ATTACHMENT_A.docx

Closing Agent Services Fort Worth, Texas DU208WR-13-R-0001

ATTACHMENT A

CLOSING AGENT SERVICES

PERFORMANCE WORK STATEMENT (PWS)

TABLE OF CONTENTS

DESCRIPTION / SPECIFICATIONS / WORK STATEMENT

1. BACKGROUND

1.1. Single Family Mortgage Insurance Program. The Federal Housing Administration (FHA), an organizational unit within the United States Department of Housing and Urban Development (HUD), administers the Single Family Mortgage Insurance Program. Upon default and foreclosure of an FHA insured loan, the lender files a claim for insurance benefits. In exchange for payment of a claim, a lender conveys a foreclosed property to HUD. HUD, through its Field Service Manager (FSM) and Asset Manager (AM) contractors, manages and sells a sizable inventory of single family homes in a manner that promotes home ownership opportunities, preserves communities, and maximizes monetary return to the FHA insurance fund. To complete the sales of the properties, HUD utilizes the services of Closing Agent Contractors (referred to as “Contractor” hereafter) to perform closing activities on its behalf.

1.2. Interaction / Impact. Performance under this contract will involve interaction with homebuyers and their representatives in the real estate community, mortgage lenders, non-profit housing and advocacy organizations, staff from HUD’s Home Ownership Center, and service providers under contract to HUD such as the FSM and AM contractors. Additionally, this contract may be impacted by changes in regulation, legislation, or housing policy initiatives identified by the White House or the Secretary of HUD.

1.3. Performance-based Contract. This contract will follow a performance based contracting (PBC) approach, whereby HUD establishes the performance standards to be met in this Performance Work Statement (PWS). The Contractor is responsible for meeting or exceeding those standards.

2. SCOPE OF REQUIREMENTS

2.1. Purpose.

2.1.1. This is a fixed unit rate contract with a single unit price per completed property closing, title search and recordation service.

2.1.2. The Contractor shall proactively work with HUD’s FSM and AM contractors, any successor contractors, the GTR and the GTM, and HUD’s Mortgagee Compliance Management (MCM) contractor, to ensure closings are performed timely.

2.1.3. The Contractor shall meet or exceed the performance standards specified in this contract.

2.1.4. All costs are included in the fixed unit price for property closing services (CLINs 0001, 2001, 3001 and 4001) unless otherwise specifically identified in this contract, including, but not limited to:

2.1.4.1. The completion of all documents necessary to close the transaction as well as the cost to complete all financing documents when requested by the buyer or lender to complete the loan portion of the transaction,

2.1.4.2. The cost of phones,

2.1.4.3. Postage,

2.1.4.4. Shipping (including closed files to storage),

2.1.4.5. Delivery costs,

2.1.4.6. Courier costs,

2.1.4.7. Express mail,

2.1.4.8. Faxing,

2.1.4.9. Scanning,

2.1.4.10. Transportation,

2.1.4.11. Notary fees,

2.1.4.12. Document reproduction,

2.1.4.13. Postage pre-paid envelopes,

2.1.4.14. Wire transfer fees,

2.1.4.15. Document recording fees for documents on behalf of HUD

2.1.4.16. Annual reconciliation report costs,

2.1.4.17. Title search costs (see Paragraph 4.2.3.),

2.1.4.18. ACA documents (see paragraph 4.4.2.) and

2.1.4.19. Office requirements

2.1.5. The Contractor shall not receive reimbursement or other payment for any expenses related to cases that fail to close.

2.1.6. If a case fails to close, and a subsequent sales contract is signed for the same property, the property will be assigned back to the Contractor in accordance with the applicable or agreed upon minimums and maximums of this contract.

2.2. Objectives. The primary objectives of this contract are to ensure that:

2.2.1. HUD’s interests are proactively represented during the escrow and sales closing process;

2.2.2. Each transaction is closed as soon as possible after signing of the sales contract;

2.2.3. Closings are performed timely and conveniently for all buyers;

2.2.4. HUD funds received are accurately and timely provided to the U.S. Treasury after closing;

2.2.5. Closings are accomplished with error-free closing documents; and,

2.2.6. The deed is properly recorded in the buyer’s name and filed with the correct Clerk and Recorder’s office.

2.2.7. Closings are performed in accordance with all applicable federal, state and local laws and are conducted in a manner customary to the area.

2.3. Results and Outputs. The Contractor’s performance under this contract shall ensure:

2.3.1. Closings are fully and accurately completed in the shortest time frame possible, but no later than the date specified in the sales contract unless an extension of time to close has been approved by the AM or closing agent GTR;

2.3.2. HUD funds, in the proper amount, are immediately transferred via wire transfer to the U.S. Treasury;

2.3.3. Internal quality control processes identify and correct errors in processing requirements; and,

2.3.4. Deeds are promptly and accurately recorded.

3. DEFINITIONS AND ACRONYMS – For purposes of this contract, the following definitions and acronyms shall apply:

ACCEPTABLE QUALITY LEVEL (AQL) - The level of performance required of the Contractor in order for its performance to be considered acceptable. Performance falling below the AQL will result in disincentives being assessed to the Contractor. Payment of disincentives is not a relief of the requirement to perform and continued non-performance may result in contractual remedies. Deficient, or superior, performance may also be noted in the official evaluation of Contractor’s performance.

AFFILIATE - Any firm or individual in which the Contractor, any of its principal officers, managers or staff, or immediate family members of such have any identity of interest. This would include, but is not limited to, interests through investment, common ownership, joint venture, subcontracting relationship, or familial relationship.

