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VA Circular 26-14-5 Appraisal Requirements on Foreclosed Properties

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

On February 25, the Department of Veterans Affairs (VA) issued Circular 26-14-5 subtitled VA Appraisal Requirements on Foreclosed Properties.

Circular 26-14-5

VA Appraisal Requirements on Foreclosed Properties

1. Purpose. This Circular reaffirms Department of Veterans Affairs (VA) policy that all properties, including foreclosed properties, must meet VA minimum property requirements (MPRs) prior to VA loan guaranty. Additionally, this Circular clarifies our current VA requirements on who may pay for repairs on foreclosed properties.

2. Details. There has been an ongoing interest in the purchase of foreclosed properties by Veterans wishing to use their VA Home Loan Guaranty benefit. VA hereby reaffirms our policies regarding VA MPRs in connection with the purchase of foreclosed properties which are to receive VA loan guaranty. As outlined in Chapter 12 of the VA Lenders Handbook (VA Pamphlet 26-7), VA requires that all properties, including foreclosed properties, be in a condition that meets VA MPRs, or that the property must be repaired to meet the MPRs prior to loan guaranty. In those cases where repairs are required, the VA fee appraiser must list on the appraisal report any repairs necessary to meet MPRs, and provide an estimate of the fair market value for the property as if all of those repairs have been completed. The seller or the Veteran may negotiate who and/or how the required repairs included in the estimate of value, as noted in the VA Notice of Value will be paid. If necessary, escrow for the Veteran purchaser may be established to accommodate making the required repairs. The escrowing of funds is described in Chapter 9 of VA Lenders Handbook (VA Pamphlet 26-7). Additionally, to protect both the Veteran’s and VA’s interests, lenders which are selling their own “Real Estate Owned” properties may not process these cases under our Lender Appraisal Processing Program (LAPP); these cases must be ordered and processed as “IND” appraisals.

3. Rescission: This Circular is automatically rescinded on January 1, 2017.

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 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.

USDA Countdown 7 CFR 3555

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

On March 21, the U.S. Department of Agriculture (USDA) released a single family housing servicing update titled Countdown: 7 CFR 3555.

COUNTDOWN: 7 CFR 3555

USDA continues to focus on preparation and training for the launch of 7 CFR Part 3555
on September 1, 2014! Over the next five months, we will count down to the
implementation of the new regulation, scheduled to replace the present rule, 7 CFR
Part 1980 Subpart D. It is our highest priority to create the best and most exciting
training materials and resources for use by the Agency and our lending and real estate
partners. We are just days from releasing training dates and details.

Please click here to view the update in its entirety.

US Senate Banking Committee Releases Housing Finance Reform Text

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

On March 16, the United States Senate Committee on Banking, Housing, & Urban Affairs released the housing finance reform text.

JOHNSON, CRAPO RELEASE HOUSING FINANCE REFORM TEXT

Washington, DC – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) released the legislative text of the bipartisan housing finance reform agreement that they announced last Tuesday. That announcement sparked enthusiasm from the White House, Senators, Members of Congress and key stakeholders recognizing the agreement as a positive step forward in reforming our housing finance system. Chairman Johnson and Ranking Member Crapo plan to hold a committee markup in the coming weeks. They took rare action in releasing the text over the weekend in an effort to balance the Committee Members’ interests in having adequate time to review the legislation while advancing housing finance reform in a timely manner.

“Our housing finance system is badly in need of reform. And it is clear from the reaction to our announcement last week that many people agree,” said Chairman Johnson. “This proposal includes an explicit government guarantee in order to add stability to the economy, keep costs reasonable for borrowers and renters, and ensure fair access to the secondary market for all lenders. We also include important provisions that will preserve the 30-year mortgage as well as fair and affordable housing options for buyers and renters alike. I appreciate the enthusiasm from Committee Members, the Administration and key stakeholders and look forward to working with them to advance this effort.”

“Chairman Johnson and I have produced a comprehensive, bipartisan plan that winds down these too-big-to-fail entities, protects taxpayers by putting strong capital in a first-loss position, and provides broad access to mortgages for eligible borrowers,” said Ranking Member Crapo. “There is broad support to fix our flawed housing system, and today’s actions are a strong step toward ending the status quo.”

