Attach_5a_SFMSS_Default_Operation_Procedures_Manual_Appendices.pdf

This document is for the internal use of Ginnie Mae and its MSS’s only.

Government National Mortgage Association

APPENDIX A (Phase 1)

DEFAULT PREPARATION

TABLE OF CONTENTS

MSS Default Team Matrix…………………………………………………………..A-1

MBS/OMF Issuer Information Worksheet …………………………………….….A-2

FRC Issuer Information Worksheet …………………………..………………..….A-3

Situation Assessment Guide……………………………………………………..…..A-4

Standard MSS Confirmation Letter……………………………….………………..A-5

MSS Default Team Matrix Appendix A-1 Associated Task: 2.2.2 Assign Default Team members and email/fax MSS Team Matrix to Ginnie Mae Purpose: To help the GTR/GTM analyst confirm that the MSS has the required size, skills, and expertise for the default

Master Subservicer (MSS) Default Team Matrix

MSS Default Team Matrix Appendix A-1 Associated Task: 2.2.2 Assign Default Team members and email/fax MSS Team Matrix to Ginnie Mae Purpose: To help the GTR/GTM analyst confirm that the MSS has the required size, skills, and expertise for the default

Skills/Expertise

Default

Team

Leader

Team

Member

Team

Member

Team

Member

Team

Member

Team

Member

Team

Member

Team

Member

Team

Member

#1 #2 #3 #4 #5 #6 #7 #8

Name

Mortgage Cash

Receipts Processing

Document Control

Services

Banking

Loan & Insurance

Administration

Tax and Escrow

Account Processing

Collections and

Delinquency

Loss Mitigation

Foreclosure and

Bankruptcy

Litigation

Data Processing

MBS/OMF Issuer Information Worksheet Appendix A-2 Associated Task: 2.5 Review Defaulted Issuer information Purpose: To provide the Master Subservicer with issuer information prior to default

MBS/MF Issuer Information Worksheet

Issuer Name Issuer Number

Document Custodian(s) (SF-11715, MF-11722, MH-11726) ? – GNMA to validate

___ Obtain Copy of the Custodian Agreement

Name Location

Contact Person ______ Telephone Number _______________________________________ Name Location

Contact Person ______ Telephone Number

Delinquencies (As of Date )

Days Delinquent # of Loans >90 Total Delinquencies

Bankruptcies Loss Mitigation _____________ Foreclosures

(1 of 4)

MBS/OMF Issuer Information Worksheet (Cont.) (Page 2)

P&I accounts (Forms HUD-11709 and HUD-11709A) – From information provided by the PPA I. Bank Name Bank Location

Contact Person Telephone Number Ginnie Mae I Ginnie Mae II Account number(s)

Approximate Total P&I Funds (Form HUD-11710D) _____________ Bank Cutoff Date _____________________ Does the Issuer have ACH movement of funds capabilities? __________________________ Does the Issuer have wire transfer capabilities? __________________________

If converting with another bank:

II. Bank Name Bank Location

Contact Person _ Telephone Number

Approximate Total P&I Funds (Form HUD-11710D) Bank Cutoff Date Does the Issuer have ACH movement of funds capabilities? _____ Does the Issuer have wire transfer capabilities? _____

(2 of 4)

MBS/OMF Issuer Information Worksheet (Cont.) (Page 3)

T&I accounts (Form HUD-11720) – From information provided by the PPA I. Bank Name Bank Location

Contact Person ________________________________________________ Telephone Number ________________________________________________

Approximate Total T&I Funds (Form HUD-11710D)

Does the Issuer have ACH movement of funds capabilities? _____ Does the Issuer have wire transfer capabilities? _____

II. Bank Name Bank Location

Contact Person ____________________________________________________ Telephone Number ____________________________________________________

Approximate Total T&I Funds (Form HUD-11710D)

Does the Issuer have ACH movement of funds capabilities? _____ Does the Issuer have wire transfer capabilities? _____

III. Bank Name Bank Location

Contact Person ____________________________________________________ Telephone Number ____________________________________________________ Ginnie Mae I Ginnie Mae II Account number(s)

Approximate Total T&I Funds (Form HUD-11710D) Bank Cutoff Date Does the Issuer have ACH movement of funds capabilities? _____ Does the Issuer have wire transfer capabilities? _____

(3 of 4)

MBS/OMF Issuer Information Worksheet (Cont.) (Page 4)

Recent Pools Funded Pool Number

Date Issued

Pools Logged But Not Issued Number of Pools Remaining Principal Balance

The following information should be requested from MBSAA and the PPA as needed:

Number of Ginnie Mae Pools Not Certified Number of Ginnie Mae Pools Final Certified Obtain List of Exceptions

Number of Pools Number of Loans Number of 203K Loans ___________________ ___________________ Remaining Principal Balance (RPB) Number of Security Holders Number of Security Holder Checks (if applicable)

Obtain Pool Listing (Form HUD-11710D) Obtain Exceptions List

# of Pools RPB Single Family Multifamily Manufactured Housing

Total

(4 of 4)

Field Review Contractor (FRC) Issuer Information Worksheet Appendix A-3 Associated Task: 2.5 Review Defaulted Issuer Information Purpose: To provide the master Subservicer with issuer information prior to default

FRC Issuer Information Worksheet

Most Recent FRC Review

TO BE COMPLETED BY THE FIELD REVIEW CONTRACTOR AS REQUESTED BY GINNIE MAE

Issuer Number Corporate Location

Servicing Location

Company Officers (Form HUD-11702) Name Title Tenure

Related Parties Who Are Also Issuers Name Address

Subservicer Are Loans Subserviced? _____ Name Address

Contact Person and Telephone Number

(1 of 5)

FRC Issuer Information Worksheet (Cont.) (Page 2)

Servicing Information Systems Service Bureau

In-House Systems Software

Hardware

Is Company on LAN?

