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Client Resource Center

FAQ regarding FHA Servicing and Loss Mitigation (including NEW information on FHA-HAMP)

VA Circular 26-09-12 - Property Preservation Requirements and Fees

On May 20, 2009 the President signed S. 896, enacting the Helping Families Save Their Homes Act of 2009, described as an Act to prevent mortgage foreclosures and enhance mortgage credit availability. This Act will have long-term and far-reaching effects on the mortgage industry and the ways in which servicing is performed. Addressed in the Act are Fraud, Loan Modification, Moratorium Provisions, Enhanced Oversight of TARP, and Tenant Protections in Foreclosure (Title VII, Protecting Tenants at Foreclosure Act). Each of these elements will require careful study and, in particular, new provisions enhancing and extending the rights of tenants occupying properties in default raise many questions and concerns. Mortgage servicers are urged to contact their legal counsel for guidance on how to proceed. For your convenience, you may find the entire language of the Act HERE. In addition, a copy of the recent Federal Register Notice on Title VII may be found HERE. Further, the eviction issue areas of the USFN REO/Eviction Desk Guide have been expanded and updated in light of the federal Protecting Tenants at Foreclosure Act.  Click here for more information on this updated publication, which was released in November 2009.

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Click here for the latest information from the U.S. Dept. of Treasury, as well as from Fannie Mae, Freddie Mac, HUD, VA, and individual states on this important topic.

The IRS has streamlined the process for relief for distressed homeowners who find themselves blocked from refinancing or selling their property, due to a federal tax lien.  Read about the new process here.

FAILED BANK LIST - The FDIC is often appointed as receiver for failed banks. This page (link below) contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership. This list includes banks that have failed since October 1, 2000.

Borrower's Guide to an FDIC Insured Bank Failure

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WHITE PAPER ON TITLE ISSUES

MODEL LEGAL SERVICES AGREEMENT

In 2001, USFN developed a Legal Services Agreement that law firms and servicers can use as a model for the retention of law firms by servicers for foreclosure, bankruptcy, loss mitigation, and related services.  The model Agreement was developed after reviewing several major mortgage company agreements and creating a standardized version that incoprorates terms needed by both parties.  The model Agreement includes addenda (exhibits) to allow for customization as needed.

Click here to download the Model Legal Services Agreement (Word doc format).  You can then save it to your computer and modify it to suit your needs.

SERVICING TRANSFER CHECKLIST

The USFN Task Force on Servicing Transfers / Best Practices was organized in 2004, as an outgrowth of discussions at the USFN Advisory Board meetings.

The purpose of the Task Force was to develop a set of best practices for servicing transfers.   The best practices would set forth suggestions from the attorney’s perspective on how servicers can improve the servicing transfer process.  The best practices would also provide a perspective from the legal department and default departments of participating servicers.  Once completed, the best practices would be made available to all servicer shops, encouraging sharing within their departments that handle these servicing transfers.

The following Best Practices are made available by USFN and its Advisory Board for the use of all servicers.   Developed in “checklist” format, they are intended to set forth the standard operating procedures and processes to assist in an orderly and complete transfer of servicing portfolios from one shop to another.  It is hoped that the checklists, one each for outgoing and incoming transfers, will be an effective tool for servicing companies to use in training and guiding their staff who handle transfers.

• New Servicer  
• Transferring Servicer  

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MODEL ATTORNEY REPORT CARD

In 2002 and 2003, a group of 20 individuals, collectively known as the Servicer-Attorney Collaboration Task Force, a subgroup of USFN’s Advisory Board, met on a number of occasions to discuss the issue of attorney “report cards,” or scorecards.   Seven law firms (USFN Member firms) of varied size represented the Attorney input, while representatives from 10 major servicing companies (and one GSE) provided the input on behalf of the Servicers.

The objectives for this group were to:

• Discuss and reach consensus on issues pertaining to the various report card formats that are currently used by servicing companies to rate attorney firms on their work;
• Share best practices;
• Draft a model uniform report card format, for judicial and non-judicial states, with some flexibility for individualization, while still providing a standardized format to eliminate the necessity for a majority of the “keyed” responses from the law firms.

The result of this 18-month project are the Model Report Card and a User’s Guide, which set a basic framework from which a servicing company can construct a report card tool to use in scoring and ranking its law firms on work performed.   The group noted that during the process, from initiation of “first legal” through the sale of the property, that certain events can be outside the control of either the law firm and/or the servicer.  To address this issue, “carve-outs” were agreed to by the group, to allow for recognition of such events during the scoring process.

This Model Report Card and User’s Guide are made available by USFN and by the Servicer-Attorney Collaboration Task Force members, for use by any servicer who may be looking for the initial basis for its organization’s report card, or for a comparative model.

• Attorney Report Card Template  
• User's Guide 

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DISCLAIMER

USFN, its Members, and other contributors have prepared the information contained in the above documents as a public service and for general information purposes only. The information may or may not reflect the most current legal developments and under no circumstances should readers rely solely on this material. Readers should seek independent and competent legal counsel before acting upon any information contained herein.  This information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice or legal opinion, or to substitute for obtaining legal advice from an attorney licensed in your state. It is advisable that servicers and other readers contact local counsel familiar with the rules, practices, and interpretations of the particular jurisdiction.