The housing market accounts for nearly twenty percent of the American economy, so it is critical that we have a strong and stable system that is built to last. The status quo in which Fannie Mae and Freddie Mac remain in conservatorship is not a viable option for our nation’s housing finance system. In an effort to address these concerns and find bipartisan consensus, the Senate Banking Committee hosted an in-depth series of hearings and briefings in the fall of 2013 that explored essential elements necessary for reform. Building on Senator Corker and Warner’s bill S.1217 and what was learned throughout the Committee process, Chairman Johnson and Ranking Member Crapo drafted a proposal that is designed to protect taxpayers from bearing the cost of a housing downturn; promote stable, liquid, and efficient mortgage markets for single-family and multifamily housing; ensure that affordable, 30-year, fixed-rate, prepayable mortgages continue to be available, and that affordability remains an important consideration; provide equal access for lenders of all sizes to the secondary market; facilitate broad availability of mortgage credit for eligible borrowers in all areas and for single family and multifamily housing types.

The legislative text can be found here, the section-by-section of the legislation can be found here, and a detailed summary can be found here.

Please click here to view the online release.

US Senate Banking Committee Announces Agreement on Housing Finance Reform

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

On March 11, the United States Senate Committee on Banking, Housing, & Urban Affairs released an update titled Johnson, Crapo Announce Agreement on Housing Finance Reform.

JOHNSON, CRAPO ANNOUNCE AGREEMENT ON HOUSING FINANCE REFORM

Washington, DC – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) announced that they have reached an agreement on a housing finance reform proposal. Last fall, the Senate Banking Committee hosted an in-depth series of hearings exploring essential elements necessary for reform and over the past few months they have been negotiating and drafting the reform proposal. The bipartisan agreement includes measures from Committee Members on both sides of the aisle, the Administration and stakeholders. Chairman Johnson and Ranking Member Crapo are putting finishing touches on draft legislative text that they plan to release publicly in the coming days, and they plan to hold a markup in the coming weeks.

“There is near unanimous agreement that our current housing finance system is not sustainable in the long-term and reform is necessary to help strengthen and stabilize the economy. This bipartisan effort will provide the market the certainty it needs, while preserving fair and affordable housing throughout the country,” said Chairman Johnson. “Ranking Member Crapo has been a great partner to work with from the start, and I appreciate all of the important contributions Members of the Committee made to this effort. Specifically, I want the thank Senators Warner and Corker for providing us a strong framework to build on. I look forward to moving this effort through committee once Members have had a chance to review our forthcoming legislation.”

“This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie while protecting taxpayers with strong private capital, building the components for a stable secondary market and avoiding repeating the mistakes of the past,” Crapo said. “Government control of Fannie and Freddie with no private capital to protect taxpayers against losses is unacceptable. Chairman Johnson and a bipartisan coalition of Senators deserve a tremendous amount of credit for making the hard decisions that will move us toward a stronger housing system that provides a balance between providing broad access to mortgages while protecting taxpayers from losses.”

Chairman Johnson and Ranking Member Crapo agree that the status quo in which Fannie Mae and Freddie Mac remain in conservatorship is not a viable option for our nation’s housing finance system. To move forward, the following principles need to be reflected in any housing finance reform legislation:

Protect taxpayers from bearing the cost of a housing downturn.
Promote stable, liquid, and efficient mortgage markets for single-family and multifamily housing.
Ensure that affordable, 30-year, fixed-rate, prepayable mortgages continue to be available, and that affordability remains an important consideration.
Provide equal access for lenders of all sizes to the secondary market.
Facilitate broad availability of mortgage credit for all eligible borrowers in all areas and for single family and multifamily housing types.