ASSET CONTROL AREA (ACA) – An agreement between HUD and a local county or state government or approved nonprofit organization to purchase HUD-owned properties and future HUD property acquisitions in an established area.

ASSIGNED CLOSING – A sales transaction for which the Contractor has received an executed copy of the Sales Contract (HUD-9548) from the AM or other entity designated by HUD.

BANKING DAY - The part of a day on which a bank is open to the public for carrying on substantially all of its banking functions.

BUSINESS DAY – Any calendar day which is not a Saturday, Sunday or recognized federal holiday.

CLOSING or SALES CLOSING – The meeting at which the real estate transaction covered by the HUD-9548 sales contract, or other sales document, signed by HUD and a purchaser is completed, including: (1) execution or delivery (or both) of all necessary documentation (in proper form) to effect the transfer of title, (2) funding of the purchase price, and (3) disbursement of all proceeds in accordance with the HUD-1 settlement statement.

CLOSING AGENT – Coordinates a variety of activities necessary for completing the sale of single family real estate and ensures that all documents and records are completed properly for the transfer of ownership of a property. Ensure related funds are properly collected and disbursed.

CONTRACTING OFFICER (CO) - A HUD official with the authority to enter into, administer, and terminate contracts and make related determinations and findings.

CONTRACT SPECIALIST (CS) - The individual that will oversee all administrative actions in conjunction with the contract.

DAY – Unless otherwise specified in the contract, a calendar day. If the day ending a designated period of time falls on a Saturday, Sunday, or recognized federal holiday, then the time period shall end on the next business day.

FHA - Federal Housing Administration.

GEOGRAPHIC AREA – Area defined in paragraph 1 of this contract.

GOVERNMENT FISCAL YEAR – October through September GTM - Government Technical Monitor.

GTR - Government Technical Representative.

HUD - U.S. Department of Housing and Urban Development. The terms “Department of Housing and Urban Development”, “Department”, “HUD”, “Seller” and “Government” shall be synonymous and may be used interchangeably in this contract.

IDENTITY OF INTEREST – An individual, corporation, partnership, joint venture, limited liability company, or other entity directly or indirectly controlling or controlled by or under the direct or indirect common control with the Contractor. This includes one in which the owners, managers, principal officers, or staff have any familial relationship with the owners, managers, principal officers, or staff of the Contractor.

KEY PERSONNEL - The Contractor’s on-site contract manager and alternate contract manager responsible to oversee document preparation and closings conducted by the Contractor pursuant to this contract, the person responsible for contract performance by the Contractor and anyone who may make decisions on that person’s behalf (e.g. President, Legal Assistant, etc.).

METHOD OF SURVEILLANCE - The inspection methods the Government will use to monitor and evaluate the Contractor’s performance in meeting the performance requirements.

MORTGAGEE COMPLIANCE MANAGER (MCM) - The vendor responsible for performing a variety of pre- and post-property conveyance services on behalf of HUD, including title review and approval for the transfer from the mortgagee to HUD.

NLT – Not Later Than OFFICE - A place of business, located within the boundaries of the geographical area covered in the contract, which is adequately staffed and equipped to perform all of the requirements of the contract.

P260 - HUD’s current web based system to monitor, track and document REO property movement from pre-acquisition through post close.

PERFORMANCE STANDARD - The performance requirement for each listed service to which the Contractor is required to perform.

SELLING BROKER – An individual that is approved and authorized by HUD to sell HUD homes.

SELLING AGENT-A Real estate agent or Realtor in the employment of a Selling Broker SERVICE REQUIREMENT - The primary performance requirements specified in the PWS. Only those requirements deemed to be most important are listed with an established standard.

SUBCONTRACTOR - A supplier, distributor, vendor, or firm that furnishes supplies or services to or for the Contractor, or another of Contractor’s subcontractors, in the performance of the contract.

TABLE FUNDED - All funds in the transaction are received and disbursed at time of closing.

TITLE SEARCH - A written report that indicates the status of a tract of real property. This report must be produced by a reputable individual, attorney or firm specializing and trained in searching public records.

4. TASKS AND DELIVERABLES

4.1. Task 1: General Requirements.

4.1.1. Perform closings of HUD-owned properties as quickly as possible, but no later than 5 business days of receipt of notification for a closing from the purchaser, their real estate broker, or lender. Normally, a purchaser is allowed from 30 to 60 calendar days to close the transaction.

4.1.1.1. From time to time, HUD may offer special incentive programs to homebuyers to close in a shorter period of time, such as 15 days after contract signing.

4.1.1.2. The Contractor shall coordinate with the AM to accomplish the closing within the allotted time frame unless an extension is necessary due to circumstances outside of its control.

4.1.2. Perform closings timely and conveniently for all buyers.

4.1.3. The Contractor shall obtain a Name Address Identification (NAID) number issued by HUD. Any payments made to the contractor under its NAID shall be made by Electronic Funds Transfer (EFT) into the Contractor’s banking account as identified in the System for Award Management.

4.1.4. Office and Contract Manager.

4.1.4.1. Within 30 days of award,the Contractor shall establish and maintain a fully staffed, equipped, and supplied office in the geographic area of the contract and provide all necessary facilities and ON SITE supervision to perform the real estate closing services required in this PWS.

4.1.4.2. The Contractor shall take proper health and safety precautions to protect workers, the public and the property of others.

4.1.4.3. The Contractor shall maintainoffice hours from 9:00 AM to 5:00 PM local time Monday through Friday, with the exception of recognized Federal holidays.

