Attachment 0011 - MCM Tasks (Informational Purposes Only).pdf

Attachment 0011 Mortgagee Compliance Manager (MCM) Tasks

5 Specific Tasks

5.1 Pre Conveyance Activities

The Contractor shall perform pre-conveyance activities that shall include:

Extensions of Time Requests Over-Allowable Requests Occupied Conveyances Surchargeable Damages

5.1.1 Extension of Time Requests

The Contractor shall process Mortgagees Request for Extension of Time and CWCOT extension of time within five (5) business days following receipt of a request. The Contractor shall review the request within the REO System of Record and either approve or deny extension requests in accordance with (IAW) the applicable regulations, guidance and documents including HUD Handbook 4000.1.

The Contractor shall notify the Mortgagee within five (5) business days from receipt explaining the reasons why the extension request was approved or denied. The Contractor shall grant an initial extension and, if required, subsequent extensions. Extensions shall not be granted for more time than is required to complete the action in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of requests shall be processed within five (5) business days following receipt of a request.

AQL: 95% of all requests processed within 5 business days.

Deliverables A001 P260 Report

5.1.1.1 Appeal of Extension Denial

Contractor shall review the Appeal of Extension Denial within three (3) business days to make a final determination. If the Mortgagee disagrees with the Contractor's decision to deny a extension request, the Mortgagee has five (5) business days from the date of denial to submit a request for reconsideration to the Contractor. The Contractor shall notify the Mortgagee explaining the reasons why the extension request was approved or denied in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of all Over-Allowable Appeals processed within 3 business days.

AQL: 95% of all Over-Allowable Appeals processed within 3 business days.

5.1.2 Over-Allowable Requests

The Contractor shall review and process over-allowables request on CWCOT, Forward Mortgages and HECM (HECM system of record). The Contractor shall approve or deny the requested expenses within five (5) business days to the mortgagee or its designee. The Contractor shall notify the Mortgagee of the reasons why the over-allowable request was approved or denied.

The Contractor shall evaluate all requests for reimbursement line items to determine if the request is reasonable and justifiable. The Contractor shall determine costs using the HUD provided cost estimator service. If the Contractor determines that the expense is not justified, the Contractor shall deny the request in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of requests shall be reviewed and processed within five (5) business days.

AQL: 95% of all requests reviewed and processed within five (5) business days.

Deliverables A001 P260 Report

5.1.2.1 Appeal of Over-Allowable

If the Mortgagee disagrees with the Contractor's decision to deny an Over-Allowable, the Mortgagee will have five (5) business days from the date of the denial, to submit a request for appeal to the Contractor. The Contractor shall review, and process Appeals and make a final determination within three (3) business days of receipt of request for reconsideration (appeal), in accordance with (JAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of all Over-Allowable Appeals processed within 3 business days.

AQL: 95% of all Over-Allowable Appeals processed within 3 business days.

Deliverables A001 P260 Report

5.1.3 Occupied Conveyance

The Contractor shall process, within thirty (30) calendar days of receipt, all requests from occupants for consideration of occupied conveyance. The Contractor shall evaluate requests based on HUD Handbook 4000.1 and 24 CFR 203.670 through 203.681 and whether the property is habitable and free of hazardous materials.

The Contractor shall request that the FSM conduct an inspection within forty-eight (48) hours of the Contractors request to determine whether the property is habitable, free of lead-based paint hazards, or free of evidence that a hazardous substance was stored for one year or more, or known to have been released, or disposed of at the property. The Contractor shall deny those requests that do not meet the requirements for occupied conveyance. Approval from the COR must be obtained to grant occupied conveyance or otherwise permit continued occupancy in those cases where occupied conveyance is in the best interest of HUD as defined in the HUD and CFR regulations.

