PWS_Foreclosure_Services_2-6-18.pdf

PERFORMANCE WORK STATEMENT

FORECLOSURE SERVICES

FEBRUARY 7, 2018

SECTION 1: GENERAL INFORMATION

1.1 INTRODUCTION AND OVERVIEW.

Rural Development (an Agency of the United States Department of Agriculture herein called the “Agency” or “the Government”) seeks to retain private licensed attorney(ies) or law firm(s) (hereinafter the “Contractor”) to provide legal and related services for foreclosures, bankruptcies, and/or actions to recover possession related to Section 502/504 Single Family Housing debts to the United States of America, United States Department of Agriculture, Rural Development. These services shall be provided for properties in the State of Colorado. The majority of the foreclosures will be completed using the non-judicial foreclosure process through the relevant public trustee. Where the Contractor indicates after review that an assigned case does not meet the technical requirements for non-judicial foreclosure, the Agency may reassign the case to the Contractor for judicial foreclosure.

1.2 BACKGROUND

The Agency provides loans to individuals to purchase single family homes. These loans are made to individuals in the very low and low income categories in rural areas of Colorado. The loan security is a Deed of Trust and may be in a senior or junior lien position. Upon default of the loan terms, it is necessary for the Agency to complete foreclosure of the Deed of Trust in accordance with the Colorado Revised State Statutes.

Section 1045 of the Stewart B. McKinney Homeless Assistance Act of 1988 amended Section 510(d) of the Housing Act of 1949 [42 U.S.C. 1480(d)] to provide the Secretary of Agriculture, in the prosecution or defense of any litigation under Section 502/504, the discretion to use the services of U. S. Attorneys, the USDA Office of the General Counsel, or any other attorney with whom the Secretary enters into a contract, upon determining that the attorney will provide competent and cost-effective representation for Rural Development. Section 502/504 loans are generally secured by first mortgages on modest dwellings located on non-farm tracts of one acre or less. In some instances, Rural Development also holds subsequent mortgages on the security, usually without intervening liens.

1.3 OBJECTIVE AND SCOPE

The Contractor must provide all facilities, materials, supplies, tools, equipment, personnel, travel arrangements and miscellaneous costs necessary to accomplish the performance of the agreement requirements including:

• Non-judicial foreclosure,

• Judicial foreclosure,

• Eviction/Possession,

• Relief of Stay Orders in bankruptcy cases including Chapter 7, 11, and 13,

• Deed in Lieu of Foreclosure.

The work shall be performed throughout the State of Colorado as described. USDA Rural Development retains the right to determine the cases to be assigned under this agreement, and may elect not to use legal services for all cases handled during the term of the agreement.

1.4 CASE ASSIGNMENT

The Agency retains the sole right to determine the cases to be assigned under this agreement. Award of this agreement does not guarantee the Contractor any minimum number of cases during the term of the agreement.

1.5 PLACE OF PERFORMANCE

The Contractor must provide services throughout designated area(s) that they have indicated they have the ability and interest to serve. These areas in total cover the entire State of Colorado, exclusive of tribal trust land.

All non-judicial actions must be filed in the county where the security property is located. Judicial actions, if assigned, must be filed with the relevant court for the location of the security property.

1.6 FIRM PERSONNEL QUALIFICATIONS

Any attorney performing legal services under this agreement, whether an individual firm or a member of another firm, shall be duly licensed to practice law in the State of Colorado and must currently be in good standing with the Colorado State Bar. Contractor must provide proof thereof. (Attorney may provide a copy page from the Colorado Supreme Court website proving their status is active.)

The Contractor must not employ any person who is an employee of the U.S. Government if employing that person would create a conflict of interest.

1.7 CONTRACTOR CONDUCT

The Contractor shall:

• Furnish sufficient labor, materials, transportation, equipment, operating supplies, and incidentals to complete the work as specified in each order.

• Perform all services in a professional manner, using due professional care in all counties affected by each specific order in Colorado.

• Provide a sufficient number of qualified personnel and, in a timely fashion, perform the services according to the delivery schedule specified in each order.

