Attachment_1_PWS.pdf

ATTACHMENT 1

PERFORMANCE WORK STATEMENT

Turnkey Nationwide Appraisal Services & Related Technical Support Services

1.0 OVERVIEW

The United States Department of Agriculture (USDA), Rural Development (RD), Centralized Servicing Center (CSC), Default Management Branch, intends to procure contractor provided services for the purpose of:

Providing nationwide appraisal services and related technical support and to provide written reports for estimates of opinions of market value and/or liquidation values for single family homes and some vacant lots in rural areas. The function of the appraisal reports will be to determine and report to the USDA the value of single family properties based on one of three value types and definitions to be communicated in each individual assignment engagement; (Market Value, Disposition Value, or Liquidation Value.

EXPERT WITNESS TESTIMONY: If required, the Contractor shall defend the appraisal in court or in the Rural Development appeals process. In the event the contractor is requested by Rural Development to present testimony at any hearing or legal proceeding, the contractor agrees to perform such services for an hourly rate which is as low as or lower than the rate offered to the contractor’s most favored customer, plus “reasonable” reimbursement for transportation, lodging, and meals.

(“Reasonable” is defined as that rate applicable to government personnel as defined in the travel regulations of the agency.)

2.0 BACKGROUND

The United States Department of Agriculture (USDA), Rural Development (hereby referred to as RD) provides support and services that improve the quality of life in rural communities. RD programs help rural communities build or improve housing, community facilities, and extend utilities, including water, electricity, and telecommunications services. RD programs also create jobs by funding the growth and creation of rural businesses and cooperatives. RD provides assistance through direct or guaranteed loans, grants, technical assistance, research, and educational materials.

Rural Development provides loans to low and moderate income applicants located in rural geographic areas to assist them in obtaining single family housing through multiple programs. A limited number are larger than one acre of land with the home. The Single Family Housing Direct loans are located in each of the 50 states and U.S. territories that include Puerto Rico, Guam (and its Islands) and the Virgin Islands.

RD currently maintains a portfolio of approximately 265,000 single family housing borrowers located in the 50 states and United States territories, in addition to approximately 1,500 real estate owned properties and 20,000 recapture receivables.

The Agency processes loan originations and limited servicing functions through approximately 550 field offices. The Centralized Servicing Center, located in St. Louis, Missouri, provides full servicing of the loan portfolio from the point of obligation to final payoff or settlement. USDA currently processes all loan originations through State Offices and approximately 550 Field Offices. The Centralized Servicing Center (CSC), located in St. Louis, Missouri provides support to the field offices for loan originations and is responsible for most servicing functions.

The focus of the Centralized Servicing Center (CSC), Default Management Branch is to minimize risk to the Federal Government and taxpayer. It is further designed to reduce the cost associated with servicing defaulted customers. The Foreclosure and REO portfolios are currently serviced in a “mixed servicing” environment. Approximately 60% of the states are serviced by CSC with the remainder being serviced throughout the country by the State and/or Field Offices.

USDA is currently utilizing the LoanServ Servicing System (formerly known as MortgageServ). It was implemented in February 1997 on a mainframe computer system located at USDA’s National Information Technology Center (NITC) in Kansas City, Missouri. The operating system is z/OS 2.1 and Customer Information Control System (CICS) is Version 4.1. The loan servicing system was developed by Fiserv (formerly Data-Link, Incorporated) and has been significantly modified to meet the unique servicing requirements of RD direct single family housing loan programs. Appraisals can be submitted, but are not required to be submitted via Fiserv. Use of the Fiserv system will require an Interconnection Security Agreement and/or Memorandum of Understanding (MOU), as defined in the National Institute of Standards and Technology 800-47, Security Guide for Interconnecting Information Technology Systems. Review of the ISA/MOU must be performed annually or whenever a significant change occurs to ensure they are operating properly and are providing appropriate levels of protection.

Documentation of the completion of the review is required. Any amendments to the interconnection service agreement will be coordinated through the appropriate approval authorities for each organization.

3.0 OBJECTIVE

To support this program, USDA Rural Development, Centralized Servicing Center, Default Management Branch requires the services of qualified persons or firms to provide appraisal services, in accordance with Title 7 Code of Federal Regulations (CFR) Part 3550 and Handbook-1-3550, Chapter 5, Section 5 “Appraisals” which may be located at: http://www.rurdev.usda.gov/Handbooks.html or http://www.rurdev.usda.gov/SupportDocuments .