Other Agencies Is the Issuer approved under any other agency program? (FHLMC, FNMA, FHA, VA) _____

Agency Name Current Status of Issuer

Tax Service Does the Issuer Use A Tax Service? Yes No

Tax Service Provider

Contact Name and Phone Number _____________________________________________ In-House Software

Life of Loan Yes No

(2 of 5)

FRC Issuer Information Worksheet (Cont.)(Page 3)

Insurance Contact Name: Phone #:

Fidelity Bond carrier:

Coverage: Term:

Certificate #:

Error and Omissions carrier:

Coverage: Term:

Certificate #:

Contact Name: Phone #:

GNMA Loss Payee Language: Yes No

Legal Relationships Law Firm Relationships for Repossessions, Foreclosure, & Bankruptcy:

Firm Name Firm Phone # Firm Address

Obtain List of Bankruptcy/Foreclosure Attorney Firms

Force Placed Carrier Name Contact Person Address

Phone #

Clearing Account Information I. Bank Name Bank Location Contact Person __________________________ Telephone Number Account number(s) ________________________________

(3 of 5)

FRC Issuer Information Worksheet (Cont.)(Page 4)

Lockbox Account Information I. Bank Name Bank Location

Lockbox Location

Account number(s) Contact Person Telephone Number

II. Bank Name

Lockbox Location

Contact Person Telephone Number

III. Bank Name

Contact Person Telephone Number

IV. Bank Name

Contact Person Telephone Number

What happens to rejected payments in the lockbox accounts?

(4 of 5)

Field Review Contractor (FRC) Issuer Information Worksheet Appendix A-3 Associated Task: 2.5 Review Defaulted Issuer Information Purpose: To provide the master Subservicer with issuer information prior to default

FRC Issuer Information Worksheet (Cont.) (Page 5)

Replacement Reserve and Other FHA Accounts (Multifamily only)

I. Bank Name Bank Location

Account number(s)

II. Bank Name Bank Location

Account number(s) III. Bank Name Bank Location

Account number(s)

IV. Bank Name

Investor Account ? GNMA to validate Number of Pools under Concurrent Date Method (CD) Number of Pools under Internal Reserve Method (IR)

(5 of 5)

Situation Assessment Guide Appendix A-4 Associated Task: 2.6 Perform Situation Assessment Purpose: To provide a guide for GTR/GTM analysts assessing situation prior to defaulting an issuer

PHASE 1, SITUATION ASSESSMENT GUIDE

Purpose: To provide the Ginnie Mae Site Representative with a guide for conducting the situation assessment conference call.

Instruction: The Ginnie Mae Site Representative is to respond to each area defined below prior to the default execution. All steps should be signed and dated by the Ginnie Mae Site Representative as completed. If a specific step is not applicable, please denote in the completion box 'N/A'.

Filing: Ginnie Mae Default File I.

I. Default Execution Logistics. Complete and discuss the following logistical information:

Default Execution Logistics Individual Assigned Date Completed

Default Date

Defaulted Issuer Agency ID

No., if available

Reason for default (e.g.

suspected fraud, non-payment to security holder)

Expected response from the

Defaulted Issuer

Expected impact on issuer’s ability to continue as a going concern

Anticipated duration of site visit

Default execution meeting in issuer’s city

Date: ____________________

Time: ____________________

Location: _____________________________

U.S. Attorney notified? __________________

Situation Assessment Guide Appendix A-4 Associated Task: 2.6 Perform Situation Assessment Purpose: To provide a guide for GTR/OMF analysts assessing situation prior to defaulting an issuer

PHASE 1, SITUATION ASSESSMENT GUIDE (Cont.) (Page 2)

I. Default Issuer Information Individual Assigned Date Completed

During the situation assessment conference call, discuss the issuer information documented on the FRC and MBS/OMF worksheets and the impact on the default execution. Information that should be reviewed includes:

Portfolio Characteristics

Location

Servicing information systems

Tax service

Bank locations

Document Custodian

Warehouse Provider

II. Administrative Issues Individual Assigned Date Completed

During the situation assessment conference call, identify and resolve travel coordination problems.

s

Standard MSS Confirmation Letter Appendix A-5 Associated Task: 2.9.3 Receive MSS Confirmation Letter (Sample) Purpose: To confirm selection of Master Subservicer and inform it of new Ginnie Mae and FHA numbers.

DATE

(Name & Title of President) (Name & Address of Selected MSS)

Dear M__Name of President__________:

This letter confirms Ginnie Mae’s selection of your company on _____Date of Agreement_____, to subservice under the Master Subservicing Agreement dated ____Date of Agreement_____ the Mortgage-Backed Securities pools described as follows:

Approximate Number and Number Defaulted Issuer Pool Balance Type of Pools of Loans Ginnie Mae Issuer No.

The Ginnie Mae number and FHA number to use in your administration of the pools and loans are as follows:

New Ginnie Mae Default No.

Should you need information, please call Ginnie Mae Controller at (202)-xxx-xxxx. For other matters regarding the agreement, please contact (name of Ginnie Mae representative).

Yours truly, (Name of Director Monitoring Division or Vice President OMF) ? GNMA to Validate

Cc: Ginnie Mae Distribution

APPENDIX B (Phase 2)

ISSUER DEFAULT EXECUTION

Site Visit Conduct Guidelines………………………………………………………………...B-1

MSS Default Information Collection Checklist (Form MA)……………………………….B-2

FRC’s Contractor’s Agreed upon Procedures for Default Operations ……….……….. ...B-3

Phase 2 End of Day Assessment Guide………………………………………….………..….B-4

Site Visit Conduct Guidelines Appendix B-1 Associated Task: 3.4.2 Interview Defaulted Issuer’s Staff Purpose: To provide conduct guidelines to default execution team.