4.1.4.4. The Contractor shall provide a contract manager who shall be responsible for the performance of the work and an alternate contract manager who shall act for the Contractor when the manager is absent. The contract manager and the alternate shall be onsite during normal hours of operation.

4.1.4.4.1. The name and contact information, including phone number(s) and email address, of the contract manager and alternate contract manager shall be designated in writing and provided to the CO and GTR within 10 days of contract award.

4.1.4.4.2. The contract manager or alternate shall be available during normal working hours to meet with HUD staff to discuss problems or issues and shall have full authority to act for the Contractor on all contract matters relating to the daily operations of the Contractor in its performance of this contract.

4.1.5. Licenses, Insurance, Certifications and Permits.

4.1.5.1. The Contractor shall obtain any and all necessary licenses, insurance, certifications, and permits (Licenses) required for the performance of the contract, whether required by law, practice or otherwise, and comply with any federal, state, county, municipal and local laws, codes and regulations and restrictions applicable to its performance under this contract. The Contractor shall provide a copy of all current Licenses to the GTR and CO not later than 5 days following the Contractor’s receipt of notice that it has been awarded the contract.

4.1.5.2. The Contractor shall keep all such licenses, insurance, certifications and permits current and in good standing throughout the term of this contract. The Contractor shall provide a copy of all renewals or updates of, or replacements for, such items to the GTR and the CO or designee NLT 10 days of receipt of such changes by the contractor.

4.1.5.3. There will be no extensions or waivers for performance under this contract for failure to have all licenses required by the terms of this contract.

4.1.5.4. The GTR, CO or designee has the right to request a copy of any license at any time during the duration of the contract.

4.1.5.5. The contractor must provide notification to the GTR and CO or designee of any changes in licenses, insurance, certifications and permits required by any federal, state, county, municipal and local law, codes, regulations or restrictions that conflict with HUD requirements NLT one day after discovery by the contractor. The Contractor shall include with its notice all pertinent information regarding the conflict.

4.1.6. HUD Escrow (Trust) Account.

4.1.6.1. The Contractor shall establish a non-interest bearing escrow account for all sales proceeds, including earnest money deposits, extension fees, loan proceeds, and purchaser’s funds presented in a settlement/closing (Escrow Account) NLT 5 days after award of this contract.

4.1.6.2. The Escrow Account shall be in the name of the Contractor with the restriction: “As Trustee for the U.S. Department of Housing and Urban Development.”

4.1.6.3. The Contractor shall establish the Escrow Account at a bank which at all times:

4.1.6.3.1. Maintains commercial standards for its internet security system, as defined by Article 4 of the Uniform Commercial Code, including, but not limited to, multifactor authentication, a layered security program, and access to the e-Fraud network; and,

4.1.6.3.2. Complies with the Federal Financial Institutions Examination Council (FFIEC) issued guidance for internet banking.

4.1.6.4. The Contractor shall ensure that the bank:

4.1.6.4.1. Establishes and enforces a restricted funds transfer recipient list for the Escrow Account naming HUD only; and,

4.1.6.4.2. Verifies with the Contractor the validity of any individual Escrow Account transaction exceeding $150,000.00.

4.1.6.5. The Contractor shall implement and comply with the bank’s current internet security protocols. The Contractor shall provide to the GTR a copy of the bank’s Internet security protocols upon establishment of the Escrow Account and any changes to the protocols within three days of the Contractor’s receipt of notice of any such change.

4.1.6.6. The Contractor shall use a dedicated computer for access to the Escrow Account. The computer used to access the Trust Account shall:

4.1.6.6.1. Conform to current industry standards for devices used for electronic funds transactions;

4.1.6.6.2. Not be used for any other purpose;

4.1.6.6.3. Not be connected to any other computer system or network, including those of the Contractor.

4.1.6.7. The Contractor shall conduct a risk assessment of its systems and controls for access to the Escrow Account at least quarterly and provide the results of these assessments to the GTR within ten days of completing each assessment.

4.1.6.8. The contractor and or the bank will notify the GTR or Contracting Officer immediately but no later than 24 hours upon notification or identification of any attempted unauthorized access to the HUD escrow account.

4.1.6.9. All distributions of funds related to property closings shall be made from this account.

4.1.6.10. The cost of maintaining and operating the Escrow Account is at the expense of the Contractor.

4.1.6.11. The Escrow Account shall be used only for purposes of this contract.

4.1.6.12. In the event the Contractor has multiple contracts with HUD, the Contractor shall ensure that a separate escrow account is maintained for each contract and shall not co-mingle funds among contracts.

4.1.6.13. The Escrow Account shall be established at a bank that gives credit for deposited funds immediately upon clearance, and has the capacity to transmit all of the information contained in the SAMS-1103.

4.1.6.14. The Contractor shall enter into a letter agreement with the bank at which the Escrow Account is established that upon demand by HUD the account shall be re-titled into HUD’s name. The letter agreement shall use the format specified at Attachment F.

4.1.6.14.1. NLT 10 days after issuance of the pre-award notice that it is the apparently successful offeror or notice of award, whichever occurs sooner, the Contractor shall deliver to the:

4.1.6.14.1.1. CO or designee a copy of the letter agreement in the form of the sample letter agreement at Attachment F; and,

4.1.6.14.1.2. GTR the bank signature card for the account for the signature of HUD’s representatives.

4.1.6.15. The GTR shall be granted Internet access to the Escrow Account for monitoring purposes.

4.1.6.16. The Contractor shall incorporate a six month stale-date on all checks written on the Escrow Account.

4.1.6.17. The Contractor shall be the sole custodian of the HUD Escrow Account. The Contractor may not subordinate Escrow Account responsibilities or allow account access to its affiliates or subcontractors.