Details of the Agreement on Housing Finance Reform

Outlined below are some of the details of the agreement that Chairman Johnson and Ranking Member Crapo have reached that will form the basis of a bipartisan housing finance reform text:

Start with S.1217 as the base text and generally maintain its overall architecture.
Wind down and eliminate Fannie Mae and Freddie Mac.
Promote a smooth and stable transition from the old system to the new system by providing specific benchmarks and timelines to guide Federal Mortgage Insurance Corporation (FMIC) and market participants.
Transfer appropriate functions to the modernized, streamlined and accountable FMIC, modeled in part after the FDIC including its regulatory authority.
Mandate 10 percent private capital, up front, and create a mortgage insurance fund for the system to protect taxpayers against future bailouts.
Create a member-owned securitization platform that will issue a single, standardized FMIC-wrapped security, and permit private label securities to be issued in a manner that encourages standardization and improved market liquidity.
Establish a mutual cooperative jointly owned by small lenders to ensure institutions of all sizes have direct access to the secondary market so community banks and credit unions are not at the mercy of their larger competitors when Fannie Mae and Freddie Mac are dissolved. The small lender mutual cooperative would provide a cash window for individual eligible loans, and small lenders could retain servicing rights.
Provide clear rules of the road for servicers that choose to participate in the FMIC system.
Maintain a vibrant multifamily market by building upon successful risk-sharing mechanisms and products and providing access to a broad range of markets.
Require strong underwriting standards that mirror the definition of “qualified mortgage”, and set down payment requirement at 5 percent (with a short phase-in) except for first-time homebuyers at 3.5 percent.
Facilitate the broad availability of credit for eligible single-family and multifamily borrowers, monitor consumer and market access to credit, and provide market based incentives and transparency to serve underserved areas.
Eliminate affordable housing goals and establish transparent and accountable housing-related funds that would focus on ensuring there is sufficient decent housing available. The funds are NOT paid for with tax dollars, but through a small FMIC user fee (10 basis points) that only those who choose to use the system pay.
Allow current conforming loan limits to be maintained so that mortgage credit continues to be available in high cost areas.
Maintain broad liquidity in the To-Be-Announced (TBA) market and direct FMIC to take into account the impact of new products on the TBA market.

Please click here to view the online release.

MHA SD 14-01 Servicer Handbook Version 4.4; Administrative Clarifications

Posted on September 13, 2018 by Safeguard

On March 3, Making Home Affordable (MHA) released Supplemental Directive 14-01: Making Home Affordable^® Program – Handbook for Servicers Version 4.4 and Administrative Clarifications.

Supplemental Directive 14-01: Making Home Affordable^® Program – Handbook for Servicers Version 4.4 and Administrative Clarifications

As of today, March 3, 2014, servicers can download Version 4.4 of the Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages (Handbook) from HMPadmin.com. The Handbook is a consolidated reference outlining the requirements and guidelines of the Making Home Affordable Program for mortgage loans that are not guaranteed by Fannie Mae or Freddie Mac.

Unlike Supplemental Directives (SDs), which outline specific policy topics only, the Handbook is organized so servicers can easily find program information in one convenient guide.

Version 4.4 of the Handbook incorporates and supersedes in their entirety Supplemental Directives 13-07, 13-08, 13-09, 13-10, 13-11, and 13-12.

In addition, Version 4.4 of the Handbook incorporates administrative clarifications into several sections of Version 4.3 of the Handbook. These clarifications are effective immediately and include the following topics:

Making Home Affordable Outreach and Borrower Intake Project
Suspension of a Referral to Foreclosure
Post-Modification Counseling Solicitation Requirement for Borrowers in or Discharged from Bankruptcy
Handbook Mapping Clean-Up and Clarifications

See SD 14-01: Making Home Affordable Program – Handbook for Servicers Version 4.4 and Administrative Clarifications for more information regarding these updates.

Please click here to view the online update.

MHA Posts New Beta Schema and Column Header Files

Posted on September 13, 2018 by Safeguard

On March 5, Making Home Affordable released an update titled New Beta Schema and Column Header Files Now Posted.

New Beta Schema and Column Header Files Now Posted

The following beta versions of the April 28, 2014 Release schemas and column header files were posted on HMPadmin.com (login required):

HAMP Trial and Official Loan Setup File Format – 04/28/2014 Release

2MP Monthly Activity Report (2OMR) File Format – 04/28/2014 Release

2MP Master Servicer Reconciliation Column Header file – 04/28/2014 Release

The final versions of these files will be posted in April 2014.

