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OCC Encourages Banks to Work With Customers Affected by Natural Disasters

Posted on September 13, 2018 by Safeguard

On November 18, the Office of the Comptroller of the Currency (OCC) released a notice titled OCC Encourages National Banks and Federal Savings Associations to Work With People Affected by Recent Extreme Weather.

Please note this is not new guidance.

OCC Encourages National Banks and Federal Savings Associations to Work With People Affected by Recent Extreme Weather

WASHINGTON — The Office of the Comptroller of the Currency today encouraged national banks and federal savings associations to work with customers affected by the recent tornadoes in the Midwest United States.

The OCC has published guidance encouraging national banks and federal savings associations to work with their customers affected by natural disasters. The OCC recognizes that the effects of natural disasters on individuals and businesses are often temporary, and that prudent efforts to adjust or alter terms on existing loans in areas affected by the disasters and related problems should not be subject to bank examiner criticism.

In 2012, the OCC published guidance for national banks and federal savings associations to consider the following actions when responding to natural disasters:

Waiving or reducing ATM fees;
Temporarily waiving late fees or penalties for early withdrawal of savings for affected customers;
Working with affected borrowers by restructuring borrowers’ debt obligations, altering or adjusting payment terms, or expediting lending decisions when possible and consistent with safety and soundness principles;
Reassessing current credit needs of the community and helping meet those needs by originating or participating in sound loans to rebuild damaged property; and
Contacting state and federal agencies, as well as other financial institutions, to help mitigate the effects of the event.

The OCC notes that these measures may help borrowers recover their financial strength and improve their capability to repay their debts. These recovery efforts can contribute to the health of the local community and the long-term interests of the national bank and its customers.

National banks in need of assistance in dealing with customers affected by the tornado should contact the OCC.

Related Link
OCC 2012-28, Supervisory Guidance on Natural Disasters and Other Emergency Conditions

Please click here to view the online notice.

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.

OCC Bulletin 2013-29: Guidance on Third-Party Relationships

Posted on September 13, 2018 by Safeguard

On October 30, the Office of the Comptroller of the Currency (OCC) released a statement titled Office of the Comptroller of the Currency Releases Guidance on Third-Party Relationships.

Office of the Comptroller of the Currency Releases Guidance on Third-Party Relationships

WASHINGTON — The Office of the Comptroller of the Currency today issued updated risk management guidance for national banks and federal savings associations related to third-party relationships.

“We have concerns regarding the quality of risk management on the growing volume, diversity, and complexity of banks’ third-party relationships, both foreign and domestic,” said Comptroller of the Currency Thomas J. Curry. “This guidance provides more comprehensive instruction for banks to ensure these relationships and activities are conducted in a safe and sound manner.”

Third-party relationships include business arrangements between the bank and another entity, by contract or otherwise. The use of third parties does not diminish the responsibility of the board and management to ensure the activity conforms to safe and sound banking practices and complies with applicable laws.

The guidance notes that banks face new or increased operational, compliance, reputation, strategic, and credit risks when engaging in third-party relationships. The OCC advises banks to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships, and expects more comprehensive oversight and management of third-party relationships that involve critical bank activities. To manage risks from third-party relationships, banks should:

Develop a plan that outlines the bank’s strategy, identifies the inherent risks of the activity, and details how the bank will select, assess, and oversee the third party;
Perform proper due diligence to identify risks and select a third-party provider;
Negotiate written contracts that clearly outline the rights and responsibilities of all parties;
Conduct ongoing monitoring of the third party’s activities and performance;
Execute a plan to terminate the relationship in a manner that allows the bank to transition the activities to another third party, bring the activities in-house, or discontinue the activities;
Assign clear roles and responsibilities for overseeing and managing third-party relationships and the risk management process;
Maintain proper documentation and reporting to facilitate oversight, accountability, monitoring, and risk management; and
Conduct independent reviews of the risk management process to enable management to assess that the bank’s process aligns with its strategy and effectively manages risks from third-party relationships.