SITE VISIT CONDUCT GUIDELINES

Due to the large monetary implications of defaulting a Ginnie Mae issuer, strict rules of conduct must be followed to ensure that the default process is handled both efficiently and effectively while preserving the integrity of Ginnie Mae and the security holders. Compliance with these rules should not be taken lightly. Rules of conduct are necessary to protect Ginnie Mae's best interests and to guarantee the safety of all personnel involved.

Discussion concerning a default decision or upcoming default should be limited to only those personnel who are directly involved in the default.

Outside contractors, such as temporary services and trucking firms, are not to be given detailed information concerning their tasks.

All possible precautions should be taken to ensure the personal safety of all those involved.

The GTR/GTM/OMF analyst and OGC attorney deliver the default letter while the remainder of the default team wait off-site or in the issuer's lobby.

While on the issuer's premises all personnel should act in a highly professional manner to gain the cooperation of the issuer & his/her staff.

Avoid rude or accusatory speech (Remember, issuer's staff may not be aware of the events leading to the default, and may be losing their employment).

Personnel should be honest and forthright in all their communications, both written and oral, but should not compromise Ginnie Mae's position or endanger themselves.

All Personnel must be firm in following Ginnie Mae's guidelines and direction.

Difficult or troublesome questions can be referred to Ginnie Mae headquarters, or OGC attorney.

Top priority should be placed on effectively completing the issuer default as quickly as possible.

Ginnie Mae personnel must assist MSS & FRC whenever possible.

Ginnie Mae personnel should not leave premises until the situation assessment and all action steps defined with parties involved are complete.

Ginnie Mae personnel should not leave important documents and records overnight.

Site Visit Conduct Guidelines Appendix B-1 Associated Task: 3.4.2 Interview Defaulted Issuer’s Staff Purpose: To provide conduct guidelines to default execution team.

Site Visit Conduct Guidelines (Cont.) (Page 2)

Contractor personnel should seek direction from the GTR/GTM Analyst or from the

OGC Attorney, in that order, if they are placed in an unanticipated circumstance.

When law enforcement agencies are involved always include the GTR/GTM analyst in discussions that pertain to the transfer of the defaulted issuer’s Ginnie Mae portfolio.

Ginnie Mae's success requires the public's trust and confidence. All personnel should adhere to the highest standards of professional ethics and should comply with all applicable laws and regulations so as to not endanger that trust.

MSS Default Information Collection Checklist Appendix B-2 Associated Task: 3.4.5 Issuer Default Execution Purpose: To provide each MSS operational area with examples (guidelines) of the types of information to be collected.

MASTER SUBSERVICER'S

DEFAULT INFORMATION COLLECTION CHECKLIST

Each section is completed by a Master Subservicer team member in the corresponding Master

Subservicer operational area.

Issuer Number Date of Default

Mortgagor Cash Receipts Processing

______ Coordinate with the FRC to secure incoming and in-house cash ______ Coordinate with the FRC to secure incoming payments at the lockbox (es)

Including developing an understanding of how exception payments are processed ______ Determine if any Ginnie Mae accounts exist which were not previously identified

Including clearing accounts ______ Compare daily cash receipts processing to on-line bank account information and investigate variances

Custodian and Pools

______ Obtain a list of pools and (if necessary) the pool issuance dates ______ Determine date of cutoff for Ginnie Mae pools ______ Confirm name and address of custodian(s) ______ Determine if all Ginnie Mae pools are final certified ______ Reconcile the number of loans per the servicing system to the number of loans maintained by the document custodian (HUD 11708s) ______ Obtain all mortgage files not at custodian and agree to reconciliation ______ Obtain security holder register and current holder transfer notices from CPTA – (HUD

11714) ______ Determine if security holders’ names and addresses are current

Loans Liquidations (Pay Offs)

______ Determine amount of pay off funds received by the defaulted issuer and verify all funds have been passed through to security holders

______ Determine amount of funds received by the defaulted issuer from FHA and VA claim payments and verify all funds have been passed through to security holders

______ If the MSS discovers that the payment listed above has not been passed through to securities holders or that the defaulted issuer has done anything that will or may cause a loss to Ginnie Mae, the MSS shall notify Ginnie Mae immediately.

Purpose: To provide each MSS operational area with examples (guidelines) of the types of information to be

Banking/Investor Accounting

______ Power of attorney for Default Needs ______ Verify that all P&I and T&I accounts are listed on FRC’s worksheet ______ Obtain all P&I reconciliations ______ Obtain all T&I reconciliations ______ Verify all FHA 203K accounts, and/or other escrow accounts ______ Obtain Ginnie Mae disbursement account reconciliation ______ Secure check registers and trial balances ______ Obtain all bank statements ______ Obtain all clearing account reconciliations ______ Obtain outstanding checks and listing of stale checks (if any) ______ IRS levies or tax withholding information (if any) ______ Obtain all FHA 203K account reconciliations, and/or other escrow accounts ______ Determine number of manual checks produced monthly ______ E&O and/or fidelity bond policy copies or certificates of insurance if not already held by

Ginnie Mae (if applicable)

Loan Administration ______ Provide defaulted issuer with a formatted “good bye/hello” letter to borrowers and observe preparation and mailing ______ Obtain all general servicing files and compare to list of all loans to ensure completeness ______ Obtain information on all assumptions in process & loan situations substitutions (if applicable).