• Not remove, replace, or otherwise reassign any personnel without prior approval of the

Government, unless such person’s employment with the Contractor was terminated by the employee of the Contractor, or for any other lawful cause for cessation of employment. The Government reserves the right to pre-approve assignment of each original and any replacement staff proposed by the Contractor.

In the event of the assignment of an unqualified individual to an order, the Contractor acknowledges and agrees that it shall promptly remove such personnel and that the Government will not incur additional cost due to the replacement of the individual. Further, the Contractor shall bear all cost related to training and educating any individuals to perform services under this Blanket Purchase Agreement (BPA).

All work shall be performed by, or under the direct supervision of the Contractor. All work performed by others must be reviewed and approved by the Contractor prior to submission of the required documents to the Government.

Request deviations from the specifications of this BPA in writing. Approval or disapproval of these requests will be in writing from the Contracting Officer (CO). Approval must be received before deviating from the specifications.

1.8 INSURANCE

The Contractor must maintain professional liability insurance coverage for errors and omissions in the amount of at least $350,000 for the firm and its attorneys with a deductible not to exceed $5,000; and fidelity coverage in the amount of $350,000 for each individual who will have access to proceeds from the foreclosure actions under this agreement. Within 30 days from acceptance of this agreement, the Contractor shall present evidence of said professional liability insurance coverage for errors and omissions.

1.9 CONFLICT OF INTEREST

The Contractor shall be bound by Section 1.7 of the American Bar Association Model Rules of Professional Responsibility (1983) dealing with conflicts of interest, as well as all applicable provisions of the Colorado Rules of Professional Conduct. The Contractor, AND any of their subcontractors, shall not, personally or through a third party, buy or acquire an Agency financed or acquired property covered by this agreement. It shall be the responsibility of the Contractor to determine if representing the Government in any case assigned could or would be a conflict of interest or create the appearance of a conflict of interest. If a particular case assigned poses such a conflict or perceived conflict, the case shall be returned to the Single Family Housing Staff (SFHS) prior to initiation of any action.

1.10 QUALITY CONTROL

The Contractor is responsible for quality control to ensure services are performed in accordance with this Agreement. The Contractor shall implement procedures to identify, prevent, and ensure non-recurrence of defective services. The Contractor’s quality control program is the means by which the Contractor assures itself that its work complies with the requirements of the Agreement.

1.11 POST AWARD CONFERENCE/PERIODIC PROGRESS MEETINGS

The Contractor agrees to participate in any post award conference. The Contracting Officer or Loan Specialist (LS) may meet periodically with the Contractor to review the Contractor’s performance. At these meetings the Contracting Officer and/or LS will apprise the Contractor of how the government views the Contractor’s performance and the Contractor will apprise the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings will be conducted by phone or at the Contractor’s location and shall be at no additional cost to the government.

1.12 RECORDS & REPORTS OF CONTRACTOR ACTIVITY

The Contractor shall maintain detailed records of all activities under this agreement and those records will be subject to Agency review. The Contractor shall provide the LS with copies of complaints, lis pendens, judgments and notices of sales as they are filed.

The Contractor shall maintain records of all activities under this agreement in a manner which accurately describes the efforts of the Contractor to complete the action for which the case was assigned. The Contractor shall make such records available for inspection by the Agency, its counsel, or other Government auditing agency, upon request.

1.13 PROCEEDS FROM ACTIONS

The Contractor shall request that payment of any amounts due the Agency through the foreclosure action under this agreement shall be drawn payable to “USDA Rural Development” and sent to the Contractor for delivery to the Agency. However, if such payments are drawn payable to the Contractor, the Contractor shall endorse the item to “USDA Rural Development” before remitting it to the LS. The Contractor shall make no deduction from such payments for costs which may be due the Contractor under this agreement. The Contractor shall send or deliver all such payments to the Agency within seven calendar days after receipt. Delays in remitting payments to the Agency will be considered a breach of the agreement and cause for termination of the agreement for cause.