The guidance rescinds OCC Bulletin 2001-47, “Third-Party Relationships: Risk Management Principles,” and OCC Advisory Letter 2000-9, “Third-Party Risk.” This guidance supplements and should be used in conjunction with other previously issued guidance on third-party relationships as listed in appendix B.

Please click here to view the online statement.

MHA SD 13-11: Handbook Mapping for CFPB Mortgage Servicing Regulations

Posted on September 13, 2018 by Safeguard

On November 15, the Making Home Affordable Program (MHA) released Supplemental Directive 13-11: MHA Handbook Mapping for CFPB Mortgage Servicing Regulations Guidance.

Supplemental Directive 13-11: MHA Handbook Mapping for CFPB Mortgage Servicing Regulations Guidance

Today, November 15, 2013, Supplemental Directive (SD) 13-11 was issued, providing the MHA Handbook mapping related to the CFPB mortgage servicing regulations guidance as outlined in SD 13-09. The changes to the Handbook are effective as of January 10, 2014.

This guidance applies to servicers that are subject to the terms of a Servicer Participation Agreement and related documents. This guidance does not apply to mortgage loans that are owned or guaranteed by Fannie Mae or Freddie Mac, insured or guaranteed by the Veterans Administration, the Department of Agriculture’s Rural Housing Service or the Federal Housing Administration.

Read SD 13-11 in its entirety for more information.

MHA Announces HAMP System Outage and Updated Materials Posted

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

On November 19, Making Home Affordable (MHA) announced HAMP Reporting System Outage and Updated Duplicate Borrower Verification Materials Posted.

HAMP Reporting System Outage

Due to the November 25 Release of the HAMP Reporting System, a planned system outage is scheduled from 6:00 p.m. ET on Thursday, November 21 through 8:00 a.m. ET on Monday, November 25. During this timeframe, HAMP Reporting System response files will not be available. Servicers will be able to submit and upload HAMP loan data files via the HAMP Reporting Tool and receive response files, exceptfrom 6:00 a.m. ET to 12:00 p.m. ET on Sunday, November 24.

The NPV Transaction Portal will be available for normal processing during this period.

New functionality will be implemented in the HAMP Reporting Tool that supports:

Supplemental Directive 13-03 (SD 13-03): Making Home Affordable Program – Handbook for Servicers as it pertains to post modification debt-to-income eligibility for Treasury FHA-HAMP
Supplemental Directive 13-04 (SD 13-04): Making Home Affordable Program – MHA Program Extension and Enhancements
Updated edits to align with existing policy
Hardest Hit Fund (HHF) reporting for GSE HAMP modifications
GSE HAMP NPV Threshold changes
Enhanced HAMP Reporting Tool Ad-hoc report capability

Servicers are encouraged to refer to the Servicer Release Notes on HMPadmin.com for specific information regarding the updates included in the November 25 Release.

Updated Duplicate Borrower Verification Materials Posted

Updated versions of the Duplicate Borrower Verification Job Aid and the Duplicate Borrower Verification Form (login required) are now posted. Servicers may view these documents in the secure portion of HMPadmin.com under the Data Reporting Resources tab of the HAMP Loan Reporting Tools & Documents section.

Please click here to view the online announcement.

HUD October Housing Scorecard

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

On November 8, the U.S. Department of Housing and Urban Development (HUD) released an update titled Obama Administration Releases October Housing Scorecard.

OBAMA ADMINISTRATION RELEASES OCTOBER HOUSING SCORECARD
Providence, Rhode Island housing market continues to show signs of significant improvement

WASHINGTON– The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the October edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. The latest data show important progress across many key indicators—as home prices, purchases of new homes, and sales of existing homes continue to show strong annual gains—although officials caution that the overall recovery remains fragile.The full Housing Scorecard is available online at www.hud.gov/scorecard.

“As indicated in the October housing scorecard, the Administration continues to work to stabilize the housing market and help responsible homeowners get back on their feet,” said HUD Deputy Assistant Secretary for Economic Affairs Kurt Usowski. “With homeowners’ equity at its highest level since 2007 and home prices increasing steadily, it is clear that we are moving in the right direction. As our housing market regains stability, it seems the time is ripe for private capital to begin taking a larger role in the housing finance system.”