______ Obtain specific data related to ARM loans and GPM loans, including information on how interest rate parameters are tracked and house indexes are used for ARM loans ______ Obtain specific data related to FHA 235, 265, 203K and 246 loans, including how recertification records are maintained ______ List of unrecorded mortgages and contested foreclosures ______ ARM Set-Up data

Escrow Account Processing A. Taxes ______ Determine how current year tax processing will be handled ______ Notify tax service, if applicable, of default ______ Tax payment histories including last tax paid and dollar amount (if applicable) ______ Obtain an open items report by state for all delinquent taxes and unpaid taxes due within 30 days of default ______ Obtain original tax receipts ______ Obtain negative mortgage escrow accounts report and investigate significant amounts ______ Ensure escrow collection for all loans (Set-Up)

(2 of 4)

Purpose: To provide each MSS operational area with examples (guidelines) of the types of information to be

B. Hazard Insurance

______ Determine the number of loans not escrowed for hazard insurance ______ Verify carriers/agents are notified of transfer and payee clause is changed ______ Obtain list of all loans included in the defaulted portfolio ______ Identify loans with expired policies or unpaid premiums ______ Obtain an uninsured properties list ______ Identify loans requiring flood insurance ______ Request information of force placed carriers including current loans carrying such insurance

C. Mortgage Insurance ______ FHA & VA error report with MIP ______ Obtain a list of all loans with FHA and MIP premiums and corresponding case numbers/Life of Loan data ______ List of term/lost FHA/VA - MIP

Collections and Delinquency (Including Loss Mitigation)

______ Obtain aged trial balance ______ Determine loans on payment plans, forbearance and extensions ______ Obtain listing of claims in process but not paid ______ Obtain listing of claim funds received but not processed on servicing system ______ Determine what claims should have been filed and as yet have not been filed ______ Determine current policies for processing claim funds received and claim requests ______ Obtain list of Loss Mitigation files/cases including how many are in which program ______ Gather Loss Mitigation hard copy files/cases ______ Obtain list of program names and start date

Foreclosure and Bankruptcy

______ Notify attorneys and trustees of change in servicer and obtain list of attorney vendors ______ Obtain a list of active bankruptcies by delinquency, type, attorney, court, and status ______ Request foreclosure and bankruptcy history files ______ Obtain tape files or hard copies of foreclosure, bankruptcy and/or repossessions tracking system ______ Obtain all unpaid invoices on foreclosed properties ______ Inquire of paid invoices not filed in foreclosure file (3 of 4)

Purpose: To provide each MSS operational area with examples (guidelines) of the types of information to be

A. Single Family

______ Determine the number of loans not escrowed for hazard insurance ______ Verify carriers/agents are notified of transfer and payee clause is changed ______ Obtain list of all loans included in the defaulted portfolio ______ Identify loans with expired policies or unpaid premiums ______ Obtain an uninsured properties list ______ Identify loans requiring flood insurance ______ Request information of force placed carriers including current loans carrying such insurance

B. Manufactured Housing

______ Obtain a list of all loans with FHA and MIP premiums and corresponding case numbers

C. Multifamily – GNMA to validate

______ Obtain a list of all loans with FHA and MIP premiums and corresponding case numbers

Default Services Other (Loss Mitigation , Claims and Litigation)

______ Obtain aged trial balance ______ Determine loans on payment plans, forbearance and extensions ______ Obtain listing of claims in process but not paid ______ Obtain listing of claim funds received but not processed on servicing system ______ Determine what claims should have been filed and as yet have not been filed ______ Determine current policies for processing claim funds received and claim requests ______ Obtain list/copy of litigation case files including attorney contacts

Data Processing

______ Determine amount of pay off funds received by the defaulted issuer and verify all funds have been passed through security holders

______ Determine amount of funds received by the defaulted issuer from FHA and VA claim payments and verify all funds have been passed through to security holders

______ If the MSS discovers that the payment listed above has not been passed through to securities holders or that the defaulted issuer has done anything that will or may cause a loss to Ginnie Mae, the MSS shall notify Ginnie Mae immediately.

______ Obtain tape files or hard copies of foreclosure, bankruptcy and/or repossessions tracking system

______ Obtain all unpaid invoices on foreclosed properties ______ Inquire of paid invoices not filed in foreclosure file ______ Obtain list of REOs and Property Preservation cases/files

Phase 2 FRC Agreed Upon Procedures for Default Operations Appendix B-3 Associated Task: 3.5.1 Execute Default Purpose: To guide the GTR/GTM analyst in types of key financial information collected during onsite visit.

FIELD REVIEW CONTRACTOR’S

AGREED UPON PROCEDURES FOR DEFAULT OPERATIONS

Note: Paragraphs I through VIII are included in this manual to provide the MSS with general information on the role of the FRC in the default.

I. Issuer Policies

Using the information contained in the most recent compliance review, interviews with issuer management and information gathered at default, obtain an understanding of the issuer's policies as defined below:

A. Funding and recovery of Principal and Interest advances.

B. Funding and recovery of Tax and Insurance advances.

C. Funding Test of Expected Principal & Interest shortfalls.

D. Funding of Reconciliation of Mortgage Collateral to Securities.

E. Use and recovery of Excess Funds.

F. Overview of cash management system including an overview flowchart.

G. FHA and VA claim process.

H. Loan liquidation process and funding.

II. Portfolio Reconciliation

A. Prepare a portfolio balance sheet as of the default date. If the cutoff accounting reports are produced by the issuer at the default date the following journal entries are required:

1. Record the amount due from mortgagors and the amount due to security holders and investors;

2. Record the amount of tax and insurance funds on hand and the associated liability to mortgagors;

3. Record the amount of principal and interest collections; and

4. Record the amount of multi-family Reserve for Replacement (RFR) and FHA special escrow funds on hand and the associated liability to mortgagors.

B. If cutoff accounting reports are not produced by the issuer at the default date, the following journal entries are required to roll forward the balance sheet from the month end date to the date of default.