The Contractor shall not recommend occupied conveyance of properties containing lead-based paint hazards that are occupied by children under the age of seven (7) or occupied conveyance of any property with evidence of hazardous substances as described above. The Contractor shall concurrently notify the occupant by certified letter (which is a cost to the Contractor) and the Mortgagee via email within three (3) business days of the occupied conveyance decision. If occupied conveyance is denied, pursuant to 24 CFR 203.670 through 203.681 and HUD Handbook 4000.1 or subsequent policy guidance, occupants may request an informal conference with the Contractor; appeal the decision in writing, or both. Requests for an informal conference with a representative of the Contractor shall be made in writing within ten (10) business days after the date of the denial notice. Written appeals shall be received by the Contractor within twenty (20) business days after the date of the denial notice. If an occupant or its representative requests an opportunity to review relevant material that formed the basis for a denial, the Contractor shall make the material available for review and provide, at no cost and upon request, a copy of the material. No Management Official who engaged in any function related to the issuance of the preliminary denial shall participate in, provide advice, or make the final decision except to present evidence of the rationale behind the preliminary denial. The Management Official who makes the final decision shall be a supervisor at least one level above the Management Official who made the preliminary denial. After due consideration of the appeal in accordance with the applicable regulations, handbooks and other pertinent guidance, the Contractor shall send a final notice of determination to the occupant and the Mortgagee within five (5) business days. The COR reserves the right to review all requests for occupied conveyance in accordance with (JAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of Occupied Conveyance requests processed within 30 calendar days.

AQL: Zero deviation Deliverables

A001 P260 Report

5.1.4 Surchargeable Damage

The Contractor shall process, approve or deny surchargeable damage requests valued at $2,500.00 or less, within five (5) business days following receipt of the surchargeable damages request. The Contractor can deny requests over $2,500.00, but not approve a request over this amount. The Contractor shall notify the Mortgagee of the reasons why the surchargeable damage request was approved or denied.

If the Contractor determines approval and the Mortgagees cost to repair estimate for surchargeable damage exceeds $2,500, the Contractor shall obtain a government cost estimate to repair the damage using the HUD-provided cost estimator service. The COR shall review the contractor's written recommendation and then make a decision whether or not to approve or deny the request for damaged property over $2,500.00. The Contractor shall submit a written request, that shall include a summary of facts for COR Approval, within five (5) business days of receipt.

Upon receipt of COR decision, the Contractor shall notify the Mortgagee of the decision within five (5) business days in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of requests processed and response within 5 business days.

AQL: 95% of requests processed and response within 5 business days.

A001 P260 Report

5.2 Post conveyance Activities

The Contractor shall perform post-conveyance activities that shall include:

Claim Reviews

Title Evidence Review and Approval

Administrative Remedies

5.2.1 Part A Claim Review

The Contractor shall review all claim applications submitted by the Mortgagee for compliance with HUDs conveyance requirements described in HUD Handbook 4000.1 and communicate all discrepancies in writing to the Mortgagee no later than thirty (30) calendar days following receipt of the claim application or such earlier time period required below. The Contractors review of the various parts of HUD Form-27011 shall ensure that this form was completed in accordance with HUD Handbook 4000.1.

The Contractor shall verify acquisition resulting from an insurance claim, by accessing the SFIS to verify that the loan was insured and should be conveyed. The Contractor shall review for soft edits, hard edits and fatal suspension codes. The Contractor shall also review the HUD Property Inspection Report in the REO System of Record to verify that the property met conveyance conditions.

On the date the deed is filed for record or mailed to the recording authority, Mortgagees submit the HUD-27011, Part A and any required supporting documentation into HUDs system of record for Contractor review. If the Contractor learns by any means (for example, by receipt of a tax bill) that a deed to HUD is filed for record or mailed to the recording authority for the property and the HUD Form 27011 is not received, or if required supporting documentation is not included, the Contractor shall first follow the instructions provided in HUD Handbook 4000.1 for verification of proper acquisition. If the property was conveyed properly, the Contractor shall contact the Mortgagee and request a copy of the Part A Claim.

The Contractor shall review Part A of the claim for the Mortgagees claimed status of occupancy, damage, payment of property taxes and other expenses such as HOA fees. The Contractor shall compare the information provided by the Mortgagee on the Part A claim to the results of the initial property inspection, and to also verify occupancy and damage with the HUD Property Inspection Report (HPIR) Initial Inspection Form, BPO/appraisal data or other information known to the Contractor about the condition and maintenance history of the property in accordance with HUD Handbook 4000.1, Housing Notice 2002-20 and any subsequent policy directive.

The Contractor shall perform the following system review procedures within HUD provided systems:

Verify Acquisition: The Contractor shall verify acquisition resulting from an insurance claim, by accessing the SFIS to verify that the loan was insured and should be conveyed. In addition, for those acquisitions that were the security for a FHA insured mortgage, the Contractor shall verify a property address, Mortgagee name, address and telephone number.