“The Administration’s Making Home Affordable program continues to provide assistance to struggling homeowners, with more than 1.2 million homeowners receiving permanent modifications through HAMP,” said Tim Massad, Treasury Assistant Secretary for Financial Stability. “In addition, the standards set through the program have helped change the industry and helped millions more avoid foreclosure.” The October Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

The Administration’s foreclosure mitigation programs continue to provide relief for millions of homeowners as the recovery from the housing crisis continues. Over 1.8 million homeowner assistance actions have taken place through the Making Home Affordable Program, including more than 1.2 million permanent modifications through the Home Affordable Modification Program (HAMP). The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 3.8 million proprietary modifications through August.
Homeowners in HAMP continue to benefit from meaningful payment relief, increasing their long-term likelihood of avoiding foreclosure. As of September, more than 1.2 million homeowners have received a permanent modification through HAMP, saving approximately $547 on their mortgage payments each month- an almost 40 percent savings from their previous payment. This represents a total estimated savings of $22.9 billion in monthly mortgage payments, since the inception of the program. In September, 72 percent of eligible non-GSE mortgages benefited from principal reduction with their HAMP modification. Homeowners currently in HAMP permanent modifications with some form of principal reduction have been granted an estimated $12.1 billion in principal reduction. View the Making Home Affordable Program Report with data through September 2013.

Also featured this month in the Administration’s Housing Scorecard is a regional spotlight on market strength in the Providence, Rhode Island area. Like many areas across the country, the economic and housing market conditions in the Providence area are improving, but the foreclosure crisis has taken its toll. The Administration’s broad approach to stabilize the housing market has been a real help to homeowners in Providence and the surrounding cities.

“As the housing market continues to strengthen nationwide, Providence is also showing signs of significant improvement,” said Usowski. “As this Regional Spotlight reports, from the launch of the Administration’s assistance programs in April 2009 through the end of August 2013, nearly 26,800 homeowners received mortgage assistance in the Providence metropolitan area. This is a step in the right direction but we still have much to do to repair the damage caused by unsustainable lending in Providence prior to the crisis, and to help the continuing recovery.”

The Housing Scorecard Regional Spotlight features data on the health of the Providence housing market and impact of efforts to help homeowners at the local level including:

Economic and housing market conditions in the Providence MSA are improving. The share of mortgages that remain underwater has dropped to 17.3 percent as of the second quarter of 2013, down from 21.5 percent a year earlier. Jobs in the MSA have been increasing at an average annual rate of 4,025, or 0.7 percent, from the first quarter of 2010 through the second quarter of 2013. The Administration’s broad approach to stabilize the housing market has contributed to the improvements as more than 15,600 homeowners received mortgage assistance in the Providence area between April 2009 and August 2013 through the HAMP and FHA loss mitigation programs. An additional 11,200 proprietary mortgage modifications were made during this time through HOPE Now Alliance servicers. Furthermore, the City of Providence and the State of Rhode Island have benefitted from $25 million in funding from the Neighborhood Stabilization Program, and $79 million from the Hardest Hit Fund program.
The National Mortgage Settlement is continuing to provide relief for those in Providence and throughout the state of Rhode Island. Under the landmark National Mortgage Servicing Settlement, more than 2,000 Rhode Island homeowners had benefitted from over $150 million in consumer relief as of June 30, 2013. 1,182 of those borrowers, 56% of those helped, received an average of $72,586 in principal reduction on their first and second lien mortgages to help them stay in their homes. In addition, 317 borrowers who were current on their mortgage but too far underwater for a traditional refinancing were able to refinance and save an average of $41,779 over the life of their loans. Nationwide, the settlement has provided more than $51 billion in consumer relief benefits to more than 640,000 families, including over $25 billion in first and second lien principal reduction for 319,559 borrowers. That is in addition to the $2.5 billion in payments to participating states and $1.5 billion in direct payments to borrowers who were foreclosed upon between 2008 and 2011.

