Request_for_Information_-_07-21-15.pdf

THIS IS NOT A REQUEST FOR PROPOSAL

THIS IS A REQUEST FOR INFORMATION (RFI) ONLY.

The U.S. Department of Agriculture (Rural Development) is performing market research to identify potential vendors that have the software and extensive experience in providing loan/grant applications and loan servicing for the Rural Development single family housing direct portfolio. Rural Development provides insured loans to low and moderate income applicants located in rural geographic areas to assist them in obtaining decent, sanitary, and safe dwellings. Rural Development currently maintains a portfolio of approximately 327,000 single family housing borrowers located in each of the 50 states and United State territories.

Approximately 7,000 new loans are established each year and 12,000 loans are paid off each year.

Rural Development currently processes loan originations through approximately 550 field offices. The primary loan servicing is provided by the Centralized Servicing Center in St. Louis, Missouri. The financial reporting is provided by the National Financial and Accounting Operations Center also located in St. Louis, Missouri.

Rural Development currently utilizes Fiserv commercial off-the-shelf (COTS) products for the loan origination and loan servicing of the single family housing direct portfolio. The loan origination system, UniFi, is the COTS application system, and LoanServ is the COTS servicing system. UniFi is a server-based system hosted in Kansas City, Missouri, by the USDA, Client Technology Services. LoanServ is a mainframe system hosted in Kansas City by the USDA, National Information Technology Center.

The Agency supports multiple loan programs for direct single family lending with the Section 502 and Section 504 programs. Under the Section 502 program, there are funds for fixed rate mortgages to be used to purchase housing. Loans are made to purchase existing property or to purchase land and construct a single family dwelling. In certain situations, the Section 502 program can be used for repair and rehabilitation. Under the Section 504 program, the program provides funds for home improvement loans that are secured and unsecured. There are also credit sale loans that are used for the purpose of financing the sale of property acquired through either the foreclosure process or by voluntary conveyance. In addition to loans, the system must support grants. These funds are disbursed to individuals and are not subject to repayment. The grants carry an interest rate of zero percent. Individuals that qualify under the Section 504 grant program are subject to a $7,500 life time limit, but the Government has the ability to change this limit. Individuals that qualify under the Section 504 loan program are subject to a $20,000 life time limit.

The origination system must track and identify the specific status of all loan applications received by the Rural Development field offices. Rural Development averages more than 30,000 applications every year. The origination application begins at initial pre-qualification (determination of whether the applicant meets Rural Development guidelines). The loan origination system will be required to support the field office staff in the processing of loans from application through closing or until the application is withdrawn or rejected. The origination system must have the ability to identify whether a borrower is eligible for the program based on location of the proposed property and the income level limits in that area. In addition to the ability to track the status of the application, the origination system must allow for online entry of data and automated data entry, enable management to review applications in process online to ensure that the applications conform to Agency guidelines, generate Rural Development forms and loans documents, and produce reports that can be tailored to unique Agency guidelines. Interfaces to the origination system must include the credit bureau vendor, the loan servicing system, and automated underwriting. The origination system must include defined edits, security levels, user-defined forms, and data calculation routines. The origination system must provide the ability to request and track the receipt of credit bureau reports. Data from the credit bureau report must be parsed and updated to the appropriate application data fields to be used for automated underwriting. The origination system must be able to compute if an applicant is eligible for either Interest Credit Assistance and, in certain situations, also qualifies for the Deferred Mortgage Assistance Program. This assistance is based upon the applicant’s income level, family composition, and the median income level of the county where the property is located. The origination system must also allow for the processing of construction loans that convert to a permanent loan.

The loan servicing system must have many common and unique features for the servicing of the single family housing direct portfolio.

The common servicing functions required for the servicing system include, but are not limited to, the following:

1. The system shall provide the capability to handle loans that are non-escrowed and escrowed loans. The escrowed loans shall interface to a tax service vendor for servicing.