4.1.6.18. If at any time the Contractor is unable to continue compliance with these requirements, the Contractor shall immediately notify the GTR or GTM and the CO or designee. Such notification shall include proposed actions and a timeline to achieve compliance.

4.1.6.19. The Contractor shall retain its entire bank records related to the Escrow Account, including, but not limited to deposit slips and monthly bank statements, and shall deliver a copy to the GTR or to CO or designee upon request. The Contractor shall retain its entire bank records related to the Escrow Account, including, but not limited to deposit slips and monthly bank statements. The Contractor shall deliver a copy of the monthly bank statement to the GTR within three days of the bank making the statement available to the Contractor and to the CO or designee within three days of request. The Contractor shall deliver a copy of other records related to the Escrow Account to the GTR or to the CO or designee within three days of request.

4.1.6.20. As soon as possible following termination or expiration of this contract, but no later than 90 days following such action the Contractor shall close the Escrow Account and deliver to the CO or designee a bank check for the balance in the account along with an appropriate reconciliation of all funds covered by said bank check, including a copy of the final bank statement showing a zero balance in the account, unless an extension of such time is approved in writing by the CO.

4.1.6.21. During the course of the contract, the Escrow Account shall not be changed or moved without the prior written approval of the CO or designee.

4.1.6.22. NLT 15 days after the 1st of each month, the Contractor shall

4.1.6.22.1. Reconcile HUD’s Escrow Account for previous month’s activities

4.1.6.22.2. Certify the reconciliation; and

4.1.6.22.3. Provide certification to the GTR.

4.1.7. Quality Control (QC) Plan. The Contractor shall establish and maintain a QC plan, acceptable to HUD, to ensure the requirements of the contract are accomplished as specified. The Contractor shall deliver its proposed QC plan to the GTR and CO or designee NLT than five days after receipt of the pre-award notice or notice of award, whichever is sooner. The Contractor shall deliver its final QC plan NLT five days after receiving HUD’s comments to the draft plan. The Contractor shall deliver proposed changes to the plan at least 14 days prior to the effective date of the proposed change. The QC Plan shall include, at a minimum:

4.1.7.1. Identification of the tools the Contractor will use to ensure all requirements are completed and time frames are met.

4.1.7.2. A QC review system covering all of the service requirements listed on the Performance Requirements Summary and specifying:

4.1.7.2.1. The requirements to be reviewed on either a scheduled or unscheduled basis;

4.1.7.2.2. How often reviews will be conducted;

4.1.7.2.3. Topics of the reviews;

4.1.7.2.4. How many or what percentage of cases will be reviewed;

4.1.7.2.5. Actions that will be taken to ensure deficiencies will not reoccur;

4.1.7.2.6. The title of the individual(s) who will perform the reviews;

4.1.7.2.7. Documentation of the results of each review, including corrective action taken when reviews reveal deficiencies; and

4.1.7.2.8. How records of all reviews conducted by Contractor will be maintained.

4.1.7.2.9. The location of Records, to include electronic records shall be maintained to ensure availability to HUD personnel throughout the term of the contract. If the contractor maintains electronic records it shall allow HUD’s GTR, GTM and CO unrestricted access to all files.

4.1.7.2.10. The method for selecting responsible subcontractors and monitoring their performance to ensure only quality work is being performed. Records related to subcontractors shall include copies of actual or proposed subcontract agreements, including all required FAR clauses that will flow down to the subcontracts.

4.1.7.3. At a minimum, the Contractor’s internal control measures shall ensure that:

4.1.7.3.1. Case files and file documents are managed and controlled to prevent any loss of documents;

4.1.7.3.2. Funds received and paid out are appropriately, properly and timely managed and case files are reconciled timely;

4.1.7.3.3. Deeds are delivered to the proper government entity for recording within the required time frame;

4.1.7.3.4. Conflicts of interest are prevented or eliminated;

4.1.7.3.5. High customer service standards are maintained at all times;

4.1.7.3.6. Staffing levels are always maintained with sufficient, qualified personnel to perform required duties;

4.1.7.3.7. The potential for, fraud, waste, or abuse of funds received and disbursed in the performance of the contract are prevented or eliminated;

4.1.7.3.8. Its computer systems and networks, are protected from unauthorized access, and alteration, including an Internet security plan for the Escrow Account and computer network; and,

4.1.7.3.9. All closing documents, including HUD-1s, are timely and accurately prepared.

4.1.8. Management Work Plan (MWP): The Contractor shall provide the CO or designee and GTR with a written management work plan for all tasks specified in this contract not later than 30 days after the effective date of the contract and any revisions to the MWP not later than the effective date of the amendment. The MWP shall be revised as circumstances dictate to reflect changes during the progress of the contract The MWP shall include, at a minimum,

4.1.8.1. A detailed description of resources allocated to, and time scheduled for, accomplishment of each task and deliverable to be provided under the contract;

4.1.8.2. A detailed work flow chart reflecting the processes and steps the assigned cases would follow which clearly reflect the Contractor’s strategy for:

4.1.8.2.1. Timely completion of case assignments and

4.1.8.2.2. How work deadlines shall be met, including how adjustments in staffing and workload shall be made when there are fluctuating levels of case assignments.