*Due to the government shutdown, the Obama Administration did not publish the September housing scorecard.

Please click here to view the update online.

HUD ML 2013-40 Loss Mitigation During Foreclosure Process

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

On November 1, the U.S. Department of Housing and Urban Development (HUD) released Mortgagee Letter 2013-40, subtitled Loss Mitigation During the Foreclosure Process.

Mortgagee Letter 2013-40

To: All Approved Mortgagees, Single Family Servicing Managers

Subject: Loss Mitigation during the Foreclosure Process

Purpose: The purpose of this Mortgagee Letter is to clarify the Department’s
requirements delineated in 24 CFR 203.502 and to communicate expectations
for servicers who are engaging in loss mitigation during the foreclosure
process.

Effective loss mitigation is essential to stabilizing communities affected by
natural disasters, poor housing market conditions, etc. Therefore, servicers
are reminded that participation in FHA’s Loss Mitigation Program is not
optional, they are to inform borrowers of and evaluate them for each loss
mitigation retention and non-retention option1 in a timely manner.

Effective Date: Mortgagees must implement the requirements in this Mortgagee Letter
by January 1, 2014.

Affected Policy: The policies set forth in this Mortgagee Letter modify or supersede,
where there is conflict, HUD Handbook 4330.1, Rev-5, and clarify parts of
Mortgagee Letter 2000-05.

Please click here to view the letter in its entirety.

HUD ML 2013-39 Methods of Communication With Borrowers

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

On October 28, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2013-39, subtitled Methods of Communication With Borrowers.

To: All Approved Mortgagees, Single Family Servicing Managers

Subject: Methods of Communication with Borrowers

Purpose: The purpose of this Mortgagee Letter is to provide updates to HUD’s policies on communicating with borrowers whose loans are delinquent or in default. These updates promote prompt and effective contact with FHA borrowers and will help to ensure that these borrowers are able to communicate with their servicers regarding their delinquencies and any available loss mitigation assistance. Specifically, this Mortgagee Letter addresses:

Timelines and methods for communicating with borrowers;
Policies for engaging borrowers early in their delinquency;
Specialized collection techniques for early payment defaults and redefault; and
FHA’s expectation for servicers to have written escalation processes and
procedures.

Effective Date: These updates are effective for all mortgages in default as of January 1, 2014.

Affected Policy: The policies set forth in this Mortgagee Letter modify or supersede,
where there is conflict, the following sections of HUD Handbook 4330.1, Rev-5,
Administration of Insured Home Mortgages.

Please click here to view the letter in its entirety.

HUD ML 2013-38 Single Family Foreclosure Policy

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

On October 28, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2013-38, subtitled Single Family Foreclosure Policy and Procedural Changes for HUD Title II Forward Mortgages and HECM Reverse Mortgages; Reasonable Diligence Requirements; HUD’s Schedule of Allowable Attorney Fees.

To: All Approved Mortgagees

Subject: Single Family Foreclosure Policy and Procedural Changes for HUD
Title II Forward Mortgages and HECM Reverse Mortgages; Reasonable
Diligence Requirements; HUD’s Schedule of Allowable Attorney Fees

Purpose: The purpose of this Mortgagee Letter is to update:

HUD’s reasonable diligence timeframes; and
HUD’s schedule of attorney fees for all jurisdictions.

Effective Date: The updated reasonable diligence timeframes will be effective for all cases in which the first legal action to initiate foreclosure occurs on or after November 1, 2013.

The updated Schedule of Attorney Fees will be effective for all cases in which any of the following actions occurs on or after November 1, 2013:

a first legal action for foreclosure is initiated;
a bankruptcy clearance is undertaken;
a possessory action is begun; or
a deed in lieu of foreclosure is recorded.

Affected Policy: The policies set forth in this Mortgagee Letter supersede all prior schedules, including those outlined in Mortgagee Letter 2005-30.

Please click here to view the letter in its entirety.