1.14 LEGAL CONSULTATION

The Contractor will contact the office listed below for any legal consultation necessary in connection with cases assigned under this Agreement. OGC is available in an advisory capacity. They do not have the authority to take any action, either directly or indirectly that would change the pricing, quantity, quality, place of performance, delivery schedule, or any other terms and conditions of the contract. Nor do they have the authority to direct the accomplishment of any effort which goes beyond the scope of this Agreement.

Thomas L. Japhet, Attorney USDA, Office of General Counsel (OGC) Mountain Regional Office - Denver Phone: 303-275-5555

1.15 CONFIDENTIALTY OF RECORDS

All case files related to assigned cases are records of the Agency and shall be considered a system of records within the meaning of the Privacy Act, 5 USC § 552a. The Contractor shall institute safeguards required by that Act. The Contractor shall take all necessary steps to maintain and ensure the confidentiality of the information contained in each file and to protect against unwarranted disclosure of any such information. The Contractor shall promptly notify the LS if it receives a subpoena requesting disclosure of the case file or documents contained therein.

Disclosure to anyone other than an officer or employee of the contractor or subcontractor at any tier shall require prior written approval of the USDA. Requests to make such disclosure should be addressed to the Loan Specialist.

1.16 RETURN OF CASES TO USDA

The Agency reserves the right in its sole discretion to reclaim a case for any reason. All cases returned to USDA Rural Development should be mailed or delivered to the Single Family Housing Section (SFHS), Colorado Rural Development State Office, along with all supporting documents prepared or filed by the Contractor and all pertinent records of Contractor activities.

When a case is returned to the Agency, upon written request of the SFHS or CO, the Contractor shall only be entitled to payment for actual expenses (such as reimbursement for filing fees or other allowable costs, plus a pro-rata portion of the flat fee agreed upon under this BPA. The pro-rata table for Judicial Foreclosures is as follows:

(A) after assignment but before filing is 20%, (B) after filing complaint but before Judgment is 60%, (C) after Judgment but before sale date is 80% up to the date of the request for return. The pro-rata table for Non-Judicial Foreclosures is as follows: (A) after assignment but before submission to the Public Trustee is 20%), (B) after filing with Public Trustee but before filing with District Court is 60%); (C) after filing with District Court but before sale is 80%.

The Contractor shall have no claim against the Government for any action taken by the Agency, or the U.S.

Attorney subsequent to return of the case, even though the action eliminates the fee to which the Contractor might have been entitled had the case not been reclaimed. The return of the case shall not waive the firm’s liability under the provisions of this agreement or impair the Government’s right to terminate for convenience or default.

1.17 CASES PENDING AT AGREEMENT EXPIRATION

Cases that have been assigned to the Contractor prior to the expiration of the agreement shall be completed within the terms and conditions of the agreement.

1.18 Loan Specialist (LS)

The LS will act as the Contracting Officer’s representative for technical matters, providing technical direction and discussion as necessary with respect to the specification or statement of work, and monitoring the progress and quality of Contractor performance.

The LS monitors all technical aspects of the agreement and assists in agreement administration. The LS is authorized to perform the following functions: perform inspections and review documents as reasonably necessary, in the sole discretion of the LS, to assure that the Contractor performs the technical requirements of the agreement; maintain written and oral communications with the Contractor concerning technical aspects of the agreement; issue written interpretations of technical requirements; monitor Contractor's performance; and notify both the Contracting Officer and Firm of any deficiencies. On reasonable notice, the Contractor shall make available to the LS all documents that are relevant to services performed under this agreement.

The LS is not an Administrative Contracting Officer and does not have the authority to take any action, either directly or indirectly that would change the pricing, quantity, quality, place of performance, delivery schedule, or any other terms and conditions of the contract. Nor does the representative have the authority to direct the accomplishment of any effort which goes beyond the scope of this Agreement.

When, in the opinion of the Contractor, any Government Representative requests efforts outside the existing scope of the agreement, the Contractor shall notify the Contracting Officer in writing within 5 calendar days. The Contractor shall not take on action under such direction until the Contracting Officer has issued a modification to the agreement or has otherwise resolved the issue.

