HUDs_Industry_Day_2013_5-10-13.pdf

U.S. Department of Housing and Urban Development (HUD)

The Office of the Chief Procurement Officer

Community Service/Multi-Family Housing Support Division

WELCOME !!!

Brooke Mondale Auditorium Suite A&B

May 1, 2013

8:00 a.m. - 3:00 p.m.

Introduction

Brenda K. Lee, Contracting Officer

Remarks

Keith Surber, Deputy Chief Procurement Officer

Remarks Maurice A. Jones,Deputy

Secretary

Requirement Overview

Danny Golden, Division Director of Community Service/Multi-Family

Housing Support Division

Purpose of Industry Day

Exchanging information with Industry;

To improve the understanding of Government;

requirements and industry capabilities

Allowing potential offerors to judge whether or how they can satisfy the Government’s requirements

Purpose of Industry Day

Enhancing the Government’s ability to obtain quality supplies and services, at reasonable prices, and increase efficiency;

To obtain price, delivery, other market information, or capabilities for planning purposes.

Multifamily Mortgage Loan Servicing

BY

Deborah Coutright, OCFO

Multifamily HUD-Held Notes Servicing HUD Code of Federal Regulations (CFR) Title 24 Parts 200 – 499 and legal instruments for each note

Establish note in the portfolio Prepare initial billing statement and monthly billings thereafter

Adjustments in accordance with insurance claim settlement

Collections through Treasury lockbox and application of payments per business rules and special provisions

Disbursements by Treasury delegation:

Taxes, reserve releases, foreclosure expenses, insurance where applicable

Minority Bank Investment Program

Processing of forms HUD-9250 (releases and changes to the reserve for replacement and miscellaneous escrow accounts)

Track, file and maintain UCCs (Uniform Commercial Code) by State requirements

Providing financial data and reports for financial transactions, i.e., payoffs, foreclosures, asset sales, bankruptcies

Maintain historical data (mortgage history) of all transactions on active and inactive (6yrs. 3 mos.)

Providing financial data and reports for financial transactions, i.e., payoffs, foreclosures, asset sales, bankruptcies

Maintain historical data (mortgage history) of all transactions on active and inactive (6yrs. 3 mos.)

continued.

continued

Maintain subsidy data for the Section 236 Interest Reduction Payments (IRP) and apply against monthly billings

Provide data quarterly to credit bureaus

Scan all documentation on notes inventory

Legal instrument storage (secured, locked and fireproof area and ability to retrieve on 24 hour notice)

Other: correspondence; inquiry response; expert witnesses; customer help desk; data transmission

Provide HUD servicing staff access to all data for response to inquiries and for oversight of service provider

Other: correspondence; inquiry response; expert witnesses; customer help desk; data transmission

Provide HUD servicing staff access to all data for response to inquiries and for oversight of service provider

By

Beverly Rudman, OAHP

Overview of OAHP’s Mark to Market Program

Explanation and number of the Notes to be serviced by the contractor. Demo notes and Mark-to-Market notes. No more than two Mark-to-market notes arise from a mark-to-market transaction, and one clearly follows the other in lien position and in application of payments. Things are more complicated with the notes that arose from the demo program. There can be multiple notes per property, and payment application may require exceptions processing.

Overview of the Mark-to-Market Program

Cash Flow Notes to be serviced: M2M, Demo, others

Surplus Cash calculated payments Need to exchange data files with HUD or with HUD service provider

Two cycles for billing: after financial statement and after surplus cash analysis

Description of initial loan set-up process

Need to accommodate ownership changes: two owners in a single year and two payment amounts due in a single year

Need HUD staff access to current and historical note terms and conditions, payment information, and legal documents

Questions and Answers

202/811 Direct Loan UCC Filing, Set up & Maintenance

Gregory Karns. HSNG

The Contractor must track UCC (Uniform Commercial Code) filings for each loan in the HUD-held portfolio, as well as for the 202/811 requirements. In addition to the 2,802 mortgage notes, there are approximately 3,262 Direct Loans the Contractor must track. The tracking system shall include a listing of all UCC financing statements filed, including

Copies of the original financing statement, form UCC-1, and copies of any Amendments, Continuations, Assignment and Terminations, (form UCC-2 or UCC-3 as appropriate).