4.1.9. Records Maintenance.

4.1.9.1. Throughout the entire life of the contract the Contractor shall maintain a system of record keeping that will ensure documents, whether hard copy or electronic are:

4.1.9.1.1. Properly and promptly filed upon receipt;

4.1.9.1.2. Not lost or misplaced;

4.1.9.1.3. Easily and promptly retrieved as required by the GTR, GTM or CO or designee. Hard Copy records and Electronic records shall available NLT 1 day from receipt of request and;

4.1.9.1.4. Maintained with complete confidentiality, with access limited to only authorized employees of the Contractor, its subcontractors, and HUD’s Management, GTR, GTM and CO or designee.

4.1.9.2. NLT 90 days after the close of each Government fiscal year and the expiration or termination of the contract, the Contractor shall prepare all closing files from the fiscal year completed and store them at Contractor’s expense for a period of three years after contract expiration. The contractor shall provide the GTR with the physical location of stored closing files. HUD shall have access to all records upon request. Copies of all files shall be electronically stored and a data retrieval device provided to the GTR. In accordance with record retention requirements of each State, but not less than 3 years, all records shall be destroyed, maintaining confidentiality of all data. At a minimum, all records shall include the following documents:

4.1.9.2.1. Proof of deposits for the Escrow Account;

4.1.9.2.2. Proof of wire transfer of proceeds to the U.S. Treasury;

4.1.9.2.3. Copies of checks for disbursement (each check shall include the property address, FHA case number, and notation of type of expense);

4.1.9.2.4. Copies of each document related to the closing performed.

4.1.10. Subcontracting. The Contractor shall ensure that any subcontractor providing services on its behalf has been approved in writing by the CO or designee prior to the subcontractor beginning any such performance, either through identification in the technical proposal submission or by separate written notification.

4.1.10.1. The written identification or notification shall completely disclose the services to be provided by the subcontractor and the fee arrangements under which the subcontractor is to be paid for services provided under this contract. A copy of the subcontractor agreement with the contractor will be provided upon written request.

4.1.10.2. The subcontractor shall not have a negative performance history or have been or be suspended or otherwise prohibited from doing business with the Federal Government.

4.2. Task 2: Pre-closing Activities. The Contractor shall perform all pre-closing actions, including, but not restricted to, those detailed below, which are necessary to ensure the closing occurs within the sales contract or executed extension timeframes.

4.2.1. Open Closing/Escrow File. The Contractor shall establish a closing/escrow file immediately upon receipt of a complete and executed contract package from the AM. No action shall be taken until a complete package is received, except as provided in paragraph 4.2.2 below. A complete contract package shall include:

4.2.1.1. A signed sales contract (HUD-9548) with any addenda and amendments;

4.2.1.2. Earnest money (may be sent separately but must be received by the contractor within 3 days of receipt of the executed contract);

4.2.1.3. Documentation regarding the status of any rents due to HUD when the purchaser is an approved HUD’s tenant; and

4.2.1.4. Bulk Sales listing (if applicable).

4.2.2. If the Contractor does not receive the earnest money within three days after receipt of the signed sales contract, on the 4th day it will:

4.2.2.1. Return the contract to the appropriate AM with a notation “No Earnest Money Received-Escrow File closed;” and

4.2.2.2. Notify in writing the GTR or GTM.

4.2.3. Title Search.

4.2.3.1. The Contractor shall order a title search and upload the resulting report into P260 no later than seven days after receiving a complete and executed contract package from the AM or HUD;

4.2.3.2. The Contractor shall send an email to the AM that the title search has uploaded to P260 on the same day that it performs the upload.

4.2.3.3. The Contractor shall clear all routine title issues (such as title not in HUD’s name or tax liens, although these examples are not meant to be all-inclusive), in such a manner as to avoid any delays in closing. Routine title issues are those that can normally be resolved within seven working days. The Contractor shall immediately refer to the AM all title issues the Contractor is unable to resolve within seven days and provide the GTR with a copy of the notification.

4.2.3.4. Major title defects that are not routine in nature shall be forwarded in writing to the AM NLT one day after the Contractor learns of the title defect. The Contractor is not required to perform any curative work on non-routine title matters.

4.2.3.5. The Contractor shall immediately consult with the GTR or GTM if any federal government interests are discovered in the title search.

4.2.4. Written Notification. The Contractor shall deliver written notifications as required below.

4.2.4.1. Not later than two days after receiving the complete contract package from the AM or HUD, the Contractor shall deliver a notification package of contract receipt to the purchaser and selling agent.

4.2.4.1.1. The cover letter to the package shall include:

4.2.3.1.1.1. A notification of assignment;

4.2.3.1.1.2. The FHA case file number;

4.2.3.1.1.3. The name of the escrow officer;

4.2.3.1.1.4. The latest possible closing date; and

4.2.3.1.1.5. A request for the establishment of a firm closing date.

4.2.4.1.2. The package shall also include a letter to the purchaser notifying the purchaser that:

4.2.4.1.2.1. HUD does not require the purchaser to obtain title insurance as a condition of the purchase;

4.2.4.1.2.2. If the purchaser opts to obtain title insurance, the purchaser may elect to purchase title insurance from any firm offering such insurance; and

4.2.4.1.2.3. Selecting a firm other than the Closing Agent from which to purchase title insurance will not cause any delays in the closing.

4.2.4.1.3. The package shall also include a notice to the purchasing and selling broker requiring the purchasing and selling broker to obtain a signed acknowledgement from the purchaser as to whether or not title insurance is desired, and, if so,

4.2.4.1.3.1. The identification of the title company the purchaser will use.

4.2.4.1.3.2. A statement advising that this acknowledgement must be returned to the Closing Agent no later than 10 days from receipt by the purchasing and selling broker.