SECTION 2: STANDARDS

All legal, enforcement, and collection actions on the part of the Contractor shall be in compliance with all Federal, State, and local statutes, regulations and ethical standards that apply to the liquidation of loan security and the collection of debts. These include but are not limited to:

Colorado Revised State Statutes; The Privacy Act of 1974, as amended (5 U.S.C. 552a); the Fair Debt Collection Practices Act (15 U.S. C. 1692 et seq.); the Debt Collection Act of 1982, as amended (P.L. 97- 365); the American Bar Association Model Rules of Professional Responsibility (1983); the Debt Collection Improvement Act of 1996; and AB 2246, Disposal Requirements for Consumer Records held by Title Companies (Jan. 2001).

These statutes and standards, as well as other applicable Federal, State, and local laws and regulations pertaining to the Government as a whole are incorporated by reference into this Agreement and are considered as a part of any resulting order. Violation of applicable law, regulation or ethical standards shall be cause for termination of the agreement for default.

Rural Development will provide, upon request, any regulation and discussion of the same necessary to execute the duties under this agreement. FmHA/Rural Development Instructions/Regulations are available for review, on request, at the Rural Development Area Office nearest the firm’s office and online at http://www.rurdev.usda.gov/RegulationsAndGuidance.html

SECTION 3: SPECIFIC TASKS

The Contractor shall provide foreclosure, deed-in-lieu and related services, such as eviction/possession, postponements, and relief from stay.

3.1 FORECLOSURES

Within 15 calendar days after assignment of a case, the Contractor shall commence either a non-judicial foreclosure or a judicial foreclosure and bring the security property to public sale in the minimum time permitted by Federal and State law. All foreclosure sales will be subject to any outstanding prior liens including, but not limited to, real estate taxes and assessments; and all foreclosure actions shall contain an order for possession of the property by the purchaser.

As soon as the foreclosure date and time are set, the Contractor will notify the Point of Contact (LS) as specified on the order. The LS will provide the Contractor specific bidding instructions which establish the maximum bid the Contractor can enter on behalf of the Agency. The Contractor shall enter the bid on behalf of the Agency. In the event the Contractor is bidding at a senior lien holder’s trustee sale or Sheriff’s sale, the Agency will provide bidding instruction and funds to support the Agency’s bid. The results of the foreclosure sale must be reported in writing to the LS and CO within 48 hours.

A foreclosure is deemed to be completed under this agreement:

A. If the Agency was the successful purchaser, then when the contractor provides the Agency with:

1) A copy of the recorded Confirmation Deed or Sheriff’s Deed;

2) A final report on the foreclosure; and

3) Certification of clear title

B. If the property was purchased by a third party, the when the contractor:

1) Provides the PC with a report on the sale, including the purchaser’s name, address and amount of successful bid; and

2) Provides the LS the sale proceeds.

Upon completion, the Contractor will certify to the LS that the foreclosure complied with applicable law and that the purchaser received good, marketable title as appropriate. If a title defect is later discovered and is due to the Contractor's error or omission, then the Contractor shall correct the defect at no cost to the Client. However, the Contractor will not be responsible for any title defect existing prior to creation of the Client's lien or to the Client's failure to record a valid lien prior to this Task Order related to the subject property.

The Contractor will not bill the Agency for foreclosure services, prior to delivery of the Confirmation Deed or the Sheriff’s Deed and certification of clear title to purchaser, report on the sale to the Agency, and disbursement of funds to USDA.

The Contractor will perform all services required to obtain security property title. Transactions may require more or less steps to complete a non-judicial foreclosure action or a judicial foreclosure action in accordance with Federal, State, and local laws, regulations, instructions, policy, practices, and procedures.

3.2 TYPICAL PROCESSES NECESSARY FOR A NON-JUDICIAL FORECLOSURE ACTION

Within 15 calendar days of a file assignment and commence a non-judicial foreclosure action, however, if upon review and discovery that the assigned file does not meet technical requirements for a non-judicial foreclosure action, the Contractor should immediately notify the Contracting Officer and Point of Contact and discontinue work pending reassignment as a judicial foreclosure action.