Please click here to view the online update.

MHA HAMP Update Q1 2014 Base NPV Documentation Supplement

Posted on September 13, 2018 by Safeguard

On March 4, Making Home Affordable (MHA) released a HAMP Reporting Update titled Q1 2014 Base NPV Documentation Supplement Available.

Q1 2014 Base NPV Documentation Supplement Available

The Q1 2014 Base NPV Model Documentation Supplement is now available for the Home Affordable Modification Program^® (HAMP) for use beginning April 1, 2014. The supplement provides the following:

REO Sale Value Parameters
Historical and Projected Home Price Index
Foreclosure and REO Disposition Timelines and Costs
Home Price Decline Protection Incentive Matrix
Default Model Parameters
Pre-payment Model Parameters
HAMP Tier 2 Assumptions and Parameters

Servicers can access the Q1 2014 Base NPV Model Documentation Supplement in the Base NPV Model Tools & Documents section of HMPadmin.com (login required).

Important Actions for Certain Servicers: HAMP-registered servicers using an NPV model that has been implemented or customized for their own systems must implement the new Q1 2014 data tables for use beginning April 1, 2014.

To fulfill model versioning requirements, servicers should continue to use the Q4 2013 data tables for January 1 through arch 31, 2014, and other appropriate supplement data tables for earlier quarters.

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

Please click here to view the online update.

MHA HAMP Reporting System Servicer Release Notes

Posted on September 13, 2018 by Safeguard

On March 24, Making Home Affordable (MHA) released a HAMP Reporting Update titled HAMP^® Reporting System Servicer Release Notes.

HAMP REPORTING UPDATE
HAMP^® Reporting System Servicer Release Notes

On Monday, April 28, 2014, the HAMP Reporting System, including the HAMP Reporting Tool, will receive an update to support the following:

Servicer Incentive Changes for Non-GSE Modifications

Servicer Incentive Changes for GSE Modifications
Reporting Requirements Beyond Five-Year Incentive Period

Additional End of Compensation Life (EoCL) Anniversary Scenarios
HAMP Reporting Tool updates

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

Updated Data Dictionaries

In connection with the April 28, 2014 release, updated versions of the following Data Dictionaries are posted on HMPadmin.com:

Servicers are encouraged to review the change logs for specific update information. View these data dictionaries under each corresponding program page on HMPadmin.com.

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.

Maxine Waters Releases GSE Reform Bill to Unwind Fannie, Freddie

Posted on September 13, 2018 by Safeguard

On March 27, National Mortgage News published an article titled Waters Releases GSE Reform Bill to Unwind Fannie, Freddie.

Waters Releases GSE Reform Bill to Unwind Fannie, Freddie

Rep. Maxine Waters, D-Calif., unveiled a new plan Thursday to overhaul the housing finance market, entering what’s becoming a crowded field of proposals to restructure the mortgage system.

The discussion draft, titled the Housing Opportunities Move the Economy Forward Act, would unwind Fannie Mae and Freddie Mac, like many of the competing plans in both the House and Senate. Unlike the other bills, the Waters proposal would replace the government-sponsored enterprises with a new lender cooperative that would issue government-backed securities. It would also establish a new regulator, the National Mortgage Finance Administration, to oversee the cooperative and the Federal Home Loan Banks.

“Fannie Mae and Freddie Mac’s return to profitability and repayment of taxpayer dollars has led some to rightly speculate whether the enterprises need any reform at all,” said Waters, the ranking member on the House Financial Services Committee, in a press release.

“I believe that we have an opportunity to address some of the fundamental flaws of the current system, by ending the perverse incentives created by Fannie Mae and Freddie Mac’s ownership structure and providing an explicit government guarantee that is paid for by industry.”

The Waters plan follows on the heels of two bills that have been discussed at length by the Senate Banking Committee, first by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., and then by Chairman Tim Johnson, D-S.D., and Mike Crapo, R-Idaho, the panel’s ranking member, which builds on the Corker-Warner bill.