USDA, RD, Centralized Servicing Center (CSC), Default Management Branch has a requirement for NATIONWIDE APPRAISAL SERVICES and TECHNICAL SUPPORT for foreclosure activities and USDA Real Estate Owned (REO) properties. The requirement is for the procurement of Nationwide Appraisals Services for USDA, Rural Development (RD), CSC, Default Management Branch, to be national in scope, supporting an RD portfolio that is located in all 50 states. Inventory would include single family homes and vacant lots located in rural communities. Current data indicates appraisal service requirement for approximately 200-500 properties per month nationwide with the greatest volume of appraisal services needed in the rural areas of Alabama, Georgia, Kentucky and North Carolina.

The contractor shall meet the following minimum qualifications in order to meet the servicing criteria:

• Have a minimum of five (5) years experience in Real Estate Property Appraisals;

• Service or have serviced more than one client with a minimum of 50,000 customers;

• Service more than one client with MortgageServ using the standard or custom default programs with electronic interface and reporting; and

• Must use automated interfaces with USDA

• Vendor will not utilize overseas or foreign operations to complete work

NOTE TO QUOTERS: Quoter’s should indicate ability to handle appraisal services and the ability to provide appraisal services on a nationwide portfolio with and without subcontracting. Award of a Agreement does not guarantee the Contractor any minimum number of accounts during the term of this contract, although an estimate of the number of accounts is provided.

4.0 REQUIREMENTS

4.1 Unusual Situations: The Contactor must report all situations that arise outside of the normal process to the Contracting Officer’s Representative or designee within 3 calendar days after the situation comes to the Contractors attention.

4.2 Delays. In the event that a situation arises that will prevent timely completion, the Contractor must notify the Contracting Officer’s Representative or designee within 5 business days of becoming aware of the delay. The following delays shall be considered as no fault of the contractor. The time frame of completion may be adjusted accordingly when such action occurs.

Natural disaster which has caused substantial and immediate damage to entire area

5.0 DELIVERABLES

5.1 Acknowledgement of Assigned Cases. Within 3 working days after physical acceptance of a borrower case file, the contractor shall acknowledge receipt by written memorandum to the Contracting Officers Representative (COR) with a courtesy copy to the Contracting Officer (CO). A single memorandum may acknowledge receipt of multiple cases. Memorandums may be delivered via e-mail or electronic system.

5.2 Communication. The contractor shall document all communication with the borrower in writing and provide a copy to the Contracting Officer’s Representative.

5.3 Expected Timeframes.

Appraisal assignments will be classified in one timeframe categor at the time of engagement;

Standard: Standard timeframe appraisal assignment requests will be completed and delivered within 14 business days of the appraisal order being received.

6.0 APPRAISALS

General Information and Requirements for Real Property Appraisals

6.1 Client and Intended Users

The United States Department of Agriculture (USDA), Rural Development Agency is the client and only intended user.

6.2 Purpose

For determining and reporting to the USDA the value of single family properties based on one of three value types and definitions to be communicated in each individual assignment engagement; (Market Value, Disposition Value, or Liquidation Value).

6.3 Intended Use

The intended use of the appraisal is to assist the USDA in their evaluation of lending origination, inventory property, and existing loan servicing.

6.4 Requirements for Appraisers

All real property appraisers performing appraisals under this program shall be either State Certified Residential or State Certified General licensed appraisers in the state where the subject property is located and be in good standing with the licensing authority where the credential was issued, in conformance with Title XI of the Financial Institution’s Reform, Recovery and Enforcement Act of 1989

(FIRREA).

6.5 Standards

All appraisals must comply with the most current edition of the Uniform Standards of Professional Appraisal Practice, USDA Rural Development appraisal requirements per regulation and policy as set fourth from time to time, and any and all assignment condition requirements of the United States Department of Agriculture, Rural Development.

6.6 Types and Definitions of Value for Appraisal Assignments

The type of value identified by the USDA including its corresponding definition will be conveyed for each specific appraisal assignment. Types of value requested by the client may include but not be limited to; Market Value, Disposition Value, or Liquidation Value.

6.7 Property Access and Observation

All loan origination, recapture, and Inventory/vacant property appraisal assignments will require an interior inspection. For all assignments pertaining to existing loan servicing, a reasonable business effort must be made by the appraiser to gain access and observe the subject property, including the interior of the improvements. If the appraiser is unable to gain permissive access to the subject property and improvements, USDA may allow the assignment to be converted to an Exterior-Only Inspection Residential Appraisal. USDA requires that the appraiser’s reasonable efforts to gain access be documented in the appraisal report.