Order and review a Trustee’s Sale/Foreclosure Guarantee title report to assure the Agency’s lien position and that of senior and junior lienholders.

Prepare all documentation necessary and required by State law to record, publish, post, mail and serve.

Record, publish, post, mail and serve all documents required under State law. Provide the Agency a copy of the Notice of Sale. The Contractor is only authorized to postpone a sale if they are notified of a bankruptcy filing by the borrower or if approved by the Agency in writing.

Communicate with debtors, senior lien holders and junior lien holders regarding alternative resolution proposals.

The Contractor is not authorized to obligate the Agency to any alternative resolution proposals. Communicate all proposals to the LS within 72 hours of receipt. The Agency will provide the Contractor with written instructions and authorization to either reject said offers or consummate said offers. An example would be a short sale request.

Respond to any objections which may have been filed pursuant to Colorado Rules of Civil Procedure Rule 120 and provide any representation before the local District Court that may be necessary under the Rule to obtain the Order Authorizing the Sale.

Request the bidding instructions from the Agency. The Contractor is not authorized to bid on behalf of the Agency without written bidding instructions from the Agency. Bidding instructions provided by the Agency will include any funds required to carry out said instructions.

Attend the Trustee’s Sales and enter the bid on behalf of the Agency.

Report to the Agency within 48 hours of the sale who the successful bidder was and the amount of the successful bid. This can be done via the telephone or e-mail.

After any lien holder redemption periods have expired, the Contractor will then provide the Agency with a written report summarizing the Trustee’s Sale outcome and the original recorded Confirmation Deed. If the public trustee does not issue original deeds, then a copy is acceptable. Any proceeds due the Agency will be returned to the Agency within 5 working days of receipt by the Contractor. Funds should be issued to “USDA Rural Development”. The Contractor will return the Agency’s case file to the Agency within 30 days.

3.3 TYPICAL PROCESSES NECESSARY FOR A JUDICIAL FORECLOSURE ACTION

Within 15 calendar days after assignment of a case through the issuance of an order for judicial foreclosure, the Contractor shall commence a judicial action to foreclose. Execution of the portion of the order to evict occupants shall be undertaken only when specifically directed by the Contracting Officer as a part of the order or a subsequent order.

Order and review initial Trustee’s Sale/Foreclosure Guarantee from Title Company to assure the Agency’s lien position and that of senior and junior lienholders.

Prepare Complaint for foreclosure, Summon(s) and Notice of Lis Pendens, and any local court pleadings necessary. Where State law permits, all foreclosure sales will be subject to any outstanding prior liens including real estate taxes and assessments; and all foreclosure complaints shall contain a prayer for possession of the property by the purchaser so a separate suit need not be brought to obtain possession.

Forward Complaint to proper Court Clerk for filing and Notice of Lis Pendens to proper County Clerk for recording.

Upon filing of the Complaint and receipt of assigned case number and judge information, forward the Summons to the Clerk of the Court for issuance.

Forward a copy of the Complaint and the Notice of Lis Pendens to the LS once they have been filed/recorded.

Forward a request for a title report update to the title company who issued the initial foreclosure Report.

Prepare Complaint and Summons for service of process and complete service of process pursuant to Colorado Rules of Civil Procedure.

Communicate with debtors, senior lien holders and junior lien holders regarding alternative resolution proposals.

The Contractor is not authorized to obligate the Agency to any alternative resolution proposals. Communicate all proposals to the Agency within 72 hours of receipt. The Agency will provide the Contactor with written instructions and authorization to either reject said offers or consummate said offers. An example would be a short sale request.

Request Judgment figures from LS.

Submit Judgment package, respond to any responses, attend any hearings and conduct any actions necessary to obtain the Judicial Foreclosure Order Judgment.

The Contractor will forward a copy of the Judgment to LS.

Prepare publishing of Notice of Sale on Foreclosure pursuant to the Judgment. The initial date of the sale pursuant to Colorado Revised Statutes in the case of non-agricultural property shall be not less than 110 calendar days after the date of the recording of the lis pendens.