4.2.4.1.4. The Contractor shall facilitate all communications with the title company selected by the purchaser, selling agent, or lender.

4.2.4.2. Not less than ten calendar days prior to the latest possible contract closing date, the Contractor shall deliver to the purchasing and selling broker written notification if a firm closing date has not yet been established. A copy of the notification shall be electronically forwarded to the AM on the same day.

4.2.4.3. If no closing has occurred or extension request been approved, the Contractor shall, on the first day after the closing date stated on the contract,

4.2.4.3.1. Notify the selling agent/broker in writing that the sale did not close and direct the broker to the AM for additional instructions.

4.2.4.3.2. Electronically forward a copy of the notification to the AM and FSM through P260.

4.2.4.3.3. Forward to the AM any earnest money which Contractor had received pertaining to the sale on the 4th business day after expiration of the contract.

4.2.5. Deed and Closing/Escrow Instructions.

4.2.5.1. The Contractor shall notify the AM and FSM of the closing date by:

4.2.5.1.1. Uploading an accurate pre-closing package into P260; and,

4.2.5.1.2. Sending an email notification to the AM and FSM advising of the anticipated closing date and time.

4.2.5.2. The pre-closing package shall include:

4.2.5.2.1. Special Warranty Deed with correct legal description;

4.2.5.2.2. HUD-1 and signature affidavits, with a separate seller paid closing cost itemization;

4.2.5.2.3. Seller’s affidavit (if applicable);

4.2.5.2.4. Copy of earnest money check;

4.2.5.2.5. Contractor’s identification and explanation of any invoices that require payment (hard copy of invoices to be included with post-closing package);

4.2.5.2.6. Copies of Extension Fee payments, if applicable;

4.2.5.2.7. If applicable, a copy of Good Neighbor Next Door (GNND) documents, entirely and correctly completed; and,

4.2.5.2.8. Any other documentation requested by the GTR or AM.

4.2.5.3. The AM is prohibited from executing deeds more than five days prior to the actual date of closing. The AM will electronically approve and return the HUD-1and overnight deliver the signed deed back to the Contractor.

4.2.6. Rental Monies. If the purchaser is a HUD tenant the Contractor shall:

4.2.6.1. Verify with the FSM that all rental monies due HUD have been paid outside settlement.

4.2.6.2. If any amounts due have not been paid, ensure such payment is made at time of closing.

4.2.7. Extension Requests. The Contractor shall administer and process broker requests for extensions of the sales closing date within 1 day of receipt of a complete extension request package.

4.2.7.1. Such requests may only be accepted via the Closing Extension Request form, which shall include:

4.2.7.1.1. All required supporting documentation, and

4.2.7.1.2. The full non-refundable fee, in the form of cash, cashier’s or certified check, wire, or money order.

4.2.7.2. No extension shall be processed without the extension funds unless prior written approval has been provided by the AM, GTR, GTM. .

4.2.7.3. Not more than one day after receipt of the request, the Contractor shall

4.2.7.3.1. Upload to P260 the extension request form, all supporting documentation, and proof of extension fee payment for the AM review and,

4.2.7.3.2. Deposit the extension funds to the Escrow Account.

4.2.7.3.3. Send an email notification to the AM after the upload is completed.

4.2.7.4. If the extension request is approved by the AM, the Contractor shall, not later than one day after receiving notification of approval, notify the selling broker of the approval.

4.2.7.5. If the extension request is approved by the AM and the fee is waived, the Contractor shall refund the extension fee to the purchaser or remitting party no later than one day after receiving notification of approval and fee waiver.

4.2.7.6. If the extension request is denied by the AM, the Contractor shall refund the extension fee to the purchaser or remitting party not later than one day after the Contractor receives notification of the denial.

4.2.7.7. If an extension to the closing is required due to Contractor’s actions, or lack of actions, as determined by the GTR, the Contractor shall:

4.2.7.7.1. Pay the extension fee by depositing the fee into the Escrow Account no more than one day after receipt of the GTR’s determination and provide evidence to the GTR or GTM of the deposit.

4.2.7.7.2. If an extension fee payment has been remitted to the Contractor on behalf of or buy the purchaser in conjunction with this extension request, refund such payment to the remitter not more than one day after receipt of the GTR’s determination.

4.2.8. Preparation of the HUD 1. Accurate preparation of the HUD-1 is critical to timely processing. The Contactor shall:

4.2.8.1. Prepare the HUD-1 in final form for approval by the AM;

4.2.8.2. Use an automated closing process software package designed to minimize errors to complete the HUD-1;

4.2.8.3. Prepare the HUD-1 to facilitate a full and complete closing, including all required disbursements, collections, and deposits, at the time of closing;

4.2.8.4. Retain a copy of the HUD-1 that has been approved by the AM as well as pre-HUD 1’s that were submitted to the AM but not approved, if applicable, in the actual case file;

4.2.8.5. Ensure that all expenses charged to HUD are accurate and in accordance with HUD’s requirements as described in Housing Notice 2009-4, or subsequent policy guidance, and

4.2.8.6. Reimburse HUD for any unauthorized expenditures charged to HUD, as determined by the GTR, not more than one day following receipt of the GTR’s determination by submitting to the GTR or GTM a check, along with a copy of the GTR’s determination.

4.2.8.7. Provided that the sale closes prior to the expiration of the extension, credit a daily prorated portion of the extension fee, based on the number of calendar days remaining on the extension, to the amount due from the purchaser at closing.