6.8 Extraordinary Assumptions for Exterior Only Appraisal Assignments

Only after a reasonable business effort to obtain interior access has been made and documented by the appraiser, the USDA requires as an assignment condition that in the absence of an interior inspection of the subject’s improvements, the appraiser uses the Extraordinary Assumption that the interior condition of subject's improvements is consistent with the exterior condition as observed by the appraiser. All extraordinary assumptions must be clearly stated in the appraisal report. If any other factual evidence is found by the appraiser to contradict this assumption, without the benefit of a complete interior inspection, the appraiser must document the evidence as well as its source in the appraisal report and use the appropriate condition rating that ensures a credible opinion of value.

6.9 Appraiser Independence

The appraiser engaged for the assignment shall develop and report an independent opinion of value. No party shall attempt to influence the results, opinions, or conclusions of the appraiser.

6.10 Delivery of Real Property Appraisal Reports

Completed appraisal reports shall be delivered electronically in a digitally signed and secured portable document format (pdf).

6.11 Opinions of Value “As-is” or “Subject to”

Individual appraisal assignment engagements may request a value opinion of the subject property in an “as is” condition and/or “subject to” any repairs listed by the USDA in the assignment order.

7.0 REAL PROPERTY APPRAISAL DEVELOPMENT ASSIGNMENT CONDITIONS

7.1 Standards

All appraisals must comply with the current edition of the Uniform Standards of Professional Appraisal Practice, USDA Rural Development appraisal requirements per regulation and policy as set fourth from time to time, and any and all assignment condition requirements of the United States Department of Agriculture, Rural Development.

7.2 Approaches to Value

The USDA requires that the appraiser consider and develop all approaches that would produce a credible indication of value and credible result for the assignment. As an assignment condition, the USDA requires that the appraiser develop, report and reconcile the Cost Approach to value in assignments where the actual age of the subject’s improvements are indicated to be less than one year by sources deemed most reliable by the appraiser.

7.3 Analysis and Value Opinion that is Consistent with the Definition of Value Given for the Assignment.

The USDA requires that the analysis for all approaches to value be consistent with the type and definition of value provided by the client for the assignment.

7.4 Opinion of the Subject’s Site Value

The USDA requires that the appraiser develop and report an opinion of value for the subject’s site only (unimproved) based on the definition provided by the client and report the opinion with supporting summary analysis in the Cost Approach section of the primary assignment report.

7.5 Estimated Remaining Economic Life of the Subject’s Improvements

The USDA requires that the appraiser estimate the remaining economic life of the subject's improvements, (the remaining number of years that the subject's improvements will contribute value to the land) and report this estimate in the Cost Approach section.

8.0 REAL PROPERTY APPRAISAL REPORTING ASSIGNMENT CONDITIONS

8.1 Standards

All appraisal reports must comply with the current edition of the Uniform Standards of Professional Appraisal Practice, USDA Rural Development appraisal requirements per regulation and policy as set fourth from time to time, and any and all assignment condition requirements of the United States Department of Agriculture, Rural Development.

8.2 Describing and Reporting the Observed Condition of the Subject Property

The client will rely heavily on the reported physical condition descriptions, photographs, and characteristics of the subject property to make decisions. The client requires a higher level of detail in the report’s description of the subject’s physical condition and observed deferred maintenance. The USDA requires that the appraiser be objective and report in enough detail to adequately describe the actual physical condition observed, in a manner that will be meaningful and not misleading.

8.3 Appraisal Reporting Options, Forms, and Addendums required by the Client

The client requires appraisal reports comply with the most current edition of USPAP, are reported in a summary appraisal format, and are presented in compliance with the Uniform Appraisal Dataset (UAD). The specific reporting form types adopted and required by the USDA will be communicated in each appraiser assignment engagement. Common appraisal industry reporting forms that may be requested by the client include;

Fannie Mae URAR (Form 1004) - This form can be found at the following websites:

https://www.fanniemae.com/content/guide_form/1004.pdf

Fannie Mae Exterior-Only Inspection Appraisal Report (Form 2055) - This form can be found at the following websites:

https://www.fanniemae.com/content/guide_form/2055.pdf

Fannie Mae Manufactured Home Appraisal Report (1004c) - (FNMA Form 1004C/FHLMC Form 70B) have been combined into one appraisal report. The two documents will be one and the same.

This form can be found at the following websites:

https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms?taskId=task-71

Fannie Mae Individual Condominium Unit Appraisal Report (Form 1073) - FNMA Form 1073/FHLMC Form 465) has been revised; this property type is no longer indicated on the URAR.