HUD Directive Rescinding MCB Demand Letters

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

On November 13, the U.S. Department of Housing and Urban Development (HUD) issued a directive on Demand Letters sent by Michaelson, Connor and Boul (MCB) regarding repayment of amounts associated with servicers failing to meet reasonable diligence timeframes. These Demand Letters are being rescinded until further notice.

Please click here to view the online directive.

GAO-14-17 Combatting Foreclosure Rescue Schemes

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

On October 29, the U.S. Government Accountability Office (GAO) released GAO-14-17, subtitled Financial Crime: Foreclosure Rescue Schemes Have Become More Complex, and Efforts to Combat Them Continue. Following is a summary.

Financial Crime: Foreclosure Rescue Schemes Have Become More Complex, and Efforts to Combat Them Continue

What GAO Found

Foreclosure rescue schemes remain at historically high levels and have become more complex. The Federal Trade Commission’s (FTC) Consumer Sentinel Network–an online database of consumer complaints received by FTC, law enforcement agencies, and other organizations–showed that complaints about these schemes rose from around 9,000 in 2009 to more than 18,000 each year in 2010, 2011, and 2012. In addition, the Financial Crimes Enforcement Network reported steady increases over the same period in the number of Suspicious Activity Reports (SAR)–reports filed by financial institutions about suspected violations of financial laws and regulations–related to these schemes. Agency officials and representatives of nonprofits told GAO that the schemes had become increasingly complex, creating challenges for law enforcement. For example, schemes involving attorneys–which tend to involve greater losses–had become more common in recent years following a regulation that bans upfront fees, but provides an exception for attorneys. These schemes present unique challenges because attorneys typically collect fees upfront and enforcement officials have difficulty trying to determine whether attorneys are providing legitimate services. Furthermore, officials and representatives of nonprofits also noted that some populations, including minorities and the elderly, continued to be targeted.

Since GAO last reported on this issue in 2010, the Financial Fraud Enforcement Task Force (FFETF) and its members have undertaken a number of actions to educate borrowers on how to avoid being victimized by these schemes. These efforts have also emphasized the need for consumers and institutions to report possible fraudulent schemes and the importance of enhanced information sharing among law enforcement agencies investigating and prosecuting these schemes. Specifically, FFETF members have developed and participated in various outreach efforts, including hosting regional education summits for distressed homeowners, counselors, and law enforcement officials and directing more individuals to resources on FFETF’s mortgage fraud webpage, StopFraud.gov. FFETF member agencies’ fraud detection efforts have focused on gathering information from SARs and complaints from the FTC Consumer Sentinel Network and sharing this information among members. Member agencies that GAO contacted also indicated that information sharing and coordination on investigations among FFETF members had led to joint investigations and broad enforcement initiatives. For example, one year-long multiagency effort resulted in criminal charges against 107 defendants. Cases were also filed against 128 civil defendants in federal courts across the country.

Why GAO Did This Study

In July 2010, GAO reported on federal efforts to combat foreclosure rescue schemes–schemes that promise but do not deliver foreclosure prevention assistance. Subsequently, the Dodd-Frank Wall Street Reform and Consumer Protection Act required GAO to study interagency efforts to crack down on these schemes. This report updates GAO’s 2010 report and examines (1) available information about the prevalence and nature of foreclosure rescue schemes, and (2) the status and scope of the federal government’s multiagency effort and other major initiatives to combat them. To address these objectives, GAO analyzed consumer complaints, obtained information from federal agencies participating in FFETF, and interviewed representatives of six states with high populations of borrowers at risk of foreclosure, and nonprofit organizations that are also making efforts to combat these schemes.

In its written comments, Treasury noted that it valued GAO’s insights as it continues to combat foreclosure rescue schemes. The Special Inspector General for the Troubled Asset Relief Program concurred with the findings related to its work and noted that it has made significant progress in combating these schemes and will continue to work with law enforcement partners to investigate them.

For more information, contact Lawrance L. Evans, Jr. at (202) 512-8678 or evansl@gao.gov.

Please click here to view the report in its entirety.

Please follow the link for a related article from MortgageOrb.
GAO reports an increase in foreclosure rescue schemes