4.2.8.7.1. The full amount of the fee shall be reflected on lines 104 and 404 of the HUD-1.

4.2.8.7.2. Any credited portion shall be reflected on lines 206 and 506.

4.2.9. Cancelled or expired contract/closing. If a contract is cancelled or fails to close, the Contractor shall:

4.2.9.1. NLT one day following cancellation or failure to close, electronically notify the AM and FSM and place a copy of this electronic notice in the actual case file and upload a copy to the P260 system.

4.2.9.2. NLT the second day following cancellation or failure to close:

4.2.9.2.1. Mark VOID in large letters across the front of the original signed deed, include date and name of individual taking the action,

4.2.9.2.2. Upload the voided deed to P260; and,

4.2.9.2.3. Mail the original document marked VOID to the AM contractor.

4.2.9.2.4. If directed in writing by the GTR or GTM, forward the earnest money deposit and applicable extension fees to the purchaser.; otherwise,

4.2.9.2.4.1. The AM contractor for disposition or as subsequently directed in writing by the GTR.

4.3. Task 3: Closing Activities.

4.3.1. The Contractor shall conduct the actual closing, which may include Task 4: Special Program closings (Section 4.4), at an acceptable office location, convenient to the buyer.

4.3.2. Purchasers, at purchaser’s expense, may at all times be represented by their own advisors, attorneys or lender and may choose their own closing agent to represent their interests or their lender’s interest in the transaction. Should a buyer elect to retain independent representation, the Contractor or its subcontractor shall fully perform and represent HUD’s interests in accordance with the requirements of this contract.

4.3.3. The Contractor or its subcontractor must be physically present at every closing.

4.3.4. The closing shall be completed timely and accurately. At the closing, the Contractor or subcontractor shall perform all required actions, including the following:

4.3.4.1. Obtain signatures on the HUD-1 Settlement Statement affidavit/certification.

4.3.4.2. Collect recording fees from the purchaser for any lender/purchaser documents requiring recordation in the closing process of each individual property. If the buyer’s closing agent is present to close the financial side of the transaction, the buyer’s closing agent shall record the lender purchaser documents at the purchasers’ expense.

4.3.4.3. The Contractor shall facilitate the recording of the deed conveying the property from HUD to the purchaser and shall not permit any other entity, other than its subcontractor, to record the deed.

4.3.4.4. The Contractor’s unit fee includes recordation of any HUD documents requiring recordation, including, but not limited to, the deed conveying title from HUD and the GNND Second Mortgage/Deed of Trust, and any Land Use Restriction Deed;

4.3.4.5. Table fund all closings;

4.3.4.6. The Contractor shall disburse at the time of settlement and closing any allowable expenses due and payable at the time of settlement in accordance with the provisions of HUD’s requirements as described in Housing Notice 2009-4 or subsequent policy guidance; and,

4.3.4.7. The Contractor shall pro-rate and pay or credit to the buyer, at time of closing, any unpaid property taxes, HOA fees, utilities, or other applicable charges for the current year through the date of settlement.

4.3.4.8. In the event that the proceeds from the sale are insufficient to pay all approved disbursements required from the actual settlement/closing, the Contractor shall pay such expenses or required disbursements and submit an invoice in accordance with paragraph 8.3 of the contract for reimbursement.

4.4. Task 4: Special Programs. All closing requirements are to be performed as stated above except as specified below.

4.4.1. Good Neighbor Next Door (GNND) program:

4.4.1.1. The Contractor shall be familiar with HUD’s GNND program, its requirements, and shall obtain a copy of and adhere to the requirements in Notice 99-30 plus any updates or subsequent revisions.

4.4.1.2. To qualify to purchase a home through the GNND, a participant must agree to execute a Second Mortgage/Deed of Trust and Note in the name of HUD. The Contractor shall:

4.4.1.2.1. Prepare and deliver the GNND program purchaser a Second Mortgage/Deed of Trust and Subordinate Note to be executed at closing.

4.4.1.2.2. Ensure that the Second Mortgage/Deed of Trust and Subordinate Note conform to state requirements per the instructions contained in Appendix III of HUD Handbook 4165.1, REV-1, CHG-3, and any updates.

4.4.1.2.3. The Contractor shall, not more than one day following the closing, deliver to the proper recording office the Second Mortgage/Deed of Trust for recording. The recording instructions shall instruct the recorder’s office to return the recorded Second Mortgage/Deed of Trust to the Contractor.

4.4.1.2.4. The Contractor shall, within three days of receipt, mail the original second mortgage/Deed of Trust to the AM contractor at its office location

4.4.1.2.5. The Contractor shall include a copy of the signed GNND Second Mortgage/Deed of Trust, the original Subordinate Note, the original executed HUD 9549-A, B or C, as applicable to the purchaser, and HUD 9549-E with original signatures in the post-closing package (Section 4.5.4).

4.4.2. Asset Control Area (ACA). For properties covered under an ACA Agreement, the terms of the closing shall be governed by the local ACA agreement.

4.4.2.1. The Contractor shall attend ACA implementation meetings in order to be briefed on the ACA contents and ascertain additional closing requirements if any.

4.4.2.2. NLT five days following any such meeting, the Contractor shall advise the GTR in writing of any unique ACA processing requirements and, upon obtaining GTR concurrence, shall perform those additional duties without additional compensation.

4.4.2.3. For properties covered under an ACA agreement during the acquisition period, the Contractor shall provide purchaser with a “Closing Notice.”

