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USDA: Servicing Relief for Borrowers Impacted by Presidentially Declared Disaster Areas During the COVID-19 Pandemic

Investor Update
September 8, 2020

Source: USDA

USDA Rural Development has taken a number of immediate actions to help borrowers across the country.  This announcement outlines relief measures for holders and/or loan servicers of USDA Single Family Housing Guaranteed Loan Program (SFHGLP) mortgages and provides guidance on assisting borrowers affected by a Presidentially Declared Disaster (PDD) area during the COVID-19 pandemic.  These borrowers may be eligible for immediate temporary relief.

To date, the President has declared a major disaster in every state and most territories in connection with COVID-19.  The following guidance applies to all borrowers affected by PDD areas in addition to the COVID-19 pandemic.  Loan servicers seeking to assist SFHGLP borrowers may pursue any of the relief options referenced in the following USDA guidance.  Complete details outlining “Assistance in Natural Disasters” is located in Chapter 18 of the online program Handbook.

1. IMMEDIATE MORATORIUM/FORECLOSURE SUSPENSION: An immediate moratorium may be put in place for borrower’s whose properties are directly impacted by a PDD area or if borrower’s place of employment is directly impacted by the PDD area. Due to the magnitude and aftermath of a major natural disaster, loan servicers must inspect properties that secure SFHGLP loans to assess the extent of damage as well as the occupancy status, particularly if contact has not yet been made with the borrower. The servicer must suspend all foreclosure actions for borrowers whose property has been affected by a PDD area.  This applies to both the initiation of new foreclosures, as well as foreclosures already in process.

2. FORBEARANCE: USDA encourages SFHGLP loan servicers to evaluate forbearance alternatives to borrowers in distress as a result of PDD areas. Precise and consistent communication with borrowers should help determine whether their difficulties are directly or indirectly related to the PDD areas, or whether the issue stems from other sources which must be addressed. Guidance relating to this topic can be found in Chapter 18 of the program Handbook.

3. COVID-19: Borrowers currently experiencing a hardship due to COVID-19 or on a forbearance associated with COVID-19 may be impacted by a major natural disaster; these borrowers should continue to receive payment relief under the initial terms put in place. For all other borrowers, the loan servicer must evaluate the borrower for all loss mitigation options available.

4. REPORTING: Servicers are reminded that they must report the appropriate default status codes associated with the actions taking place. These instructions apply only to USDA Electronic Status Reporting requirements and does not apply to credit bureau reporting. Servicers should confer with their legal team for requirements pertaining to credit bureau reporting. The COVID-19 default status codes are located in the Gov Delivery dated June 26, 2020.

5. DOCUMENTATION: Servicers should fully document their decisions when loss mitigation servicing actions are implemented. The documentation should substantiate their loss mitigation decision and should follow the Agency’s outline in “Assistance in Natural Disasters”, located in Chapter 18 pf the program Handbook.

Questions regarding program policy and this announcement may be directed to the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.

Thank you for your support of the Single-Family Housing Guaranteed Loan Program!

Links to websites:

SFHGLP Lending Partner Webpage: https://www.rd.usda.gov/page/sfh-guaranteed-lender

SFHGLP webpage: https://www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program

USDA LINC Training and Resource Library:

https://www.rd.usda.gov/programs-services/lenders/usda-linc-training-resource-library

Procedure Notices: https://www.rd.usda.gov/resources/directives/procedures-notices

Help Resources

Policy Questions

Customer Service Center

Phone: 866-550-5887

Single Family Housing Guaranteed Loan Division

Phone: 202-720-1452

USDA ITS Service Desk Support Center

For e-Authentication assistance

Email: eAuthHelpDesk@ftc.usda.gov

Phone: 800-457-3642, option 1 (USDA e-Authentication Issues)

Rural Development Help Desk

For GUS system, outage or functionality assistance

Email: RD.HD@STL.USDA.GOV

Phone: 800-457-3642, option 2 (USDA Applications); then option 2 (Rural Development)

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties