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  • OCC releases 2018 first quarter mortgage performance results

    Federal Issues

    On June 19, the OCC announced the release of the “OCC Mortgage Metrics Report, First Quarter 2018,” its quarterly report of the performance of seven national bank mortgage servicers, which includes data for over one third of all outstanding U.S. residential mortgages. As explained in the Report, foreclosure activity for the first quarter of 2018 increased by 8 percent from the previous quarter but was down 21.5 percent compared to the first quarter of 2017. Overall, mortgage performance remained unchanged from the first quarter of 2017, with 95.6 percent of mortgages current and performing as of the end of the quarter. Servicers initiated 37,300 new foreclosures in the first quarter of 2018 and completed 23,427 mortgage modifications, with most modifications involving a reduction in borrower monthly payments. The OCC further noted, among other things, that the number of home forfeiture actions during the quarter—completed foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions—decreased by 32.5 percent compared to the first quarter of 2017.

    Federal Issues OCC Mortgages Foreclosure Mortgage Modification

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  • FTC bans mortgage relief defendant from future debt relief activities

    Federal Issues

    On June 7, the FTC announced a settlement with an individual who allegedly operated a mortgage relief scheme, which charged distressed homeowners thousands in upfront fees while falsely promising foreclosure prevention or payment modifications. According to the FTC, the defendant, operating through multiple company names, falsely suggested the businesses were endorsed by the federal government and encouraged consumers not to communicate with their mortgage company and to stop making monthly mortgage payments. The settlement order imposes a judgment of more than $15.5 million but suspends the judgment due to the individual’s inability to pay. The settlement prohibits the individual from, among other things, (i) advertising, marketing, promoting, offering, or selling debt relief services or products; and (ii) misrepresenting, or assisting others in misrepresenting information relating to the offering of financial products and services. Additionally, the settlement bars the individual from disclosing or benefitting from the information collected from the consumers through the business operations.

    Federal Issues FTC Debt Relief Mortgages Mortgage Modification Foreclosure

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  • VA updates Disaster Loan Modification guidance regarding re-amortization

    Federal Issues

    On May 8, the Department of Veterans Affairs (VA) released clarification of its Disaster Loan Modification guidance in circular 26-17-39. (Previously covered by InfoBytes here.) The revised circular now allows a servicer to re-amortize if necessary to meet investor guidelines, so long as the new monthly payment is the same or less than the current.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Department of Veterans Affairs Mortgages Mortgage Modification

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  • Fannie Mae and Freddie Mac release updates to servicing guides

    Federal Issues

    On April 11, Fannie Mae updated its Servicing Guide, regarding servicing transfer welcome calls. Pursuant to Fannie Mae SVC-2018-03, transferee servicers are no longer required to, among other things, initiate welcome calls within five days of the transfer of servicing. Transferee servicers may now implement their own processes for borrower contact as long as the servicer remains in compliance with applicable laws. Fannie Mae also updated the Servicing Guide to add flexibility in connection with the collection of escrow shortages during a mortgage modification.  Under the amendment to the Servicing Guide, servicers may spread repayment of the shortage amount over a term of up to 60 months, unless the borrower decides to pay up-front. Additionally, Fannie Mae released a revised Reverse Mortgage Loan Servicing Manual, which includes updates to expense reimbursement claim submissions and mortgage loan status codes.

    On the same day, Freddie Mac released Guide Bulletin 2018-6, which, among other things, updates servicer requirements on Subsequent Transfers of Servicing (STOS) and borrower-paid mortgage insurance. Effective July 23, transferor servicers must use the automated STOS request system and new transfer requests must be submitted at least 45 days and no more than 60 days prior to the effective date of the transfer. The Bulletin also provides additional details on initiating the electronic STOS and executing the STOS agreement. There will be a temporary moratorium on STOS requests and modifications to existing requests from July 9 through July 20, in order for Freddie Mac to implement the new process.

    Separately, the Bulletin includes various changes to streamline servicer responsibilities in canceling borrower-paid mortgage insurance, such as now allowing servicers to process a borrower’s verbal request to cancel mortgage insurance and simplifying the process to determine current value.  

    Consistent with the Fannie updates, Freddie Mac also modified its escrow shortage collection requirements to allow repayment to be spread over up to 60 months.

    Federal Issues Fannie Mae Freddie Mac Servicing Guide Mortgages Mortgage Modification Mortgage Servicing Reverse Mortgages Mortgage Insurance

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  • VA Releases New Disaster Loan Modification Option

    Federal Issues

    On November 27, the Department of Veterans Affairs (VA) announced a new Disaster Loan Modification option via circular 26-17-39. In addition to the existing VA Disaster Loan Modification process, which allows servicers to extend permanent payment relief to disaster-impacted borrowers without a completed application, the VA will now allow servicers the option to waive the three-month trial period payment (TPP) requirement. According to the circular, servicers will be able to waive the TPP requirement to extend the term of the new loan by the number of months the borrower is delinquent, and must waive any accrued delinquent interest. Additionally, the loan must have been current at the time of the disaster and the VA must approve any term extensions greater than 12 months.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Department of Veterans Affairs Mortgages Mortgage Modification

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  • Fannie and Freddie Introduce Extended Modifications for Disaster Relief

    Federal Issues

    On November 2, at the direction of the Federal Housing and Finance Authority (FHFA), Fannie Mae introduced in Lender Letter LL-2017-09 (Letter) a temporary forbearance mortgage loan modification (Extend Mod) for servicers with mortgage loans affected by the recent disasters. The Letter covers the requirements for an Extend Mod, including outlining loan eligibility criteria. Among other requirements, the loan must (i) be located in a FEMA-Declared Disaster Area; (ii) be less than 31 days delinquent when the disaster occurred and complete the forbearance plan while between 31 days delinquent and 360 days delinquent; (iii) not be delinquent after being previously modified with an Extend Mod from the same disaster; (iv) not be insured or guaranteed by a federal government agency; and (v) not be subject to a recourse or indemnification arrangement, another workout option, or a current repayment plan that is performing. The Letter also provides information on disbursing hazard loss draft proceeds, reimbursement for property inspections, and payment records for borrower-initiated termination of mortgage insurance.

    Under the same FHFA direction and in coordination with Fannie Mae, Freddie Mac issued Guide Bulletin 2017-25 announcing the servicing requirements for the Freddie Mac Extend Modification for Disaster Relief. Both Fannie and Freddie note the deadline for implementing the Extend Mod is February 1, 2018.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Mortgages Mortgage Modification Mortgage Servicing FHFA Fannie Mae Freddie Mac

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  • VA Extends Foreclosure Moratorium Following Hurricane Disasters; Federal Agencies Issue Appraisal Exceptions; Freddie Mac Extends Temporary Selling Requirements Related to Wildfire Areas

    Federal Issues

    Hurricane Relief. The Department of Veterans Affairs (VA) is extending the foreclosure moratorium on properties affected by the recent hurricanes. For disaster areas impacted by Harvey, Irma, and Maria, the VA is updating the original circulars to change the 90-day moratorium to 180 days (a complete list of change notices can be found here).

    On October 24, the FDIC, Federal Reserve, National Credit Union Administration, and the OCC issued a temporary exception to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) appraisal requirements for areas affected by the recent hurricanes. More specifically, the FDIC's Financial institution Letter states that the agency will not require financial institutions to obtain appraisals for affected transactions, if (i) the properties involved are located in areas declared major disasters; (ii) there are binding commitments to fund the transactions within 36 months of the date the areas were declared major disasters; and (iii) the value of the real properties support the institutions' decisions to enter into the transactions.

    California Wildfire Relief. On October 25, Freddie Mac released Guide Bulletin 2017-24 extending the temporary selling requirements applied to hurricane disaster areas to eligible disaster areas impacted by the California wildfires. As previously covered by InfoBytes, Freddie Mac is requiring servicers to suspend foreclosure sales and eviction activities and has agreed to reimburse sellers for certain property inspections for property located in eligible disaster areas.

    Here is a complete list of InfoBytes disaster relief coverage.

    Federal Issues Disaster Relief Department of Veterans Affairs Freddie Mac Mortgages Lending FDIC FIRREA Mortgage Modification

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  • FinCEN Encourages Communication from Financial Institutions Affected by the California Wildfires; FDIC Offers Regulatory Relief; FHA Extends Foreclosure Moratorium

    Federal Issues

    California Wildfire Relief. On October 19, FinCEN announced that financial institutions affected by the California wildfires should contact FinCEN and their functional regulator regarding any delays in their ability to file Bank Secrecy Act reports and to keep FinCEN and the regulators apprised of subsequent changes in their circumstances.

    On October 20, the FDIC announced steps to provide regulatory relief to financial institutions and facilitate recovery in areas of California affected by recent wildfires. The FDIC is encouraging banks to work constructively with borrowers affected by the wildfires, including extending repayment terms, restructuring existing loans, or easing terms for new loans. The FDIC noted that financial institutions may receive favorable Community Reinvestment Act (CRA) consideration in support of disaster recovery and will consider regulatory relief from certain filing and publishing requirements.

    Hurricane Relief. On October 20, HUD issued an additional 90-day extension of the initial disaster foreclosure moratorium for FHA mortgaged properties located in specified areas impacted by the recent hurricanes. The foreclosure moratorium applies to the initiation of foreclosures and foreclosures already in process. The new extended dates are as follows: February 21, 2018 for Hurricane Harvey, March 9, 2018 for Hurricane Irma, and March 19, 2018 for Hurricane Maria.

    As previously discussed in InfoBytes, several federal agencies have announced regulatory relief for victims of recent natural disasters.

    Federal Issues Disaster Relief FinCEN Bank Secrecy Act FDIC FHA Foreclosure Mortgages HUD Mortgage Modification

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  • Federal Agencies Offer Consumer Relief Measures Following Recent Natural Disasters

    Lending

    On October 13, the Department of Veterans Affairs (VA) released two circulars (here and here) describing measures mortgagees may employ to provide relief to VA home loan borrowers affected by recent California wildfires and Hurricane Nate. Referencing the VA’s guidance on natural disasters, the VA’s recommendations include: (i) extending forbearance to distressed borrowers; (ii) establishing a 90-day moratorium on initiating foreclosures on affected loans; (iii) waiving late charges; (iv) suspending credit bureau reporting with the understanding that servicers will not be penalized by the VA; and (v) extending “special forbearance” to National Guard members who report for active duty to assist recovery efforts.

    Separately, on October 17, the Federal Reserve Board, FDIC, National Credit Union Administration, and OCC released a joint notice under the Financial Institutions Reform, Recovery, and Enforcement Act that temporarily eases appraisal requirements for real estate-related financial transactions in areas impacted by recent hurricane disasters. The four agencies will allow appraisal exceptions, provided that financial institutions determine, and obtain documentation related to, the following: (i) the property involved is located in a major disaster area; (ii) there exists a binding commitment to fund the transaction within 36 months of the date the area was declared a major disaster; and (iii) “the value of the real property supports the institution’s decision to enter into the transaction.” The expiration date for exceptions in each area covered by the notice is three years after the date the President declared the area to be a major disaster area.

    As previously discussed in InfoBytes, several federal agencies have announced regulatory relief for victims of recent natural disasters.

    Lending Disaster Relief Mortgages Foreclosure FIRREA Federal Reserve Department of Veterans Affairs FDIC NCUA OCC Consumer Finance Mortgage Modification

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  • Federal Agencies Offer Regulatory Relief for Hurricane Victims

    Federal Issues

    Federal agencies continue to announce regulatory relief for financial institutions aiding consumers affected by recent hurricane disasters. InfoBytes coverage on previous disaster relief measures can be accessed here, here, and here.

    Freddie Mac. On September 25, Freddie Mac issued Bulletin 2017-21 (Bulletin) to extend certain temporary selling and servicing requirements meant to provide flexibility and relief for mortgages and borrowers in areas impacted by all hurricanes occurring on or after August 25 through the 2017 hurricane season. In particular, Freddie Mac will reimburse sellers for property inspections completed prior to the sale or securitization of mortgages secured by properties in disaster areas caused by a 2017 hurricane. Freddie Mac is also requiring servicers to suspend foreclosure sales and eviction activities on property located in eligible disaster areas affected by Hurricane Maria. However, the Bulletin provides that a servicer can proceed with a foreclosure sale if it can confirm that (i) inspection was completed on a mortgaged property “identified as vacant or abandoned prior to Hurricane Maria,” and (ii) the property sustained no “insurable damage.” The Bulletin also reminds servicers to report all mortgages affected by an eligible disaster that are 31 or more days delinquent to Freddie Mac.

    Veterans Affairs (VA). On September 27, the VA issued Circular 26-17-28 to outline measures that it encourages mortgagees to utilize to provide relief to veterans affected by Hurricane Maria. Specific recommendations include: (i) extending forbearance to distressed borrowers; (ii) establishing a 90-day moratorium on initiating foreclosures on affected loans; (iii) waiving late charges; (iv) suspending credit bureau reporting with the understanding that servicers will not be penalized by the VA; and (v) extending “special forbearance” to National Guard members who report for active duty to assist recovery efforts.

    FDIC. On September 27, the FDIC released a financial institution letter to provide additional guidance for depository institutions assisting affected consumers. As previously covered in Infobytes, the FDIC released guidance for Hurricane Harvey disaster relief, and issued a joint press release in conjunction with the Federal Reserve Board, Conference of State Bank Supervisors, and the OCC as a response to those affected by Hurricane Irma. The newest release, FIL-46-2017, announced regulatory relief for financial institutions affected by Hurricane Maria, and steps to facilitate recovery in affected areas, which include: (i) “extending repayment terms, restructuring existing loans, or easing terms for new loans,” and (i) “encourage[ing] depository institutions to use non-documentary verification methods permitted by the Customer Identification Program requirement of the Bank Secrecy Act for affected customers who cannot provide standard identification documents.” Further, banks that support disaster recovery efforts, the FDIC noted, may receive favorable Community Reinvestment Act consideration.

    SEC. On September 28, the SEC issued an order providing regulatory relief to companies and individuals with federal securities law obligations who have been affected by recent natural disasters. The order provides conditional exemptions to certain securities laws requirements for specified periods of time. The Commission additionally adopted “interim final temporary rules” applicable to Regulation Crowdfunding and Regulation A filing deadline extensions.

    Financial Crimes Enforcement Network (FinCEN). On October 3, FinCEN issued a notice to financial institutions that file Bank Secrecy Act reports to encourage communication with FinCEN and their functional regulator regarding any expected filing delays caused by recent hurricanes.

    Federal Issues Consumer Finance Compliance Disaster Relief Flood Insurance Mortgages Foreclosure Freddie Mac Department of Veterans Affairs FDIC SEC FinCEN Bank Secrecy Act CRA Securities Mortgage Modification

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