4.4.2.3.1. The Closing Notice shall be delivered to the purchaser at least ten days before the closing date.

4.4.2.3.2. The Closing Notice shall include, but is not limited to:

4.4.2.3.2.1. The closing date, which shall be the day the listed properties are scheduled to be transferred to the purchaser;

4.4.2.3.2.2. A list of the properties that are to be conveyed on that closing date;

4.4.2.3.2.3. For each property, the:

4.4.2.3.2.3.1. Purchase price

4.4.2.3.2.3.2. Other costs due from purchaser on the closing date, including the prorated taxes;

4.4.2.3.2.3.3. An unsigned deed; and

4.4.2.3.2.3.4. The HUD-1 (closing statement) for each property.

4.4.2.4. The Contractor shall designate a specific day of the week for closing these sales.

4.4.2.5. The Contractor’s unit fee includes the cost of document preparation and, if applicable, the recording of:

4.4.2.5.1. The deed,

4.4.2.5.2. Any applicable security documents that name seller as the secured party,

4.4.2.5.3. The HUD-1 closing statement, and,

4.4.2.5.4. Any other document requested by HUD.

4.4.2.6. The purchaser is responsible for all other closing costs, including lender recording fees and other costs, related to the purchaser’s acquisition of the property.

4.4.2.7. The Contractor shall, not more than one day following the closing, deliver to the proper recording office for recording the Deed and any applicable security documents that name seller as the secured party. The recording instructions shall instruct the recorder’s office to return the recorded documents to the Contractor.

4.4.2.8. Not more than one day following receipt of the actual recorded documents from the recorder’s office, the Contractor shall:

4.4.2.8.1. Forward the original documents to the AM contractor; and,

4.4.2.8.2. Maintain recordation information in the Closing Agent file.

4.5. Task 5: Post-closing Activities. The Contractor shall perform all necessary post-closing activities, including, but not limited to, those below to ensure HUD is able to accurately and timely reconcile the closing. The Contractor shall retain copies to verify completion of each task in the Closing Agent file for the property.

4.5.1. Verification of Closing. The same day that the closing takes place, complete the “actual closing date” field in the P260 portal and send an email notification to the AM and FSM contractors.

4.5.2. Wire Proceeds. The Contractor shall wire the net sales proceeds to the U.S. Treasury via FEDWIRE using the information contained on the SAMS-1103, Request to Transfer Funds, NLT one banking day after the closing.

4.5.3. Deliver the Deed for Recordation. Not later than one day after the closing has taken place, the Contractor shall:

4.5.3.1. Deliver the deed for legal recordation in the correct county; and,

4.5.3.2. The file shall contain evidence of the delivery of the deed.

4.5.4. Provide written notification to all taxing authorities and the Homeowners Association, as applicable, of the sale NLT one business day following the sale.

4.5.5. Upload the Post Closing Package into P260. Not more than three days after the closing is completed, the Contractor shall:

4.5.5.1. Upload the completed post closing package into P260. A post closing package shall include:

4.5.5.1.1. The original HUD-1

4.5.5.1.2. A copy of the signed note and mortgage documents;

4.5.5.1.3. A copy of the fully executed transfer of proceeds wire confirmation;

4.5.5.1.4. Evidence from the recording entity that the deed was delivered for recordation or a recorded copy;

4.5.5.1.5. A copy of all applicable invoices or receipts of disbursements;

4.5.5.1.6. Disbursement ledger for all closed cases; and,

4.5.5.1.7. GNND or ACA documents, if applicable.

4.5.5.2. Notify the AM and FSM contractor via email.

4.5.6. Errors.

4.5.6.1. Not later than two days after written notification from the GTR, the Contractor shall:

4.5.6.1.1. Correct any errors or make necessary adjustments to the settlement statement as requested by the AM contractor and approved by the GTR after the settlement. No changes shall be made after closing without prior approval by the GTR.

4.5.6.1.2. The same day the corrections are made, the Contractor shall upload a copy of any corrected documents into P260.

4.5.6.1.2.1. The corrected HUD-1 shall be clearly marked “corrected”, and,

4.5.6.1.2.2. Any payment shall be designated as “POC” on the corrected HUD 1 for paid outside of closing.

4.5.6.1.3. In the case of an under wire of closing funds, the Contractor shall wire the additional sale proceeds to the U.S. Treasury via FEDWIRE using the information contained on the SAMS-1103, Request to Transfer Funds not more than one day following identification of the underwire.

4.5.6.1.4. In the case of an over wire of closing funds, the Contractor shall immediately coordinate with the GTR for reimbursement.

4.5.6.2. Requests for reimbursement of post-closing disbursements shall be delivered to the GTR for approval and authorization. All submissions to the GTR shall be uploaded in P260 with a confirmation email sent to the GTR NLT one day following discovery of the need for reimbursement.

4.5.6.2.1. The request for reimbursement package shall include:

4.5.6.2.1.1. An invoice on the Contractor’s letterhead describing why the payment after closing is required, and why the item was not paid at closing;

4.5.6.2.1.2. The supporting statement/invoice from the entity (e.g., taxing authority, utility company, HOA) to be paid

4.5.6.2.1.3. Completed SAMS-1106; and,

4.5.6.2.1.4. Any other documentation HUD determines is needed to substantiate the request.

4.5.6.2.2. Not more than two days following the approval of the request for reimbursement, the Contractor shall mail copies of the approval email, final HUD-1, and Contractor’s check to the billing entity, if applicable, along with the documentation specified in paragraph 3.5.6.2.1, to the HOC for processing. The contractor shall scan and deliver a copy of the invoice to the GTR to be followed by hard copy.