The revised form excludes exterior inspections. Appraisals with interior inspections for condominiums should be completed on this form. This form can be found at the following websites:

https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms?taskId=task-71

Fannie Mae Exterior-Only Individual Condominium Unit Appraisal Report (Form 1075) - This form can be found at the following websites:

https://www.fanniemae.com/content/guide_form/1075.pdf

General Purpose Residential Summary Appraisal Report Form, (GPAR or GP-Res)

8.3.1 Supplemental appraisal report addendums required by the USDA:

Floor plan or Sketch Addendum Subject and Comparable Sale Photo Addendums (to include interior photos of subject and all improvements located on the subject’s site) Location Map Addendum Supplemental Addendums that include copies of data or listing sheets for the subject and comparable sales utilized for analysis.

8.3.2 Status Report. The contractor shall provide a monthly case status report to the COR and the CO by the 10 th calendar day after completion of the month. Reports must include: Order number, Name of borrower, loan number, property address, date of order. Status of the account and date appraisal completion is expected.

9.0 STANDARDS

9.1 Statutes, Laws and Regulations. All legal, enforcement and collection actions on the part of the contractor must be in compliance and consistent with all Federal, State and local statutes, regulations and ethical standards which apply to the liquidation of real estate collateral and collection of debt.

These include but are not limited to:

Privacy Act of 1974, as amended (5 U.S.C. 552a) The Fair Debt Collection Practices Act (15 U.S.C. 1692 st seq.)

The Debt Collection Act of 1982, as amended (P.L. 97-365) The American Bar Association Model Rules and Professional Responsibility (1983)

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 in this Performance Work Statement and are considered as a part of the contract. Violation of applicable law, regulation or ethical standards shall be cause for termination of the contract for default.

9.2 Clarification of Statutes, Regulation. These statutes and standards, as well as other applicable Federal and State laws and regulations pertaining to the Government as a whole are incorporated by reference into this agreement and are considered a part of any resulting order. Violation of applicable law, regulation or ethical standards shall be cause for termination of this agreement or orders issued in accordance with this agreement.

9.3 USDA Role. 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 contractor’s office and online at:

http://www.rurdev.usda.gov/RegulationsAndGuidance.html.

10.0 AUTOMATED INTERFACES

10.2 Automated Interfaces-On Line System Access

The Contractor shall have an on-line system that provides remote access directly to its data base from Government issued computers and located at USDA, Rural Development offices or remote telework locations. It is anticipated that these computers will be located at the CSC, Default Management Branch operations in St. Louis, Missouri.

The Contractor’s on-line system shall have a security system that prevents unauthorized access. The Contractor shall identify for USDA any entities that provide access to the data base via the on-line system.

11.0 DOCUMENTATION

The Contractor shall provide an online link of User documentation that will be necessary for USDA staff to effectively utilize the on-line system. The Contractor shall provide updates automated, as changes occur and shall be delivered to USDA concurrently with deliveries to your client base.

11.1 Online Training

The Contractor shall provide on-site training of USDA staff in the operation of the On-Line System.

This training shall consist of a minimum of two sessions, and will be held in St. Louis Missouri.

11.2 Training

The Contractor shall provide on-site training of USDA personnel of the on-line system.

This includes but is not limited to:

a. Screen navigation

b. Data elements

c. Data updates

d. Establishment of service

e. Cancellation of service

f. Report options

g. Report ordering

h. Access to vendor data

i. General information available on the system

Sub Contractor Bills and Remittances-Contractor Responsibility

The Contractor shall be responsible for processing and rewarding to the sub contractors all remittances.

Should the Contractor fail to forward remittances to the subcontractors and the remittances have been processed accurately and in a timely manner by USDA, the Contractor shall be responsible for all penalties and interest due to sub-contractors.

11.4.1 Bills/Remittances-Delivery Address

USDA will furnish the Contractor with a mailing address where bills and information are to be delivered. Changes in these addresses shall be made only with the authorization of the Contracting Officer’s Representative.

11.4.2 Invoice -Delivery Schedule

The Contractor shall furnish all invoice information to USDA with sufficient lead time as to allow adequate processing time for Agency staff. The following schedule shall be adopted and adhered to by the Contractor as the shortest time frame for the delivery of bills to USDA:

30 days from date service is performed

11.4.3 Liability for Late Payment – All liability resides with contractor for late payment to subcontractors.

12. CONTINGENCY PLAN

The Contractor shall provide a business resumption/contingency plan in the event of a system failure.

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