2. The system shall provide the capability to manage the tracking and payment of real estate taxes on a nationwide portfolio of approximately 305,000 active accounts. There are approximately 180,000 accounts that are currently escrowed.

3. The system shall interface with Rural Development’s general ledger system.

4. The system shall provide the capability to interface with a forced-placed insurance vendor. This interface will allow Rural Development to report loans for which coverage has lapsed.

5. The system shall have the ability to interface with insurance carriers who have automated their renewal and cancellation process.

6. The system shall have the ability to utilize lockbox contractors who service the portfolio.

These operations deposit all funds received and transmitted on a daily basis for processing.

7. The system shall automatically present a borrower’s account to Rural Development staff when an automated dialer is utilized.

8. The system must be able to support the scheduled amortized method of interest calculation and the daily simple interest method.

9. The system shall provide the capability to process loan reamortizations that either extend the loan repayment to the maximum authorized repayment or rearrange the payments within the remaining years of the original repayment period.

10. The system shall provide the capability to establish payment moratoriums that allow the borrowers to suspend principal and interest payments for a period of up to 2 years.

11. The system must be able to support a payment application hierarchy that includes recoverable costs, interest, principal, escrow, late charges, and fees. Payment application must allow payment to distribute between single and multiple loan borrowers.

12. The system shall provide the capability to assess late charges on a monthly principal and interest payment not received by the due date based on state regulations.

13. The system shall provide the capability to track and manage bankruptcies and foreclosures.

14. The system shall provide the capability to track and manage real estate owned (REO) properties, along with the ability to calculate the profit and loss associated with each REO property.

15. The system shall provide the capability to adjust a borrower’s effective interest rate as required under the Soldiers’ and Sailors’ Civil Relief Act. Under this regulation, the rate charged to a borrower who enters full-time active military after a loan is closed will not exceed 6 percent.

16. The system shall provide the capability to establish a judgment account for an authorized amount. The system shall also provide the capability to uniquely identify the judgment account, the type of judgment account, and allow for multiple judgment accounts under one borrower identification number.

17. The system shall provide the capability to capture, store, and report on coborrower data in addition to the primary and secondary borrowers. If a coborrower is included on a promissory note, the system is required to capture and maintain the social security number for the Internal Revenue Service and credit bureau reporting.

18. The system shall provide the capability to generate management and financial reporting.

19. The system shall provide the capability to support fiscal yearend and calendar yearend business processes and reporting.

20. The system shall provide the capability to interface with the Rural Development imaging system with workflows.

21. The system shall provide the capability to produce servicing letters, both online and batch, and notate the servicing system through history which letters have been generated on a borrower account. The system shall provide the capability to interface with the Rural Development automated mail processing system.

The unique servicing functions required for the servicing system include, but are not limited to, the following:

1. The system shall provide the capability to support the Credit Reform Act of 1990, which requires all Treasury borrowings to be tied to cash disbursements and borrower repayments in order to accrue interest on a borrower’s loan obligation. System must provide appropriate data required to the cash tracking system on a daily basis to track borrower receipts and disbursements and to record daily cash balances by treasury symbol, effective date, cohort, and fiscal year. A cohort is defined as a group of loan obligations committed by a program in a particular fiscal year at similar rates and terms.

2. The system shall provide the capability to interface with the National Finance Center and the Program Funds Control System (PFCS) (Rural Development appropriation system) when checks are required for loan funding and construction disbursement.

3. The system shall provide the capability to establish and maintain a delinquency workout agreement. A delinquency workout agreement provides rural housing borrowers who require more than 4 months to repay a delinquency with the opportunity to bring past due loans current.

4. The system shall provide the capability to recapture assistance granted to borrowers in the form of interest credit, subsidy, or deferred mortgage payment assistance.

5. The system shall provide the capability to classify Rural Development loans and report on them as required by the Office of Management and Budget (OMB).