Request the bidding instructions from the Agency. The Contractor is not authorized to bid on behalf of the Agency without written bidding instructions from the Agency. Bidding instructions provided by the Agency will include any funds required to carry out said instructions.

Attend the Sheriff’s Sales and enter the bid on behalf of the Agency.

Report to the Agency within 48 hours of the sale who the successful bidder was and the successful bid. This can be done via the telephone or e-mail.

After any lienholder redemption periods have expired, the Contractor will then provide the Agency with a written report summarizing the Sheriff’s Sale outcome and the original recorded Sheriff’s Deed. Any proceeds due the Agency will be returned to the Agency within 5 working days of receipt by the Contractor.

3.4 DEED IN LIEU OF FORECLOSURE

If requested, apart from a foreclosure sale, the Contractor shall provide services to process a deed in lieu. The Agency will provide contact information for the borrower. The Contractor must obtain the following items from the borrower: (1) a Warranty Deed; (2) Estoppel Affidavit; (3) Form RD 1955-1, Offer to Convey Security; (4) Form RD 1944-3, Budget and/or Financial Statement; and (5) copies of any leases or other documents affecting the title to the property. The borrower must be informed that the deed will not be recorded unless the conveyance is accepted. The Contractor must coordinate with the borrower to vacate the premise, remove all personal property, and leave the home in a clean, habitable condition.

The Contractor must obtain a preliminary title policy to determine if there are any liens which may cloud the title.

Generally, borrowers will be required to satisfy liens and real estate taxes or assessments before conveyance is accepted. However, if the borrower is unwilling to do so, the Contractor shall notify the Point of Contact. The Agency may work with the Contractor to satisfy or settle these debts if it is in the best interest of the Government.

A final title policy will be provided to the Agency showing the United States of America, acting through the Rural Housing Service as the new owner.

A deed in lieu of foreclosure does not automatically release the borrower from liability for any outstanding debt.

The borrower’s account will be credited with the actual net recovery value. If the actual net recovery value does not satisfy the debt, the remaining debt must be debt settled by the Agency’s Customer Servicing Center. The Contractor shall notify the borrower that under a deed in lieu of foreclosure:

Foreclosure action will not be suspended while the offer for a deed in lieu of foreclosure is considered; All costs related to conveyance paid by the Agency will be added to the debt;

A credit equal to the actual net recovery value will be applied to the debt;

If the borrower does not satisfy the debt, the borrower will not automatically be released from liability;

debt settlement may be pursued by the Agency.

3.5 EVICTION/POSSESSION

Execution of the portion of the order to evict occupants shall be undertaken only when specifically directed by the Contracting Officer as a part of the order or a subsequent order. The Agency will notify the Contractor if they are to engage in the eviction process. If the Contractor is to conduct an eviction, they are to prepare all documentation, record, post, mail, publish and serve said documentation in accordance with State law and coordinate with the local Sheriff’s Office and conduct any forcible removal.

The Contractor shall recover physical possession of and secure the collateral, arrange for any occupants to be ejected, arrange for the removal of all person possessions from the property and deliver possession to the Agency in a timely and commercially-reasonable fashion.

The Contractor will notify the Agency once the home is vacant.

3.6 BANKRUPTCY AFTER ASSIGNMENT

The Contractor will be involved with bankruptcy only when the borrower files a petition after foreclosure action is commenced.

The Contractor must immediately advise the Agency when it becomes aware of a bankruptcy on assigned cases and forward bankruptcy filing notifications upon receipt. If the Agency receives notices relative to cases assigned to the Contractor, the Agency will immediately notify the Contractor. If these notifications are made by telephone, the Contractor must follow up in writing.

If a borrower files bankruptcy under Chapter 7 after a case has been assigned to the Contractor for foreclosure, then the Contractor shall keep the foreclosure file open pending final disposition of the bankruptcy proceeding. Final disposition of a Chapter 7 proceeding means notification that the case has been dismissed, that the property has been abandoned, or that the debtor has been discharged. Upon final disposition of the bankruptcy, the Contractor shall continue with the foreclosure.