Review Edits: The Contractor shall review for soft edits, hard edits and fatal suspension codes. All hard edits and fatal suspension codes shall be removed before the property can advance to Step 1. The soft edit and hard edit reviews can occur concurrently. Refer to FHA Connection "Help screens for a complete definition of soft and hard edits. Reviews are categorized as follows:

• Soft Edit Reviews - The Contractor shall review soft edits and may promote the claim manually to Step 1 after they complete the verification process in Item 1 above. If soft edits are not removed within three (3) business days, the claim will automatically promote to Step 1 and is paid. Refer to FHA Connection "Help screens for a complete definition of soft and hard edits.

• Hard Edit Reviews - The Contractor shall review all hard edits within five (5) calendar days and notify the mortgagee of the problem by email and certified mail.

The Mortgagee shall resolve the hard edits within sixty (60) calendar days from notification of the issue. If the hard edits are not resolved within sixty (60) calendar days, the Contractor shall quit claim deed (QCD) the property back to the Mortgagee and notify the Mortgage within twenty-four (24) hours that the property has been quit claimed back into the Mortgagees name. Refer to FHA Connection "Help screens for a complete definition of soft and hard edits.

• Fatal Suspension Code Reviews - If a fatal suspension codes exists; the Contractor shall quit claim deed the property back to the Mortgagee within forty-eight (48) hours. The Contractor shall then record the quit claim deed and notify the Mortgagee within 24 hours that the property has been quit claimed back into the Mortgagees name. Refer to FHA Connection "Help screens for a complete definition of soft and hard edits.

Occupied Properties - Properties shall be vacant at time of conveyance unless approved for occupied conveyance. Addendum 5, paragraph 1. Item 22, of the HUD Form 27011-A ("Is the property vacant?) should be marked "yes" unless the Contractor approved an occupied conveyance in accordance with Section "Processing Requests for Continued Occupancy and the date of the approval is entered into Item 23. If the Contractors inspection determines that the property was conveyed occupied without prior permission from HUD, the Contractor shall follow the procedures in Section "Properties Conveyed Occupied without Approval.

If a Mortgagee conveys a property occupied without prior Contractor approval or contrary to regulatory requirements, the FSM, on their initial inspection, when the property comes into the REO inventory, will determine if occupied the Contractor shall initiate re-conveyance.

Properties Conveyed with Property Damage - The Contractor shall review the HUD Form 27011-A form. If Item 24, "Is property conveyed damaged?" if marked yes, the Contractor shall process the conveyance in accordance with the procedure outlined below in Section "Surchargeable Damage Conveyance Approved".

Surchargeable Damage Conveyance Approved If Item 24 is marked "yes", and conveyance with surchargeable damage was previously approved for the property, the Contractor shall check to ensure that the correct approval date was entered and that a correct damage amount was entered in the HUD Form 27011 A claims form. The Contractor shall also compare the extent of the damage claimed by the Mortgagee with the initial inspection information and estimates of repair costs previously conducted to ensure that the extent of the damage is not greater than the amount claimed in the request to convey damaged.

Surchargeable Damage Conveyance Not Approved - If a property is conveyed with surchargeable damage without prior approval, the Contractor shall develop the Government's estimate of the amount required to repair the damage using the cost estimator service and initiate the debt collection process for the estimated repair and any amounts claimed by the mortgagee for any work resulting from the Contractors estimate as discussed in Section "Administrative Remedies - Request for Reimbursements to HUD.

Limitation on Fire Damage - If a property is conveyed with fire damage without prior approval, the Contractor shall check to see if the Mortgagee has entered the date of its certification letter in Item 25(b) of form HUD-27011, Part A which indicates that the Mortgagee is claiming that its liability for fire damage is limited to the amount of its insurance recovery.

The Contractor shall assess the Mortgagees claim to this limitation. If the Contractor accepts the Mortgagees claim that 24 CFR 203.379(a) (2) applies, when the Contractor receives the Part B of Form HUD-27011, it shall check Item 119 of Part B to determine whether the actual insurance recovery differed from the estimate given in Item 27 of Part A. If the actual insurance recovery was more than the estimate, the difference shall be deducted under Column A on Part B. If the actual insurance recovery was less than the estimate, the difference shall be added under Column B on the Part B.

Properties Conveyed with Non-Surchargeable Damage If a property has sustained non-surchargeable damage the Mortgagee is not required to obtain pre-approval for conveyance.