6. The system shall provide the capability to interface with the following Rural Development automated systems:

a. Program Funds Control System (Appropriation System)

b. General Ledger System

c. National Finance Center

d. Tabular Data Warehouse

e. Automated Mail Processing

Interfaces shall also be provided to communicate between the system and the following entities external to Rural Development’s automated systems.

a. U.S. Department of Treasury

b. Interest Revenue Service

c. Department of Housing and Urban Development

d. Lockbox Banks

e. Tax Service Vendors

f. Major Insurance Vendors

g. Forced-Placed Insurance Carriers

h. Credit Bureaus

7. The system shall provide the capability for Rural Development borrowers to obtain account information through an automated voice response unit.

8. The system shall provide the capability to generate, on a monthly basis, a file reflecting delinquent single family housing borrowers to be reported to the Department of Housing and Urban Development (HUD).

9. The system shall use the Rural Development Chart of General Ledger Accounts to meet the posting requirements for the Single Family Housing Program.

10. The system shall provide the capability to support the Treasury Offset Program to be in compliance with the Debt Collection Improvement Act of 1996. This also includes the cross-servicing program.

11. The system shall provide the capability to capture, maintain, and report on data required to operate the Interest Credit Program. This assistance is based upon the borrower’s income level, family composition, and the median income level of the county where the property is located.

12. The system shall provide the capability to capture, maintain, and report on data required to operate the Deferred Mortgage Program. The Deferred Mortgage Program was established in 1990 to expand home ownership opportunities to rural residents with very low income. Deferred mortgage assistance is provided to borrowers as a monthly credit against the loan account to defer a portion of the borrower’s installment for a period up to 15 years. Qualified borrowers receiving deferred mortgage assistance also receive interest credit assistance.

13. The system shall provide the capability to report on active single family housing borrowers to be considered for graduation. Borrower graduation is defined as payment in full of the insured loan before maturity by refinancing with other credit sources. Rural Development loans are a temporary source of credit and borrowers will be requested to refinance their loans with other lenders when credit is available at reasonable rates and terms.

14. The system shall provide the capability to create employee defalcation accounts. A defalcation account is established for debts owed the Federal government by Federal employees due to theft, embezzlement, fraud, or negligence that resulted in misappropriation of borrower funds.

15. The system shall include a Median Income Table reflecting the median income level for each state and county serviced by Rural Development. The income levels are updated at least annually.

16. The system shall include functionality for subsidy payments that are system-generated as non-cash credits when a full note payment is received after the effective date on the interest credit agreement and ending on the expiration.

17. The system shall provide the capability to process cost items and support the process which is used to obligate, disburse, and report expenses directly associated with the support of loans programs and portfolio management.

Vendors must be able to interface with USDA, Rural Development, electronically through automated methods.

Vendor must be able to adhere to the standards under Section 508 of the Rehabilitation Act of 1973.

RFI REQUIREMENTS: All written responses are requested to be limited to 10 pages (letter size) in length, single-spaced, 12 point font minimum. Responding vendors shall submit capability statements that demonstrate the skills and extensive experience in providing loan origination and loan servicing that can accommodate the unique servicing requirements.

Additionally, interested sources must include a two-page company profile to include Small Business Administration (SBA) business size classification, number of employees, Cage Code, DUN's number, customer base and a description of the company's prior relevant experience and a summary of past performance information for contracts awarded. Interested sources should also provide a point of contact who can discuss the material submitted.

Affirmative responses to this notice must indicate your business size and type under the NAICS code 522310 and 511210 and indicate whether your firm is capable of performing the services in one or more of the identified areas. Respondents who are not capable of performing all services, or may only be capable of partially servicing one or more of the identified areas, must indicate any performance constraints or limited service areas as part of their response. For instance, if there is a limitation, it needs to be specified.

Vendors shall e-mail your responses to this sources sought notice to the primary POC email, sourcessought@wdc.usda.gov, by July 31, 2015, at 5 p.m. EST. Scanned email attachments must be in Adobe PDF, MS Word, or a recognizable image format, such as JPEG.