The date and location of filing and filing reference number, book, page, etc. according to the specific jurisdiction.

Copies of the original financing statement, form UCC-1, and copies of any Amendments, Continuations, Assignment and Terminations, (form UCC-2 or UCC-3 as appropriate).

The date and location of filing and filing reference number, book, page, etc. according to the specific jurisdiction.

The debtor name and address, the secured party name and address.

The status of each UCC financing statement (i.e., current or lapsed).

The date and location for filing UCC continuation statements pursuant to revised Article 9 of the Uniform Commercial Code to avoid a lapse of current UCC financing statements.

The expiration date of each financing statement.

For the initial setup of the Section 202/811 Direct Loan UCC files the Contractor must review existing HUD records to:

Record information on existing UCC filings and develop an electronic database to manage UCC filings and updates.

Notify HUD when it is not in first position.

Pay invoices for filing and other related State and county services.

Scan and maintain UCC documents as PDF files.

Provide status reports to HUD quarterly.

Determine where and schedule UCC filings needed to be made to establish HUD’s security interest or extend it.

File the needed UCCs including Financing Statements, Amendments, Continuations, and Information Requests as needed, along with the associated documentation.

Property Requirement

Gregory Karns. HSNG

The Contractor provides the following specific functions to support the tracking and monitoring of the management and sale of HUD’s Multifamily Property Disposition Portfolio:

Provide an accounts payable system by project in sufficient detail to fully support all outstanding bills.

Property Requirement continued.

Process properly authorized and approved invoices.

Comply with the Prompt Payment Act, Public Law 97-177, including computation, payment and monthly reporting on the amount of penalties under the Act.

Provide adequate internal control over disbursements.

Maintain information on all vendors and allow flexibility for subsequent adjustments to the information required.

Process properly authorized and approved invoices.

Comply with the Prompt Payment Act, Public Law 97- 177, including computation, payment and monthly reporting on the amount of penalties under the Act.

Property Requirement continued

Provide adequate internal control over disbursements.

Maintain information on all vendors and allow flexibility for subsequent adjustments to the information required.

Maintain information on all vendors and allow flexibility for subsequent adjustments to the information required.

Maintain all accounting records of multifamily project operations in accordance with HUD requirements, Federal Generally Accepted Accounting Principles, and Credit Reform.

Provide complete and comprehensive project accounting information using the accrual method of accounting. .

Maintain an annual Operating and Rehabilitation Budget of HUD-owned and Mortgagee-in-Possession (MIP) projects.

Perform monthly reconciliation to verify all account balances.

Provide on-line access to all transaction history data from the commencement date of the contract to expiration of the contract.

Produce a monthly trial balance for each project by the third working day of each month.

Update accounting records to reflect collections and payables.

Ensure that the contract Property Manager maintains project employee payroll related information and reimburse the contract Property Manager for authorized wages, expenses and fringe benefits.

Provide on line general purpose management reports, annual reports and project pipeline reports and inventory reports (a listing of required reports will be made available).

Provide special reports for section 202 loans section 312 loans, or other direct loans.

Maintain a database for tracking properties through the foreclosure process.

Maintain a database or tenants of all occupied units in HUD-owned and Mortgagee-In-Possession (MIP) properties.