However, the Mortgagee will include a description of the damage in the "Mortgagees Comments section of the Form HUD-27011, Part A and include, along with the claim, documentation supporting and/or showing evidence that the damage was not surchargeable damage. The Contractor shall review the supporting documentation to determine if there was mortgagee neglect or surchargeable damage.

If a Mortgagee fails to provide the required explanation in the Mortgagees Comments sections of the Part A or fails to provide the required documentation of P&P actions, the Contractor shall notify the Mortgagee in writing that the Mortgagee has ten (10) calendar days to provide the information. If the mortgagee provides the information and the Contractor determines that the damage is surchargeable, the Contractor shall assess the extent of the damage and shall either immediately contact the COR and recommend re-conveyance (Section "Title Approval") or proceed with the "Administrative Remedies" - Request for Reimbursements to HUD to collect an amount equal to the greater of any insurance recovery received, or to be received by the Mortgagee or the government's estimate of the cost to repair the damage in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1 and 24 CFR 203.379.

If no documentation is received from the Mortgagee, the Contractor shall determine that the damage is surchargeable. The Contractor shall assess the extent of the damage and shall either immediately contact the COR and recommend re-conveyance (Section "Title Review) or proceed with the Collections Process in Section "Administrative Remedies - Request for Reimbursements to HUD to collect an amount equal to the greater of any insurance recovery received or to be received by the Mortgagee or the Government's estimate of the cost to repair the damage.

Performance Standards

a) Standard: 100% of all claims reviewed within 30 calendar days.

AQL: 95% of all claims reviewed within 30 calendar days.

b) Standard: 100% of notifications sent to the mortgagees within 5 calendar days of claim errors.

AQL: 95% of claim errors notifications shall be submitted to the mortgagees within 5 calendar days.

Deliverables A001 P260 Report

5.2.2 Parts B and C Claim Review

The Contractor shall review all claim applications submitted by the Mortgagee for compliance with HUDs conveyance requirements described in HUD Handbook 4000.1 and communicate all discrepancies in writing to the Mortgagee no later than thirty (30) calendar days following receipt of the claim application or such earlier time period required below. The Contractors review of the various parts of HUD Form-27011 shall ensure that this form was completed in accordance with HUD Handbook 4000.1. The Contractor shall access HUDs claim system to determine if payment was made for over-allowable.

The Contractor shall review Parts B and C to verify that claimed expenses were performed and if Part B is over the allowable P&P thresholds, that an over-allowable request was approved and the amount on the Part B was consistent with the approved over-allowable amount. To make this determination, the Contractor shall, at a minimum, compare the information on the Parts B and C claims to the information on the Property Conveyance Inspection Report (Sections 1-13 of the Initial Inspection Report), lender inspection reports, photos, appraisal reports for the property and to the approved over-allowable request.

Claimed Expense Not Completed If claimed services were not performed or not performed properly:

If the claim is paid, the Contractor shall initiate action to collect the overpayment within 30 calendar days as described in Section "Administrative Remedies - Request for Reimbursements to HUD and in Housing Notice 2002-20 or subsequent policy directives to collect the amount that exceeds the allowable P&P thresholds.

If claim has not been paid, the Contractor shall notify the Single Family Claims Division to not pay the P&P expenses over the allowable threshold.

Claimed Expense Exceeds Approved Amount If claimed expense exceeds the approved amount to include over-allowable request, within 30 calendar days the Contractor shall:

If the claim is paid, initiate action to collect the overpayment as described in Section "Administrative Remedies - Request for Reimbursements to HUD and in Housing Notice 2002-20 or subsequent policy directives for the amount to match the approved over-allowable amount or the unperformed repair amount, whichever is greater or

If claim has not been paid, notify Single Family Claims Division to reduce the claim to match the approved over-allowable amount or reduce the claim division by the unperformed repair amount, whichever is greater.

Claimed Expense Exceeds Allowable Cost and No Approved Overallowable Request C If the Mortgagee does not have an approved over-allowable Request for the claimed expense over the allowable cost, the Contractor shall within 30 calendar days:

If the claim is paid, initiate action to collect the overpayment as described in Section "Administrative Remedies - Request for Reimbursements to HUD and in Housing Notice 2002-20 or subsequent policy directives to collect the amount that exceeds the allowable P&P thresholds.

If claim has not been paid, notify the Single Family Claims Division to not pay the claimed expenses over the allowable threshold.