(1 of 6)

Purpose: To guide the GTR/GTM analyst in types of key financial information collected during onsite visit.

FIELD REVIEWCONTRACTOR'S

1. Record principal collections (information source: bank credits to P&I accounts and Issuer's internal daily cash collection reports);

2. Record interest collections (information source: bank credits to P&I accounts and Issuer's internal daily cash collection reports);

3. Record interest due security holders related to Default Issuer payments which remain uncollected at Location ___________________(information source: daily cash collections reports and Issuer's trial balance as of the month end prior to the default date);

4. Record tax and insurance funds collected (information source: bank credits to T&I accounts and Issuer's daily cash collection reports);

5. Record tax and insurance payments (information source: issuer's internal escrow disbursement records and debits to the T&I bank account);

6. Record remittance to security holders (information source: issuer prepared from HUD

11710D);

7. Record corporate advances made by Issuer (information source: issuer's internal records and credits to the P&I or P&I Disbursement Account bank statement);

8. Record advances recovered by Issuer (information source: issuer's internal records and debits to the P&I or P&I Disbursement Account bank statement);

9. Record shortages in T&I and P&I bank accounts as of the default date;

10. Record RFR and FHA Special Escrow collections (information source: Issuer’s daily cash collection reports and credits) to the RFR and FHA Special Escrow bank account

11. Record RFR and FHA Special Escrow payments (information source: Issuer's internal disbursement records and debits) to the RFR and FHA Special Escrow bank accounts);and

(2 of 6)

Purpose: To guide the GTR/GTM analyst in types of key financial information collected during onsite visit.

FIELD REVIEWCONTRACTOR'S

12. Record amount of RFR and FHA Special Escrow used to offset issuer advances without

HUD approval (information source: Issuer's internal records and debits to the RFR and

FHA Special Escrow bank accounts);

III. Ginnie Mae Cash Accounts

A. Inquire and document defaulted issuer's procedures relative to incoming funds.

Establish procedures to monitor the receipt of funds subsequent to the default date that ensure Ginnie Mae portfolio monies received are properly forwarded to the

MSS, including allotment payments by mortgagors.

B. Determine the amount of outstanding checks drawn on Ginnie Mae cash accounts as of the default date. Establish procedures with the banks and Ginnie

Mae to clear checks drawn on the Ginnie Mae accounts subsequent to the default date.

C. Obtain the reconciliations or reconcile the Principal and Interest custodial bank account(s) and the Tax and Insurance custodial bank account(s) for the month end prior to the default date. Verify the mathematical accuracy and the propriety of the information included on the bank reconciliations. Additionally, obtain and review the bank statements for the selected months.

D. Obtain interim bank statements for the principal and interest and tax and insurance custodial bank accounts as of the default date and reconcile the bank accounts as of the default date.

E. For the two month period immediately preceding the default date through the default date, obtain the records, including dates and amounts, supporting the following transactions:

-All P&I advances made by the defaulted issuer

-All reimbursements t o the defaulted issuer

F. Obtain a list of net principal and interest cash book balances by Ginnie Mae pool for pools sharing the same custodial bank account as of the month end prior to the default date.

(3 of 6)

Purpose: To guide the GTR/GTM analyst in types of key financial information collected during onsite visit.

G. Obtain the net unrecovered corporate advances that are included in the custodial bank account as of the month-end prior to the default date.

H. Reconcile the sum of the net principal and interest cash book balance, by Ginnie Mae pool, net unrecovered corporate advances, and "other" funds for all pools sharing the custodial accounts to the ending reconciled book balance as of the month end prior to the default date.

I. Determine the amount of unprocessed cash due to Ginnie Mae (e.g., FHA/VA claim checks not deposited, mortgagor payments received at the issuer location, etc.).

IV. Loan Trial Balance

A. Obtain a trial balance of all mortgages still in pools (all pools separately) as of the month end prior to the default date.

B. For the month end prior to the default date, agree the following balances from the

HUD Form 1171ODs to the Joan trial balance noting reconciling amounts:

Total number of loans;

Principal balance of mortgages; and

Fixed installment control

V. FHA and VA Claims

As needed for each claim or sales proceed received in the last six months:

1. Agree the amount to form HUD 1171OA or HUD 1171 OE.

2. Trace amount into the Principal and Interest custodial bank account.

3. Verify that the first claim check or sales proceeds was either used with corporate advances to liquidate the loan from the pool or passed through as additional principal.

VI. Multifamily Procedures

A. Obtain from the Issuer a listing of the RFR and FHA special escrow bank accounts or certificates of deposit related to escrow established at loan closing and the Issuer's internal records reporting escrow account balances.

(4 of 6)

Purpose: To guide the GTR/GTM analyst in types of key financial information collected during onsite visit.

FIELD REVIEW CONTRACTOR'S

B. Obtain the reconciliations or reconcile the RFR and FHA special escrow bank account(s) for the month end prior to the default date. Verify the mathematical accuracy and the propriety of the information included on the bank reconciliations. Additionally, obtain and review the bank statements for the selected months.

VII. Chronology

A. Maintain a chronology of the major events and meetings concerning the default.

VIII. Improper Activities

A. Identify any suspected improper illegal or negligent activity by the defaulted

Issuer.

B. Determine whether any activities by the defaulted issuer may cause losses to

Ginnie Mae.

C. Immediately report any findings pursuant to A or B above to Ginnie Mae.

(5 of 6)

Purpose: To guide the GTR/GTM/OMG analyst in types of key financial information collected during on-site visit.

K Phase 2 End of Day Assessment Guide Appendix B-3 Associated Task: 3.7 Participate in End of Day Assessment Purpose: To guide the AMD/OMG analyst in conducting the end of day assessment during the site visit.