Carol Britton, OFAR

Accounting records must be maintained for all HUD-owned Multifamily Note and Property assets and MIP activity

Accounting records must be auditable and provide full disclosure of each projects financial condition

Transactions shall be recorded on all HUD-owned MF Notes/Property Assets and

Mortgagee In Possession (MIP) financial activity

All transactions shall be posted IAW government regulations:

Federal Generally Accepted Accounting Principles

Credit Reform Act of 1990

United States Standard General Ledger (USSGL) chart of accounts

Accrual based, double entry, accounting

Include crosswalk to proprietary and budgetary accounts

Associated Cohort and Section of the Act (SOA)

Accounting transaction must include specified chartfields

◦ FHA Project Number

◦ Entry Event

◦ USSGL account number

◦ Accounting area designator

◦ Accounting Period/Fiscal Year

◦ Activity Type

◦ Insurance Fund

◦ Cohort and Program code (SOA)

◦ Amount

Basic Reporting Requirements (project level) (for Notes & Property unless otherwise indicated):

◦ Monthly & Cumulative Trial Balance Reports (includes beginning balances, gross activities, and ending balances)

◦ Detailed Transaction Reports

◦ Acquisition costs and capitalized income and expenses on Property

Assets

◦ New Note assignments

◦ Accounts Receivables and Payables

◦ Treasury Report on Receivables/Aged Delinquency Report

◦ Contracts Reconciliation Reports

◦ Assets Sales Related Reports

◦ Investments of owner’s funds

◦ Periodic and adhoc financial Reports, as requested

Service Provider must be able to record and track accounting data for MF Notes and Property program areas separately

Service Provider must be able to provide independent accounting data and financial reports for each program area

Daily cash posting and reconciliation

Contractor must be able to collect, disburse, and reconcile funds processed through bank lockbox, Federal Wires, Intra-Governmental Payments and Collections (IPACs), ACH, EFT and/or Pay.gov, daily

Maintain, track and reconcile HUD servicing support contracts

Basic Reporting Requirements (project level) (for Notes & Property unless otherwise indicated):

◦ Monthly & Cumulative Trial Balance Reports (includes beginning balances, gross activities, and ending balances)

◦ Detailed Transaction Reports

◦ Acquisition costs and capitalized income and expenses on Property Assets

◦ New Note assignments

◦ Accounts Receivables and Payables

◦ Accounts Receivables and Payables

◦ Treasury Report on Receivables/Aged Delinquency Report

◦ Contracts Reconciliation Reports

◦ Assets Sales Related Reports

◦ Investments of owner’s funds

◦ Periodic and adhoc financial Reports, as requested

Must adhere to following guidance:

◦ AICPA Statement of Standards for Attestation Engagements (SSAE 16) “Report on Controls at a Servicing Organization

◦ Federal Manager’s Financial Integrity Act PL 97-255

◦ OMB Circular A-11 Budget Preparation, Submission and Execution

◦ OMB Circulars A-123, Management Responsibility for

Internal Control

◦ OMB Circular A-127 Federal Management Systems

◦ Participation in HUD annual external Financial Statement audit

◦ Any other mandatory Legislation

◦ Questions and Answers

George Eakins

Use professional Database Management tools that are aligned with those identified within HUD’s Technical Reference Model.

Comply with accessibility requirements as specified in Section 508 of the Rehabilitation Act of 1973. www.access-board.gov/sec508/standards.htm

Multifamily Housing Data is owned by HUD.

Data elements and storage records are to be documented in a dictionary.

Data is secured and backed up nightly.

http://www.access-board.gov/sec508/standards.htm http://www.access-board.gov/sec508/standards.htm

Provide Disaster Recovery and Continuity of Operations Services

Infrastructure backup.

Configuration Management for hardware and software.

Scheduling releases with advanced notification to HUD’s Multifamily Housing client.

Employ access authentication and user management. User management is to include recertification of needed software access.

System access between 7:00 am – 9:00 pm ET.

Transition to either HUD or designated support contractors at contract end.

Transition Plan.

Fully staff the transition of data and provide related documentation artifacts to HUD or the HUD CO’s designee.

Transition meetings between the service provider and HUD representatives will be held at HUD.