If a borrower files bankruptcy under Chapter 11, 12 or 13 after a case has been assigned to the Contractor for foreclosure, then the Contractor shall keep the foreclosure file open pending final disposition of the bankruptcy proceeding. Final disposition of a Chapter 11, 12 or 13 proceeding means notification that the case has been dismissed, that the bankruptcy plan (the "Plan") has been confirmed or that the Contractor has obtained relief from the automatic stay.

The Contractor shall continue with the foreclosure if the bankruptcy case is dismissed or the automatic stay has been lifted. However, the foreclosure will be terminated and the case will be reclaimed from the Contractor upon notification that the Plan has been confirmed and proof that the borrower has made at least 3 consecutive post confirmation payments to the Client.

The POC, in its sole discretion, may assign the Contractor a bankruptcy case.

A. In a "Phase I" bankruptcy case, the LS will advise the contractor whether to object to a proposed Plan, petition for lifting of the automatic stay, or request abandonment in order to continue liquidation. The Contractor shall make all filing needed to protect the priority and integrity of the Client's security interest and/or take other action as requested. The Contractor is authorized to represent the Client at hearings and to execute bankruptcy-related documents for the Client. The LS will provide the Contractor with all relevant information including account balances and all other information so the contractor can file the government’s Proof of Claim. A bankruptcy Phase I action is complete when the case is confirmed, dismissed, or the borrower is discharged by the bankruptcy court, or the automatic stay is lifted, or the Client has title to the property.

B. In a "Phase II" bankruptcy case the LS will advise the Contractor when to petition for vacating the automatic stay or to file a Certification of Default under a Consent Order.

The Contractor shall make all filings needed to protect the priority and integrity of the Client's security interest and/or take other action as requested. A Phase II bankruptcy action is complete when a motion to vacate the automatic stay is granted, settled or denied, or when the case is closed or dismissed by the bankruptcy court. Attorney fees shall be paid on completion.

3.7 UNUSUAL SITUATIONS

The Contractor must report all situations that arise outside of the normal process to the Contracting Officer and Agency Loan Specialist within 3 business days after the situation comes to the Contractor’s attention.

SECTION 4: DELIVERABLES

4.1 ACKNOWLEDGEMENT OF ASSIGNED CASES

Within 5 working days after physical acceptance of a borrower case file, the Contractor shall acknowledge receipt as outlined in BPA clause C.4.

4.2 COMMUNICATION

The Contractor shall document all communication with the borrower in writing and provide a copy to the LS.

4.3 STATUS REPORT

The Contractor shall provide a quarterly case status report by the 10th calendar day after completion of the quarter. Reports must include: order number, date of order, name of borrower, loan number, property address, current progress, date of Trustee’s Sale/Foreclosure Guarantee, date Notice of Election and Demand was recorded, date Court grants Order Authorizing Sale, date of sale, time of sale, outcome of sale, and date Confirmation Deed was recorded. Additional information for Eviction/Possession, Bankruptcy, motions for Relief of Stay and Deed in Lieu shall be provided that includes all pertinent dates.

4.4 NOTICE OF ELECTION AND DEMAND

Copy of the recorded Notice of Election and Demand within 10 business days of receipt.

4.5 ORDER OF EVICTION

Copy of Order for Eviction and notice to borrower within 10 business days of receipt.

4.6 RELIEF OF STAY

Copy of Order for Relief of Stay within 15 business days of receipt.

4.7 DEED IN LIEU

Original, recorded Warranty Deed once proof of clear title is obtained.

4.8 CONFIRMATION DEED OR SHERIFF’S DEED

Original, recorded Confirmation Deed within 10 business days of receipt.

SECTION 5: TIME FRAMES FOR COMPLETION

Type of Action Completion Time Frame

Non-judicial Foreclosure Case – Non-bankruptcy1 6 Months ARO Judicial Foreclosure Case – Non-bankruptcy1 6 Months ARO Eviction/Possession 3 Months ARO Deed in Lieu of Foreclosure 4 Months ARO Foreclosure Case – Chapter 7 Bankruptcy - complete Reaffirmation Agreement and Order from Relief

5 Months ARO

Foreclosure Case – Chapter 11, 12, 13 Bankruptcy – obtain Order from Relief

3 Months ARO

ARO = After Receipt of Order

In the event the Borrower files bankruptcy the Contractor must notify the Contracting Officer and the Point of Contact within five business days. The timeframe for completion of the foreclosure will be modified as appropriate.