FIELD REVIEW CONTRACTOR'S

UNAUDITED DEFAULTED PORTFOLIO BALANCE SHEET AS OF DATE OF DEFAULT

Month-End Prior to Default Balance

(DR/(CR)

Roll Forward Collections & Disbursements

Date of Default Balance

DR/(CR)

Assets:

Custodial Cash

Principal and Interest Tax and Insurance

Total Custodial Cash

Mortgages Receivable Repossessions Inventory Mortgage Insurance Claims All Other Loans

Total Mortgages Receivable

Delinquent Interest Due from Mortgagors

Amount of Principal & Interest Collections Due Custodial Account from Issuer

Total Assets

Liabilities:

Principle Due Security Holders

Date of Default Post Date of Default

Interest Due Security Holders Date of Default Post Date of Default

Amount Due Mortgagors for Tax & Insurance

Issuers Advances Eligible for Recovery (1)

Amount Due Issuer for Over Collateralization

Total Liabilities

Notes

1. Amounts eligible for recovery upon satisfaction of following conditions:

Ginnie Mae collects amount of principal & Interest collections due to Custodial Account from Issuer Delinquent principal and interest is collected from mortgagor or FHA through the claims process Recovery will be limited to amount actually collected from mortgagor or FHA

(6 of 6)

Phase 2 End of Day Assessment Guide Appendix B-4 Associated Task: 3.7 Participate In End of Day Assessment Purpose: To guide the GTR/GTM analyst in conducting the end of day assessment during the site visit.

PHASE 2, END OF DAY ASSESSMENT GUIDE

Purpose: To define procedures followed by the GTR/GTM analyst during default execution.

Instructions: The GTR/GTM analyst responds to each area defined below prior to leaving the issuer’s premises. All steps should be signed and dated by the GTR/GTM analyst as completed. If a specific step is not applicable, please denote in the completion box ‘N/A’. If additional procedures should be completed based on the responses to Sections I through IV, reference the specific step to Section V and add procedures therein.

Filing: GTR/GTM default file 1.

Issuer Name: Prepared by:

GTR/GTM/OMF

I. Default Execution Administration INITIALS DATE

A. Verify all default letters have been delivered

1. Issuer default letter

2. Subservicer notice of default letter

3. Bank letter

4. Document custodian letter

B. Verify that the following parties are cooperating

With the MSS and the FRC, as needed:

1. Issuer Management

2. Issuer Staff (in areas defined in section IIA)

3. Banks

4. Lockbox processor and/or post office

5. Document custodian

6. Service bureau

7. Tax service

8. Subservicer

9. Warehouse Lenders

C. Determine that there are sufficient issuer personnel or other resources onsite to complete all Phase 2 functions

D. If there is insufficient personnel noted in C., above, ensure that the MSS is obtaining the necessary resources

E. If a second Ginnie Mae default team is on site, Coordinate activities with this team (1 of 2)

Phase 2 End of Day Assessment Guide Appendix B-4 Associated Task: 3.7 Participate In End of Day Assessment Purpose: To guide the GTR/GTM analyst in conducting the end of day assessment during the site visit.

PHASE 2, END OF DAY ASSESSMENT GUIDE

GTR/GTM

II. Monitor the MSS INITIALS DATE

Discuss with the MSS the information obtained In each of the following areas and identify issues.

A. Insurance Document Control B. Loan Administration C. Escrow Account Processing D. Foreclosure and Bankruptcy E. Litigation F. Data Processing G. Mortgagor Cash Receipts Processing H. Banking /Investor Accounting I. Collections and Delinquency (BK/FC & Loss Mit.)

III. Time Requirements

Identify the estimated onsite completion date of the following parties.

A. GTR/GTM analyst

B. OGC

C. FRC ______

D. MSS

IV. Servicing Irregularities

A. Identify any servicing irregularities

Comments

B. Determine potential loss to Ginnie Mae C. Report to proper entity

(e.g. Ginnie Mae Management, OGC, HUD-I.G., U.S. attorney).

V. Additional Procedures Required

(2 of 2)

APPENDIX C (Phase 3)

PORTFOLIO TRANSFER AND INTEGRATION

Sample “Goodbye/Hello” Letter…………………………………………………………..C-1

Allotment Notification Letter…………………………………………………………… ..C-2

MSS Assessment of Default Execution………………………………………. …………..C-3

Summary of MSS Reporting Requirements……………………………………………....C-4

“Goodbye/Hello” Letter (Sample) Appendix C-1 Associated Task: 4.6 Process Borrower Letters Purpose: To instruct customer that servicing of loan is being transferred from defaulted Issuer to MSS.

SAMPLE “GOODBYE/HELLO” LETTER

Note: This sample letter is not mandatory. If the MSS has a similar form letter, they may use it.

Please note wording can be coupons and/or statements. (To be Completed on MSS’s Letterhead)

Customer Name Customer Address RE: Account#: XXXXXXX

Dear Customer:

Date: XXXXXX, XX, 20XX

The servicing of your loan, that is the right to collect payments from you, is being assigned, sold or transferred from Defaulted Issuer to MSS effective XXXXXXX, XX, 20XX. MSS will be responsible for such things as collecting payments, paying your property taxes and homeowners insurance, issuing billing statements and preparing year-end statements. MSS welcomes you as a valued customer, and anticipates the transfer of the loan servicing to be completed smoothly.

Notice of Assignment, Sale, or Transfer of Servicing Rights

The transfer of servicing of your mortgage loan does not affect any term or condition of the mortgage instruments, other than directly related to the servicing of your loan. Except in limited circumstances, the law requires that your present servicer send you this notice at least 15 days before the effective date of transfer, or at closing.