Required Work Not Completed - No Expense Claimed HUD does not request reimbursement from a Mortgagee for P&P items that should have been completed prior to conveyance but were not completed and are not included on the Mortgagees claim for insurance benefits unless the failure to complete the P&P actions resulted in damage to the property or additional costs to

HUD.

Performance Standards

a) Standard: 100% of Parts B & C claim reviews shall be completed within 30 calendar days

AQL: 95% of all claims reviewed within 30 calendar days.

5.2.3 Part D Claim Review

The Contractor shall review all claim applications submitted by the Mortgagee for compliance with HUDs conveyance requirements described in HUD Handbook 4000.1 and communicate all discrepancies in writing to the Mortgagee no later than thirty (30) calendar days following receipt of the claim application or such earlier time period required below. The Contractors review of the various parts of HUD Form-27011 shall ensure that this form was completed in accordance with HUD Handbook 4000.1. The Contractor shall access HUDs claim system to determine if payment was made for over-allowable.

Additional Information:

For line item 305 of Form HUD-27011 the Contractor shall determine whether taxes charged were actually paid and whether the Mortgagee is charging HUD for tax penalties. If HUD is charged for tax penalties incurred for delay of payment, the Contractor shall note this activity within HUDs system of record and follow procedures outlined in "Administrative Remedies Request for Reimbursements to HUD.

The Contractor shall review all claims to verify that the mortgagee has met all timeframes in regard to the foreclosure timeframes. These timeframes include the initiation of foreclosure, due diligence during foreclosure and the conveyance timeframe. The review must take into account all automatic and manual extensions provided to the mortgagee. Once the review is completed if a mortgagee exceeded the allowed conveyance timeframe the Contractor will demand all P&P, operating and debris removal expenses that mortgagees have incorrectly included on their Part B claims in direct violation of the following CFR's: 24 CFR 203.355, 24 CFR 203.356, 24 CFR

203.359 and 24 CFR 203.402(g)(2).

The Contractor shall monitor to ensure the payments are remitted by mortgagee and if not, the Contractor shall then take the appropriate steps to offset the payment.

Performance Standards

a) Standard: 100% of Parts D claim reviews shall be completed within 30 calendar days

AQL: 95% of all claims reviewed within 30 calendar days.

Deliverables A001 P260 Report

5.2.4 CWCOT Claim Review

The Contractor shall review, verify and confirm that Mortgage Lenders are in compliance with Mortgagee Letters that are related to the following CWCOT claim criteria:

Type of Appraisal - The Contractor will determine if the lender ordered the correct type of appraisal. If the property is occupied at the time of the appraisal, then an exterior only appraisal is required. If the property is vacant at the time of the appraisal, then an interior/exterior appraisal is required. If the lender fails to secure the correct type of appraisal, then the Contractor shall take the appropriate Administrative Remedy as outlined in the PWS.

Discount after the properties appraised value has been established, employees of a mortgagee authorized to access the Commissioners Adjusted Fair Market Value (CAFMV) link in FHA Connection should visit https://entp.hud.gov/clas/index.cfm to determine a properties CAFMV. The Contractor is to verify the correct discount was applied. If the lender fails to apply correct discount for the properties location, then the Contractor shall take the appropriate Administrative Remedy as outlined in the PWS.

Bid Amount - The Contractor is to verify based on the appraised value and the correct discount if the lender bided the correct amount at the third party sale. If the lender fails to make the correct bid, then the Contractor shall take the appropriate Administrative Remedy as outlined in the PWS.

Auction Fee - The Contractor is to verify the auction fee was no more than five percent of the sales price. If the lender fails to ensure the correct auction fee is charged, then the Contractor shall take the appropriate Administrative Remedy as outlined in the PWS.

Surchargeable Damage - The Contractor is to verify the property condition off the appraisal to determine if there were any un-repaired surchargeable damage. If there is un-repaired surchargeable damage, then the Contractor shall take the appropriate Administrative Remedy as outlined in the PWS.

Performance Standards

a) Standard: 100% of claims reviewed within 30 calendar days.

AQL: 95% of all claims reviewed within 30 calendar days.

Deliverables A001 P260 Report

5.2.5 Title Review

The Contractor shall conduct title reviews and approve or deny, the title package within five (5) business days following receipt of title evidence from the Mortgagee. If the title package is denied, the Contractor shall inform the Mortgagee of the cause of the denial and the remedy to address the title issue. Title approval letters are system generated following the Contractors input of approval data into the REO System of Record.