The judicial foreclosure cases shall be completed within six (6) months from the issuance date of each task order to property sale. If the Contractor is unable to meet the desired delivery schedule for judicial foreclosures, it must provide an alternate schedule for consideration.

SECTION 6: PERFORMANCE ASSESSMENT

The Government will monitor the Contractor’s compliance with the Blanket Purchase Agreement by one hundred percent inspection of output. The Contractor shall be aware that in the absence of any agreement requirement from the Performance Requirements Summary (shown below) does not detract from its enforceability nor limit the rights or remedies of the Government under any other provision of the agreement.

Performance Requirements Summary Requirement Standard Acceptable Quality

Level Timely submission of Quarterly Status Reports

Report delivered by the 10th calendar day after completion of the quarter

90%

Completion of Non-Judicial Foreclosure – Non-Bankruptcy

6 Months ARO 90%

Completion of Judicial Foreclosure – Non-Bankruptcy

6 Months ARO 90%

Eviction/Possession 3 Months ARO 90% Complete Deed in Lieu 4 Months ARO 90% Foreclosure – Obtain Relief from Stay–Chapter 7 Bankruptcy

5 Months ARO 90%

Foreclosure – Obtain Relief from Stay - Chapter 11, 12 or 13 Bankruptcy

3 months ARO 90%

ARO = After Receipt of Order

Exhibit B

DEFINITIONS AND ACRONYMS

A. DEFINITIONS:

Agency. The Rural Housing Service (RHS) within the Rural Development (RD) mission area of the U.S. Department of Agriculture or its successor agency, which administers Section 502 loans and Section 504 loans.

Borrower. A recipient who is indebted under the Section 502 and 504 programs.

Case File. A file established for each loan application to contain all documents used for loan origination and/or loan servicing.

Contracting Officer (CO). A person with authority to enter into, administer, and or terminate agreements, and make related determinations and findings on behalf of the government. Note:

The Contracting Officer is the only individual who can legally bind the government.

Contractor. A private attorney or law firm operating under this agreement to provide specific supplies or service to the government. The term used in this agreement refers to the prime contractor.

Deed in Lieu of Foreclosure. A method of liquidation by which title to the security property is conveyed to the Agency by the borrower.

Defective Service. A service output that does not meet the standard of performance associated with the Agreement.

Deliverable. Anything that can be physically delivered, but may include non-manufactured things such as meeting minutes or reports.

Housing Director. Individual with the overall leadership providing direction for Housing Programs within the State.

Loan Specialist (LS). An employee of the U.S. Government who acts as the Contracting Officer’s point of contact for technical matters, providing technical direction and discussion as necessary with respect to the specification or statement of work, and monitoring the progress and quality of contractor performance. This individual has authority to provide technical direction to the Firm as long as that direction is within the scope of the agreement, does not constitute a change, and has no funding implications. This individual does NOT have authority to change the terms and conditions of the agreement.

Quality Control. All necessary measures taken by the Contractor to assure that the quality of an end product or service shall meet agreement requirements.

Subcontractor. One that enters into an agreement with a prime contractor. The Government does not have privity of agreement with the subcontractor. Performance of work by subcontractors in accordance with the agreement requirements is the responsibility of the Prime Contractor.

B. ACRONYMS:

AGAR Agriculture Federal Acquisition Regulation ARO After Receipt of Order CFR Code of Federal Regulations CO Contracting Officer CPM Contract Program Manager FAR Federal Acquisition Regulation HUD U.S. Department of Housing and Urban Development LS Point of Contact PRS Performance Requirements Summary QC Quality Control RD Rural Development RHS Rural Housing Service SFHS Single Family Housing Staff USC United States Code.

USDA United Stated Department of Agriculture.

LS Loan Specialist