Your Present Servicer

Your present servicer is Default Issuer. If you have any questions relating to the transfer of servicing from Defaulted Issuer, call their Customer Service, toll-free at X-XXX-XXX-XXXX, between X:XXa.m. and XX:XX p.m. Central Time Monday through XXXXXX – XXXXXXX. .

Your New Servicer Contact and Payment Remittance Address

Your new servicer will be MSS. The address to send payments and correspondence is:

XXXXXXXXXXXXXXXXXXXX. The toll-free telephone number for MSS is X-XXX-XXX-XXXX. If you have any questions relating to the transfer of servicing to your new servicer, call MSS Customer Service, toll-free at X-XXX- XXX-XXXX. Please write your MSS loan number on all checks and correspondence and have your number available when you call.

Information Concerning Your Payments

The date that Defaulted Issuer. will stop accepting payments from you is XXXXX, XX, 20XX. If you have forwarded a payment to Defaulted Issuer. after this date, your payment should be endorsed by them and sent to MSS. The date that your new servicer, MSS, will start accepting payments from you is XXXXXX, XX, 20XX. Send all payments on or after that date to MSS. MSS will send you new billing statements. If you have a payment due before you receive your new billing statement, write your MSS account number on your check and mail it to MSS at the payment address shown above. Please note that your account information is subject to change to reflect disbursements that are made by, and payments that are due to, your prior lender. If you are currently making payments through a third party (e.g.

government allotment or bill pay service), it is your responsibility to make arrangements to have the payee including address and loan number information changed to MSS.

MSS looks forward to having you as a new customer. If we can assist you in any way, please do not hesitate to contact us using the appropriate toll-free telephone number above.

Very truly yours, Allotment Notification Letter (Sample) Appendix C-2 Associated Task: 4.6.4 Notify Borrowers to Change Allotments Purpose: To instruct borrower to request change in designee of allotment.

ALLOTMENT (Military) NOTIFICATION LETTER Note: This sample letter is not mandatory. If the MSS has a similar form letter, they may use it. (To be Completed on MSS’s Letterhead)

Customer Name Customer Address RE: Account#: XXXXXXX

Dear Customer:

Date: XXXXXX, XX, 20XX

The servicing of your loan, that is the right to collect payments from you, is being assigned, sold or transferred from Defaulted Issuer to MSS effective XXXXXXX, XX, 20XX. MSS will be responsible for such things as collecting payments, paying your property taxes and homeowners insurance, issuing billing statements and preparing year-end statements. MSS welcomes you as a valued customer, and anticipates the transfer of the loan servicing to be completed smoothly.

Notice of Assignment, Sale, or Transfer of Servicing Rights The transfer of servicing of your mortgage loan does not affect any term or condition of the mortgage instruments, other than directly related to the servicing of your loan. Except in limited circumstances, the law requires that your present servicer send you this notice at least 15 days before the effective date of transfer, or at closing.

Your Present Servicer Your present servicer is Default Issuer. If you have any questions relating to the transfer of servicing from Defaulted Issuer, call their Customer Service, toll-free at X-XXX-XXX-XXXX, between X:XXa.m. and XX:XX p.m. XXXXXl Time Monday through XXXXXX – XXXXXXX. .

Your New Servicer Contact and Payment Remittance Address Your new servicer will be MSS. The address to send payments and correspondence is:

XXXXXXXXXXXXXXXXXXXX. The toll-free telephone number for MSS is X-XXX-XXX-XXXX. If you have any questions relating to the transfer of servicing to your new servicer, call MSS Customer Service, toll-free at X- XXX-XXX-XXXX. Please write your MSS loan number on all checks and correspondence and have your number available when you call.

Information Concerning Your Payments The date that Defaulted Issuer. will stop accepting payments from you is XXXXX, XX, 20XX. If you have forwarded a payment to Defaulted Issuer. after this date, your payment should be endorsed by them and sent to MSS. The date that your new servicer, MSS, will start accepting payments from you is XXXXXX, XX, 20XX.

Send all payments on or after that date to MSS. MSS will send you new billing statements. If you have a payment due before you receive your new billing statement, write your loan account number on your check and mail it to MSS at the payment address shown above. Please note that your account information is subject to change to reflect disbursements that are made by, and payments that are due to, your prior lender. If you are currently making payments through a third party (e.g. government allotment or bill pay service), it is your responsibility to make arrangements to have the payee including address and loan number information changed to MSS.

If you are currently making payments through a third party (e.g. government allotment or bill pay service), it is your responsibility to make arrangements to have the payee including address and loan number information changed to MSS.

MSS looks forward to having you as a new customer. If we can assist you in any way, please do not hesitate to contact us using the appropriate toll-free telephone number above.

Very truly yours, MSS Assessment of Default Execution Appendix C-3 Associated Task: 4.9.2 Participate in GTR Assessment of Default and Initial Review of Portfolio Purpose: To document observations made by the MSS’s default team throughout the default process.

MSS

ASSESSMENT OF DEFAULT EXECUTION

Issuer Name:

Issuer Number:

Default Date:

Prepared by:

Review by:

Purpose: The purpose of this Assessment is to document observations made by the Master Subservicer’s default team throughout the default process. The Assessment will be reviewed by the anchor, and analyst to enhance their understanding of issues encountered during the default and will be used in improving the efficiencies of future defaults.

Instructions: The Master Subservicer is to respond to each area defined below subsequent to the completion of the identified phase.

Filing: File 1 – Issuer default file, Section I.

Phase 1:

1. Discuss adequacy of defaulted issuer information received prior to default.

2. Discuss communication issues encountered within your default team and with Ginnie Mae and the Field Review Contractor.

3. Discuss travel/coordination issues encountered within your default team and with Ginnie Mae and the Field Review Contractor.

