and down 27 percent from one year ago to the lowest level since July 2007—an 82-month low (although bank repossessions were up from a year ago in 14 states). (Source: Realty Trac)
The Administration’s foreclosure mitigation programs continue to provide relief for millions of homeowners as the recovery from the housing crisis continues. In all, more than 8.5 million mortgage modification and other forms of mortgage assistance arrangements were completed between April 2009 and the end of May 2014. Nearly 2.1 million homeowner assistance actions have taken place through the Making Home Affordable Program, including nearly 1.4 million permanent modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered more than 2.3 million loss mitigation and early delinquency interventions through May.The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 4.1 million proprietary modifications through April (data are reported with a 2-month lag).

Please click here to view the online scorecard.