The service provider shall coordinate the Execution of the Transition Plan.

Employ a documented and mature software development framework.

This includes:

◦ Governance of new functional initiatives.

◦ Policy and Process for Development tool usage.

◦ IT policy directives within the service provider’s organization.

◦ Employing template-driven documentation standards and tools for status reporting against a project plan, lifecycle phase control, and software release.

Transition meetings between the service provider and HUD representatives will be held at HUD.

The service provider shall coordinate the Execution of the Transition Plan.

Employing a documented and mature software development framework. This includes:

◦ Governance of new functional initiatives.

◦ Policy and Process for Development tool usage.

◦ IT policy directives within the service provider’s organization.

◦ Employing template-driven documentation standards and tools for status reporting against a project plan, lifecycle phase control, and software release.

Federal Information Security Management Act – protect information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction in order to provide Integrity, Confidentiality, and Availability.

FISMA legislation is focused on contractor services that control business processes that oversee Federal Assets.

Per FISMA, NIST is responsible for developing standards, guidelines, and associated methods and techniques for providing adequate information security for all agency operations and assets.

Special Publications:

◦ 800-63: Electronic Authentication.

◦ 800-53: Recommended Security Controls for Federal

Information Systems.

◦ 800-37: Certification and Accreditation of Federal

Information Systems.

◦ 800-30: Risk Management Guide for IT Systems.

◦ 800-18: Security Plan.

◦ 800-16: Security Training.

FIPS 199 and 200 are mandatory federal standards developed by NIST in response to FISMA

Federal Information Processing Standard (FIPS).

FIPS 199: establishes security categories of information systems -- mandatory security standards as required by Federal Information Security Management Act (FISMA).

Requires Federal agencies to assess their information systems in each of the categories of Confidentiality, Integrity and Availability, rating each system as low, moderate or high impact in each category. The most severe rating from any category becomes the information system's overall security categorization.

http://csrc.nist.gov/publications/fips/fips200/FIPS-200-final-march.pdf

FIPS 200 -- Minimum Security Requirements for Federal Information, and Information Systems – specifies a risk-based process for selecting security controls.

Based on the tailoring guidance provided in NIST Special Publication 800-53 (recommended Security controls for Federal Information Systems)

The resulting set of security controls must be documented in the security plan for the information system.

http://csrc.nist.gov/publications/fips/fips200/FIPS-200-final-march.pdf http://csrc.nist.gov/publications/fips/fips200/FIPS-200-final-march.pdf

Access control Awareness and training Audit and accountability Certification, accreditation and security assessments Configuration management Contingency planning Identification and authentication Incident response Maintenance

Media protection Physical and environmental protection Planning Personnel security Risk assessment Systems and services acquisition System and communications protection System and information integrity www.hud.gov Menu ribbon at top: Select, “Resources” Dropdown: Select, “Handbooks, Forms, Publications” Select, “Access HUDCLIPS” Select, “Handbooks” link on left side Select, “Chief Information Officer Handbooks”

◦ Handbook 3252.1 Software Configuration Management Policy

◦ Handbook 3255.1 Enterprise Architecture Policy

◦ Handbook 3200.1 Enterprise Data Management Policy

◦ Handbook 3415.1 IT Governance Policy

◦ Handbook 3400.1 IT Management Framework Policy

◦ Handbook 3425.1 IT Strategic Planning Policy

◦ Handbook 2400.25 IT Security Handbook

◦ Handbook 3410.1 Project Planning and Management Policy http://www.hud.gov/

Question and Answers

Rules of Engagement

The Government will consolidate all written questions received and post the “official” answers to FedBizOpps.

All capability statement shall be email to : brenda.k.lee@hud.gov no later than May 8, 2013 by 4:00 p.m. EST.

All communications are limited to the Contracting Officer only!!!

mailto:brenda.k.lee@hud.gov

QUESTIONS

THE END