Phase 1 (cont’d)

4. Discuss other pre-default issues observed and not identified above.

5. Discuss significant issues identified during default execution within the following areas:

A. Mortgagor Cash Receipts Processing:

B. Security Holder Services:

C. Banking:

D. Loan Administration:

E. Escrow Account Processing (Taxes, Hazard Insurance, and Mortgage Insurance):

(2of 4)

Phase 2 (cont’d)

F. Collections and Delinquency:

G. Foreclosure and Bankruptcy:

H. Litigation:

I. Data Processing:

6. Discuss your team’s execution of the default.

7. Discuss other onsite default issues observed and not identified above.

(3 of 4)

Phase 3

8. Discuss issues relative to the reconciliation of the defaulted portfolio.

9. Discuss significant issues raised in the initial portfolio conversion report and their final disposition.

10. Discuss other post-default issues observed and not identified above.

MSS Reporting Requirements to Ginnie Mae Appendix C-4 Associated Task: 4.10 Continue Ongoing Servicing Purpose: MSS submits to Ginnie Mae special reports depending upon type of portfolio as described in the MSS servicing agreements.

MSS REPORTING REQUIREMENTS TO GINNIE MAE

Single Family Pool Loans Reporting Form Due Date

SFPR-1 Ginnie Mae-I Monthly Advance Status Form by Defaulted Issuer

2nd business day prior to the 15th calendar day

SFPR-2 Ginnie Mae – II Monthly Advance Status Form by Defaulted Issuer

2nd business day prior to the 20th calendar day

SFPR-3 Summary of Escrows Held on Ginnie Mae MBS Pooled Loans 5th calendar day

SFPR-4 Summary of Principal and Interest Account on Ginnie Mae MBS Pooled Loans

5th calendar day

SFPR-5 Detailed Report of Escrow Shortfall on Ginnie Mae MBS Pooled Loans

5th calendar day

Single Family Acquired Properties

SFAP-1 Inventory of Single Family Acquired Properties 5th business day

SFAP-2 Activity Report on Ginnie Mae Acquired Single Family Properties by Defaulted Issuer

5th business day

SFAP-3 Detailed Purchases Report on Ginnie Mae Single Family Properties by Defaulted Issuer

5th business day

SFAP-4 Detailed Sales Report on Ginnie Mae Single Family Properties by Defaulted Issuer

5th business day

SFAP-5 Summary of Escrows Held on Ginnie Mae Single Family Acquired Properties by Defaulted Issuer

5th business day

SFAP-7 Detailed Transfers Report on Single Family Acquired Properties by Defaulted Issuer

5th business day

Single Family Whole Loans

SFWL-1 Inventory of Single Family Whole Loan Portfolio 5th business day

SFWL-2 Activity Report on Ginnie Mae Single Family Whole Loan Portfolio by Defaulted Issuer

5th business day

SFWL-3 Detailed Purchases Report on Ginnie Mae Single Family Whole Loans by Defaulted Issuer

5th business day

SFWL-4 Detailed Sales Report on Ginnie Mae Single Family Whole Loans by Defaulted Issuer

5th business day

SFWL-5 Summary of Escrows Held on Ginnie Mae Single Family Whole Loans 5th business day

SFWL-6 Delinquency Reports on Ginnie Mae’s Whole Loans – Single Family Portfolio

5th business day

SFWL-7 Detailed Transfers Report on Family Whole Loans Properties by Defaulted Issuer

5th business day

SFWL-8 Detailed Modifications on Single Family Whole Loans Properties by Defaulted Issuer

5th business day

SFWL-9 Accrued Interest Walkforward Report on Single Family Whole Loans Properties by Defaulted Issuer

5th business day

SFWL-

Payments

Detail Payment Information on Single Family Whole Loans 5th business day

MSS REPORTING REQUIREMENTS TO GINNIE MAE

Single Family Foreclosure Form Due Date

SFFL-1 Inventory of Single Family Foreclosure Loan Portfolio 5th day of the month 10th calendar day

SFFL-2 Activity Report on Ginnie Mae Single Family Foreclosure Loans by Defaulted Issuer

5th business day

SFFL-3 Detailed Purchases Report on Ginnie Mae Single Family Foreclosed Loans by Defaulted Issuer

5th business day

SFFL-4 Detailed Conveyances Report on Single Family Foreclosure Loans by Defaulted Issuer

5th business day

SFFL-5 Summary of Escrows Held on Ginnie Mae MBS Foreclosure Loans by Defaulted Issuer

5th business day

SFFL-6 Detailed Outstanding Claim Receivable Report on GNMA Single Family Acquired Properties

5th business day

SFFL-7 Summary Claims Receivables on Ginnie Mae Foreclosure Loans by Defaulted Issuer

5th business day

SFFL-8 Delinquent Report on Ginnie Mae’s Foreclosure Loans – Single Family Portfolio

5th business day

SFFL-9 Detailed Transfers Report on Single Family Foreclosure Properties by Defaulted Issuer

Single Family Short Sales Form Due Date

SFSS-1 Detailed Short Sale Report on Ginnie Mae Single Family Properties by Defaulted Issuer

5th business day

SFSS-2 Activity Report on Ginnie Mae Single Family Foreclosed Loans by Defaulted Issuer

5th business day

SFSS-3 Detailed Purchase Report on Single Family Foreclosure Loans by Defaulted Issuer

5th business day

SFSS-5 Summary of Escrows Held on Ginnie Mae MBS Foreclosured Loans

5th business day

SFSS-7 Detailed Transfers Report on Single Family Short Sale Properties by Defaulted Issuer

CONTACT YOUR GTR/GTM FOR MULTIFAMILY & MANUAFCTURED HOUSING

REPORTING REQUIREMENTS TO GINNIE MAE

This is the final page of the contract document.