If, within ten (10) calendar days following receipt of Contractors notice of rejection, the Mortgagee fails to make the requested corrections or does not agree to accept a reduction in insurance benefits considered adequate to compensate HUD for any anticipated loss as a result of the title condition, the Contractor shall recommend reconveyance to the COR and follow COR instructions relative to conveyance. If sufficient information to approve title evidence is received the "Date Title Received block of the title approval letter shall reflect the date the complete title evidence was received. When sufficient information to approve the title evidence is received, within the five (5) business day review period, the title approval letter should reflect the original receipt date in the "Date Title Received" block. If the Mortgagee does not provide sufficient information within the allotted timeframe, the Contractor shall reject the title evidence.

The Contractor shall not disapprove title evidence because minor corrections, i.e. address locators (N., S., Avenue vs. Street) are needed. Contractors shall contact the Mortgagee by electronic transmission and ask the Mortgagee to obtain a corrected title policy. When sufficient https://entp.hud.gov/clas/index.cfm information to approve the title evidence is received, within the five (5) business day review period, the title approval letter should reflect the original receipt date in the "Date Title Received" block. If the Mortgagee does not provide sufficient information within the allotted timeframe, the Contractor shall reject the title evidence in accordance with Section "Minor Defects.

If the Mortgagee fails to deliver title evidence by the forty-fifth (45th) calendar day after the date a deed to the Secretary of HUD is filed for record or possession, the Contractor shall make written contact with the Mortgagee and request the title evidence. The Mortgagee shall submit the title evidence within five (5) business days of request. If the Mortgagee does not provide the required title information, the Contractor shall reject the title evidence request in accordance with Section titled "Title Review" in accordance with (IAW) applicable regulations, guidance and documents including HUD Handbook 4000.1.

Performance Standards

a) Standard: 100% of title packages reviewed and responded to within five (5) business days.

AQL: 95% of title packages shall be reviewed and a response submitted within 5 business days. Deliverables A001 P260 Report

5.2.6 Administrative Remedies - Request for Reimbursements to HUD

The Contractor shall process administrative remedies on FHA properties that are in non-conveyance condition or do not have clear and marketable title. The Contractor shall notify the Mortgagee and request the necessary supporting documentation to be in compliance with applicable regulations, guidance and documents including HUD Handbook 4000.1. If Mortgagees fail to respond to HUDs Contractors request within the prescribed time frames, the Contractor shall pursue administrative remedies including sending Demand Letters, Notice of Intent to Collect by Administrative Offset, Mortgagees Failure to Perform Letters and Notice of Intent to Convey.

The Contractor shall initiate action to collect funds owed to HUD by Mortgagees related to their failure to adhere to any of the conveyance requirements. This includes generating and sending 100% of demand letters thirty (30) calendar days after claim review, requesting payment for costs claimed by the mortgagee during conveyance activities and communicating with the mortgagee on the payment of funds. At this time, the contractor is also to Claim Block the case by sending email to the Claim Box mailbox along with the reason why. If the lender corrects the issue (mortgagee neglect or title issues) then the MCM will remove the claim box be sending an email to the Claim Block mailbox.

The Contractor shall obtain COR approval within thirty (30) calendar days of discovery of mortgagee noncompliance before initiating a re-conveyance action through REO's System of Record. The Contractor shall provide a Notice of Intent to Re-Convey, notifying the Mortgagee of its responsibility to withdraw its claim, reimburse HUD for all claim amounts paid, reimburse HUD for its daily holding costs and accept conveyance in accordance with 24 CFR 203.363.

Concurrent with issuance of a Notice of Intent to Convey, the Contractor shall move the property to a Held-Off-Market status. Upon expiration of the notice period and barring any appeal filed by the Mortgagee, the Contractor shall prepare and execute a quit claim deed conveying title to the Mortgagee.

The Contractor shall ensure that the reimbursement due to HUD is received from the Mortgagee prior to recording the quit claim deed. The Contractor shall ensure that the quit claim deed is recorded in the jurisdiction where the property is located. If payment is not received when due, the Contractor shall pursue administrative offset and record deed when HUD reimbursement has been received. The Contractor shall notify the COR upon completion of the conveyance action and request an update to the REO System of Record) to remove the property from HUDs inventory.

