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USDA: Special Relief Measures for Natural Disasters

Investor Update
February 20, 2018

In response to recent natural disaster events, the 3555 Handbook, Chapter 18 Section 4:  Assistance in Natural Disasters will be amended to add Special Relief Measures.  Servicers may use Special Relief Measures immediately to respond to borrowers who are reaching the end of their forbearance periods.  We anticipate publication of the handbook changes on May 1, 2018.
 
18.11 Special Relief Measures
 
In addition to standard workout options, eligible borrowers may be offered the following special relief measures to assist borrowers without the standard financial evaluation required subject to the following conditions:
 

  • The loan was current or less than thirty (30) days past due as of the date of the applicable Presidentially Declared Disaster (PDD);
  • The servicer receives verification the hardship (employment and/or property) has been resolved;
  • Total modified mortgage principal and interest payment is less than or equal to the payment prior to modification.

Special Relief Measures shall be considered in the following order:

  • Term Extension:  If the servicer determines the borrower is capable of maintaining the current contractual payment including any escrow shortage created by advancements during the forbearance period (can be spread over 60 months), the loan term may be extended an equal number of months to the term of the forbearance provided.  Any interest accrued during the forbearance period should be waived and the servicer may re-amortize the loan if necessary to meet any investor restrictions.
  • Capitalization of Delinquency and Term Extension:  If the servicer determines the borrower is capable of maintaining the current contractual payment, but cannot manage the additional escrow repayment amount, the servicer may offer a Cap and Extend Modification under the following terms:

    • 1. Capitalize the accumulated arrearages and eligible unreimbursed servicer advances, fees and costs into the modified mortgage balance;
    2. Extend term up to 360 months;
    3. Reduce rate down to no greater than 50 basis points greater than the most recent Freddie Mac Weekly Primary Mortgage Market Survey (PMMS) Rate for 30-year fixed-rate conforming mortgages (US Average), rounded to the nearest one-eighth of one percentage (0.125%), as of the date a plan is offered to the borrower;
    4. The borrower’s post modified PITI payment must be equal to or less than their payment prior to the disaster.

  • Mortgage Recovery Advance:  If the servicer is unable to offer the borrower either of the first two options the servicer may utilize a mortgage recovery advance to settle the borrower delinquency and return the borrower to a current status.  The mortgage recovery advance is limited to an amount no greater than what is necessary to resolve any accumulated interest and unreimbursed servicer advances made during the forbearance and must meet all other requirements as explained in paragraph 6.R. of the Loss Mitigation Guide found in Attachment 18-A of this Chapter.

Questions regarding this announcement may be directed to the National Office Division at (202) 720-1452.
 
Thank you for your support of the 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

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)

Source: USDA

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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