Guide Bulletin 2012-29 Provides Special Guidance for Hurricane Sandy Relief
December 18, 2012
Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-29 builds upon previously communicated disaster relief policies by providing special requirements to help borrowers who are experiencing disruptions in their ability to make their mortgage payments on time because of Hurricane Sandy.
In addition to today's Guide Bulletin, we are informing you of a clarification we made to Attachment A in Guide Bulletin 2012-20 for Servicer Success Scorecard performance criteria calculations.
Hurricane Sandy Relief Policy Updates in Guide Bulletin
The following temporary requirements and associated reimbursement amounts are effective immediately for properties in eligible disaster areas impacted by Hurricane Sandy.
- Conducting Property Inspections
- Delinquent Borrowers: You must conduct one interior property inspection if the borrower was delinquent and the property was abandoned as of or prior to the area being declared an eligible disaster area. This interior property inspection will replace the next regularly scheduled monthly exterior property inspection.
- Current Borrowers: If the borrower was current in the most recent reporting cycle just prior to the area being declared an eligible disaster area, you must conduct one exterior property inspection.
- Reimbursement for Property Inspections
You will be reimbursed for the costs associated with the property inspections as follows:
- Up to $20 per property for one interior property inspection if the borrower was delinquent and the property was abandoned as of or prior to the area being declared an eligible disaster area impacted by Hurricane Sandy.
- Up to $10 per property for one exterior property inspection if the borrower was current in the most recent reporting cycle just prior to the area being declared an eligible disaster area impacted by Hurricane Sandy.
- Transitioning Borrowers from Forbearance Plans to Trial Period Plans
If a borrower was previously performing in accordance with the terms of a trial period plan prior to Hurricane Sandy, then within 30 days prior to the conclusion of the borrower's forbearance plan, you must determine whether the borrower's financial circumstances continue to be adversely impacted by Hurricane Sandy. This determination is based on verbal confirmation with the borrower and the most recent property inspection. Once you determine the borrower's financial circumstances, refer to Guide Bulletin 2012-29 for specific steps you must follow. Depending on the borrower's financial circumstances, you will need to either:
- Offer the borrower a new Home Affordable Modification program (HAMP) or Freddie Mac Standard Modification trial period plan, or
- Obtain an updated Borrower Response Package to re-evaluate the borrower's eligibility for a HAMP or Freddie Mac Standard Modification trial period plan. If a borrower is unable to provide updated documentation, you may use the verbal information they provide to re-evaluate their eligibility and submit your recommendation to Freddie Mac through Workout Prospector® for approval.
- Reporting Forbearance Plans
Prior to reporting an approved forbearance plan, you must close out either the HAMP or Standard Modification through electronic default reporting (EDR) by reporting the loan ineligible for a modification using the "HE" code.
- Workout Prospector Reminder
Servicers must keep the previously approved trial period plan in "approved status" in Workout Prospector until the end of the forbearance plan. If the borrower's financial circumstances have returned to their pre-Hurricane Sandy level, then you will not re-underwrite the borrower and you will rely on your trial period plan approval that occurred prior to the forbearance plan. If the borrower's financial circumstances continue to be adversely affected at the end of the forbearance plan, at that time, you will need to re-underwrite the borrower through Workout Prospector or your own proprietary system.
As a reminder, you must continue monitoring the FEMA website. New eligible disaster areas continue to be identified as damage assessments and requests for federal assistance are completed.
Clarification to Servicer Success Scorecard Performance Criteria Calculations
In Guide Bulletin 2012-20, we published the definitions for the revised Servicer Success Scorecard performance criteria in Attachment A. We recently updated Attachment A to clarify that the calculations of the following criteria require division:
- Loss Mitigation
- Workout Effectiveness
- Default Timeline Management – Loans Beyond Foreclosure Sale Threshold
All other supporting materials, including the Revised Servicer Success Scorecard Criteria Reference Guide published on December 10, 2012, contain correct calculation descriptions.