The contractor shall review all requests for property re-acquisition. Following a reconveyance the mortgagee may reapply for insurance benefits at a subsequent date; provided, however, that the mortgagee may not be reimbursed for any expenses incurred in connection with the property after it has been reconvened by the Secretary, or paid any debenture interest accrued after the date of initial conveyance or after the date conveyance was required by 203.359 of this part, whichever is earlier and there will be deducted from the insurance benefits any reduction in the Secretary's estimate of the value of the property occurring from the time of reconveyance to the time of reapplication.

The contractor shall review the case within ten (10) business days from receipt of a complete reacquisition package and a Contingent Approval or a Denial will be issued by email through REOs system of record. All denied requests will include the reason for the denial.

Contingent Approval responses will instruct the Mortgagee to upload the following to REOs system of record:

A new 27011A with the words "Re-Conveyance" written at the top

Proof that the deed conveying title to HUD has been sent for recording. Sufficient proof includes a copy of the deed and a copy of the check for the recording fees.

Once the 27011A and proof that the deed conveying title to HUD has been uploaded to REOs system of record, the Mortgagee must notify the Contractor. After review and acceptance of the documents, the Contractor will send one email to the following, copying the Mortgagee: (a) HUDs Field Service Manager: advising the property has been conveyed and (b) HUD: notifying the claim can be paid

Performance Standards

a) Standard: 100% of Demand Letters shall be submitted to the mortgagee within 30 calendar days after the claim review.

AQL: 95% of Demand Letters shall be submitted to the mortgagee within 30 calendar days.

5.3 Deed/Document Execution

The contractor shall review and execute deeds/documents upon lender request for Quit Claim/Special Warranty deeds because the lender has pre-maturely/improperly deeded the property to HUD. The Contractor shall execute these forms/documents in accordance with its Delegation of Authority provided by HUD.

Upon receiving a complete package from the Lender, the Contractor shall have 15 (fifteen) business days to complete the execution, return to the lender and scan the documents into REO System of Record. Requests that are outside the Contractors delegation of authority should be referred to the COR.

Authority to execute documents on behalf of the Secretary of HUD will be delegated to specific individuals identified by the Contractor and approved in writing by the National Servicing Center Director, subject to a Delegation of Authority (DOA) executed on behalf of the Secretary by the Assistant Secretary for Housing, Federal Housing Commissioner.

To provide public notice of the delegation, HUD will publish the DOA in the Federal Register.

Additionally, HUD will maintain a web page on which a copy of the DOA and the names of authorized individuals will be listed. HUD staff will continually update the web page as DOAs are added and deleted. Only those individuals whose names appear on the website are authorized to execute documents on behalf of the Secretary of HUD.

Within five (5) business days of receipt of a request of the COR, the Contractor shall provide a spreadsheet that identifies those employees who require the DOA, including their job title.

Following receipt of the spreadsheet, HUD staff will draft a letter of delegation; forward the executed letter with a copy of the Federal Register Notice to the Contractor and post the names on the website.

The Contractor shall notify HUD in writing within two (2) business days of termination, departure, death or reassignment of any individual who has been granted a DOA and will take every measure necessary to ensure that unauthorized persons do not utilize the DOA. Should it be necessary to add individuals to the delegation, the Contractor shall provide written notice to the COR. Upon receipt of an amended delegation letter and concurrent with posting the individuals name on the website, the DOA will be effective. DOAs expire only upon revocation by HUD or at expiration/termination of the contract. It is not necessary to reissue DOAs annually as contract option periods are exercised, however, the COR may require that the Contractor recertify the list of individuals to whom DOA has been granted.

Performance Standards

a) Standard: 100% of all Quit Claim Deeds shall be initiated on day 61

AQL: 95% of all Quit Claim Deeds shall be initiated on day 61

5.4 Document Administration

For all activities the Contractor shall perform the following activities:

Post Records Daily - The Contractor shall update the REO System of Record with all actions taken for Mortgagee compliance upon each occurrence.

Scan/Upload Documents - For all documents received outside of the REO System of Record, the Contractor shall scan and upload the documents into the REO System of Record within 24 hours of receipt by the Contractor. All envelopes shall be scanned front and back and uploaded to the appropriate FHA case number.