The Johnson-Crapo bill, which is expected to soon come up for a committee vote, also gets rid of the GSEs, though it establishes a new regulator, the Federal Mortgage Insurance Corp., that would issue government-backed securities.

Under the Waters plan, a lender-owned cooperative would issue mortgage securities backed by the government. It would be governed on a one-member, one-vote basis to benefit smaller institutions and would “align risk and incentives across private members,” according to a summary of the bill.

“The new issuer will no longer operate as a hedge fund with a leveraged portfolio, but instead with very limited authority to provide a ‘cash window’ to small financial institutions, aggregate loans from the smallest lenders into multilender securities, and work out troubled loans,” the summary adds.

Like the Johnson-Crapo bill, the Waters plan would eliminate the GSEs’ affordable housing goals and capitalize several housing trust funds with a user fee of 10 basis points. On top of the trust funds, the Waters legislation includes a broad mandate to serve rural and other underserved communities.

Still, while the legislation may appear most similar in construct to the pending Johnson-Crapo bill, it has some competition in the House as well.

House Financial Services Chairman Rep. Jeb Hensarling, R-Texas, unveiled a bill last summer that would unwind the GSEs but would not establish a government guarantee for the new housing finance market. The legislation narrowly passed out of the banking panel with a vote largely down party lines. It has not yet been brought to a floor vote, which some suggest is due to a division in the Republican caucus over the approach.

Meanwhile, several junior Democrats on the House banking panel are also said to be working on a plan based on a mortgage reinsurance system organized around Ginnie Mae.

Please click here to view the online article.

H.R. 4262 Would Force Full Transparency at CFPB

Posted on September 13, 2018 by Safeguard

On March 19, HousingWire published an article titled Bill Would Force Full Transparency at CFPB.

H.R. 4262 was introduced on March 14, and referred to the Committee on Financial Services and the Committee on Oversight and Government Reform. Following is the aforementioned article.

Bill would force full transparency at CFPB

Congressman: Why does CFPB think it’s like the CIA

A leading Republican on the House Financial Services Committee introduced a bill to open the Consumer Financial Protection Bureau up to face the same scrutiny as every single other commission, regulatory body and government body with the exception of the CIA and the Federal Open Market Committee.

The bill, introduced by U.S. Rep. Sean Duffy, R-Wis., would apply the Federal Advisory Committee Act to the CFPB and its advisory councils.

“What is the CFPB doing that is on par with the CIA? It makes everyone want to ask, ‘what exactly goes on in these meetings?’” Duffy said.

The move comes two days after U.S. Rep. Jeb Hensarling, R-Texas, called out the CFPB for its policy of secrecy and closed door advisory council meetings – all part of “Sunshine Week,” a national effort to promote what is dwindling government transparency.

The CFPB has argued that it is not subject to the FACA, a 1972 law that is supposed to ensure that Congress and the public know what’s being discussed in government consumer advisory meetings, who is attending them, and how much they are costing taxpayers.

CFPB Director Richard Cordray has said the meetings are closed to the public because the Federal Advisory Committee Act, a sunshine law passed in 1972, does not apply to the Bureau.

“Why deny the public the right to observe these meetings?” U.S. Rep. Robert Pittenger, R-N.C. asked Director Cordray at a January hearing.

The CFPB does not receive taxpayer money, but it is a government regulatory body with the power to fine and regulate, and to have those executed with force of federal law.

Duffy says he requested to attend the February 26th and 27th meeting of the CFPB’s Consumer Advisory Committee, which under FACA should be completely open to the public. His said his staff was told via email, “We cannot accommodate the Congressman’s request.”

“If the CFPB is not going to take steps to maintain the transparency it claims it is committed to, we will take the legislative steps for them. My bill, H.R. 4262, mandates that FACA must apply to all of the CFPB’s advisory committees. The people have a right to know what their government is up to, and the government has a responsibility to provide that transparency,” he said.

Hensarling and Duffy’s concerns reflect a September 2013 recommendation in a report from the Bipartisan Policy Center, which can be viewed here.

Calls and emails to the CFPB for a response to Hensarling’s statement’s Monday and Duffy’s on Wednesday were not returned as of publication.

Please click here to view the online article.