Date Stamp Documents - The Contractor shall date stamp all documents, materials and other correspondence received via postal mail or external carrier. All correspondence shall be time/date stamped within 24 hours of receipt by the Contractor. After upload completion, the Contractor shall destroy all documents in a secure manner in accordance with the Contractors Quality Control Plan. The only exception to this rule deals with the Occupied Conveyance documents. All original documents and envelopes shall be maintained in hard copy even after they are scanned into REOs system of record. These hard copy files shall be stored in a locked file cabinet for a period of one year from the date the final decision of the occupied conveyance is made.

Assisting with FOIA/Privacy Act Requests - The Contractor shall assist HUD in responding to Freedom of Information Act (FOIA) (Title 5 U.S.C. 552) and Privacy Act (5 U.S.C. 552a) requests. This assistance may include decision reasoning and compiling data from the REO System of Record to address the request.

Assisting with Governmental Inquiries -The Contractor shall notify the COR within twenty-four (24) hours following receipt of any request for information from an elected or public official and shall, no later than two (2) business days of said request, provide written information to assist HUD in preparing a response.

The Contractor shall utilize the REO System of Record communication log to track, monitor and resolve the internal and external communications for each REO property during the disposition program.

5.5 Customer Service

The Contractor shall respond to all inquiries received via telephone, email fax and postal mail within 2 business days after receipt.

The contractor shall conduct a minimum of 10 conference calls per month with FHA Lenders/Servicers and Housing Agencies to discuss trends, issues, best practices, case specifics and to prevent unnecessary mortgage loan claim loss.

The contractor shall publish an industry newsletter annually. The newsletter will be reviewed and approved by the Contracting Officer Representative (COR), prior to release. The newsletter should cover the following topics: trends, best practices, industry updates, HUD regulation updates, acceptable submissions/documentation and process change notifications.

5.6 Continuity of Operations Plan (COOP)

The Contractor shall provide a draft COOP 10 business days after contract award. The Contractor shall develop a fmal COOP for all services specified within this contract no later than five (5) business days of receipt of COR comments. Upon approval of the COR, the Contractor shall implement and maintain the COOP. Changes to the COOP shall be submitted in writing to the COR prior to implementation. The COOP shall be designed and implemented to result in all services required under this contract being continued without interruption in the case of an emergency or crisis requiring relocation of the Contractors office and other resources. The plan shall also address, Subcontractor default; recovery from natural disaster as it affects the Contractors operation; employee strike; and civil disorder.

Performance Standards

a) Standard: Submit the COOP Plan 10 business days after contract award. The plan shall be accurate and shall address all required topics and issues

AQL: no later than the 13th business day after contract award and shall address all the required topics and issues and have no more than ten (10) typographical errors.

Deliverables A002 Continuity of Operations Plan (COOP)

5.7 Reporting

The Contractor shall submit a Directors Report on a monthly basis which details the Contractors operations. Please see the attached sample Directors Report in Section J of the solicitation. The report shall be due by the 10th business day of the following month.

The Contractor shall submit up to 5 AdHoc reports on a monthly basis.

These reports shall include Lender specific reports (indicating activity, lender comparisons and narrative), CWCOT reports or geographic locations that HUD identifies based on default, foreclosure or other economic conditions within 3 business days of request. A single lender report shall cover all lenders for which data is requested. CWCOT and Geographic locations are two separate reports.

The Contractor shall deliver to the CO an original hard copy of the contractors most-current, audited financial statement each year, no later than ninety (90) calendar days before the expiration of the base year and each option year.

Performance Standards

a) Standard: Submit the Directors Report by the 10th business day of the following month AQL: 15th business day of the following month

b) Standard: Submit Ad Hoc reports within 3 business days of request

AQL: 2 day deviation

c) Standard: Submit the Annual Audited Financial Statement within (90) calendar days before the end of the expiration of the base year and each option year.

AQL: 30 day deviation Deliverables A004 Directors Monthly Report A005 AD Hoc Reports A006 Annual Audited Financial Statement

6 Deliverables

The Contractor shall complete all work and submit all deliverables as specified herein.

The Government reserves the right to make changes to delivery dates.

Number Name Frequency Quantity A001 P260 Report Monthly 1 A002 Quality Control Plan Once 1 A003 Continuity of Operations Plan

(COOP)

Once 1

A004 Directors Monthly Report Monthly 1 A005 AD Hoc Reports Monthly 5 A006 Annual Audited Financial

Statement Annual 1