ESBD_File_350516_332-RFP24-1004 Master Servicer RFP ESBD draft.docx

Texas Department of Housing and Community Affairs

Request for Proposals 332-RFP24-1004 for Master Servicer By Texas Department of Housing and Community Affairs

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TABLE OF CONTENTS

EXHIBIT H TDHCA’s POOL PURCHASE HISTORY CY23...........................................................................................Separate Document

EXHIBIT I Commitment Lot Rate Notice Separate Document

PART I

GENERAL INFORMATION

1.1 Introduction

The Texas Department of Housing and Community Affairs ("TDHCA") was created pursuant to Chapter 762, Acts of the Seventy-second Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to increase the supply of affordable housing for low- and moderate-income Texans. The Bond Finance Division of TDHCA issues tax-exempt and taxable bonds as well as other alternative types of funding to finance single-family housing.

TDHCA is governed by a six-member Board appointed by the Governor with the advice and consent of the Senate serving staggered six-year terms with the terms of three directors expiring on January 31 of each odd-numbered year. Members may be re-appointed.

As a result of this RFP, the Department anticipates executing a contract with the Successful Respondent to perform the Services and the contract, if any, resulting from it (the “Contract”). The time and number of Contracts resulting from this RFP and all procedures relating to such Contracts are within the discretion of the Department. Successful Respondent, as an independent contractor, shall provide Services under the Contract, at its facilities and with its own personnel.

1.2 Background

TDHCA’s Single Family Mortgage Loan Program (the “Program”) provides first and second lien mortgage loans to low and moderate income homebuyers through the My First Texas Home Program (“MFTH”) and the My Choice Texas Home Program (“MCTH”). Mortgage loans are originated through Participating Lenders and must be Federal Housing Administration (“FHA”) insured, Rural Housing Service (“RHS”) guaranteed, Veterans Affairs (“VA”) guaranteed, or insured by private mortgage guaranty insurance and eligible for securitization into Ginnie Mae, Fannie Mae, or Freddie Mac Certificates (collectively, Mortgage-backed Security “MBS”). First lien mortgage loans originated through the Program are referred to herein as Mortgage Loans. Second lien mortgage loans originated through the Program are referred to herein as DPA Loans.

While TDHCA has historically used single family mortgage revenue bonds (“SFMRBs”) to finance the Program, since October 2012, TDHCA has used a to-be-announced (TBA) program (better known as “TMP-79”) as the primary financing mechanism. The TBA Provider for TMP-79 is Hilltop Securities.

Mortgage Loans originated through the Program can be combined with a mortgage credit certificate (“MCC”); the rate for Mortgage Loans combined with an MCC is slightly higher than the rate for Mortgage Loans that do not receive an MCC.

TDHCA intends to continue using TMP-79 as the primary financing mechanism for the Program, plans to continue issuing SFMRBs as market conditions permit, and reserves the right to implement alternative financing structures when feasible.

1.3 Definitions and Acronyms

· Department. Texas Department of Housing and Community Affairs.

· CT. Central Time.

· Fiscal Year. The State of Texas and TDHCA’s fiscal year that begins on September 1 and ends on August 31.

PART II

SCOPE OF WORK

2.1 Service Description

The Successful Respondent shall provide services as described in this Section and in compliance with all requirements of this RFP and the Contract. Any deviations from these specific requirements must be approved by the Department and the Successful Respondent in writing that specifically refers to the requirement and the reason for approval of the deviation. The Department will consider approving written requests for such deviations if the Department determines, in its sole discretion, that such deviations are consistent with applicable law and in the best interests of the Department. Further, any decrease in the level of services must be accompanied by a decrease in approved fees. All services must be provided at a highly competitive fee level, i.e., at a fee level that will provide the best value to the Department when all evaluation criteria are considered. The Department reserves the right, in its sole discretion, to enter into preliminary negotiations with more than one of the top Respondents. The Department may choose to award this solicitation to more than one respondent.

The Successful Respondent must be qualified and able to provide all of the services required by the Department.

This Request for Proposals (“RFP”) applies to single family homeownership programs implemented through TDHCA’s Texas Homeownership Division, including the My First Texas Home Program, the My Choice Texas Home Program, and other single family programs implemented during the contract period.

TDHCA intends to select one Master Servicer through this RFP.

A. General Description of Program Mechanics

Mortgage Loans and Down Payment Assistance (DPA) Loans are originated by Participating Lenders and sold to the Master Servicer. The Master Servicer pools the Mortgage Loans into MBS that are delivered by the Master Servicer as directed by either TDHCA or the TBA Provider, and services all Mortgage Loans and all DPA loans.

Currently, TDHCA provides DPA for almost all Mortgage Loans originated through the Program. DPA Loans are 0% interest, non-amortizing second mortgages with a 30-year term which are due on sale or refinance. TDHCA intends to continue providing DPA in this manner, but reserves the right to provide DPA in the form of grants, amortizing second liens, forgivable second liens, or in another form. TDHCA would work closely with the Master Servicer prior to implementing a new method of providing DPA to ensure that the second lien loans could be appropriately serviced, if necessary.

The Master Servicer must have the ability to service, track, and provide regular reports to TDHCA regarding the status of all Mortgage Loans and DPA Loans originated through the Program. TDHCA recognizes that there will be limited, if any, information provided regarding Mortgage Loans that have been settled into the TBA market.

2.1.1 Minimum Requirements

The Master Servicer must be a qualified Ginnie Mae issuer/servicer, a Fannie Mae/Freddie Mac approved seller/servicer, a FHA-approved mortgagee, a VA approved lender and a RHS approved lender. The institution should also provide evidence of experience in administering and processing Ginnie Mae-secured, Fannie Mae/Freddie Mac-secured, FHA-insured, RHS and VA-guaranteed mortgage programs for state Housing Finance Agencies (“HFAs”). The Master Servicer must also have an extensive background (3 to 5 years) in servicing and administering tax-exempt mortgage revenue bond portfolios or other alternatively financed mortgage portfolios.

2.1.2 General Services

Nature of Services Required/Deliverables

1. The Master Servicer will:

a. Review program documentation to ensure that it reflects origination, underwriting, loan processes and documentation that satisfy the requirements of Ginnie Mae, FannieMae, and/or Freddie Mac.

b. Work closely with TDHCA in developing program and lender guidelines and in approving Participating Lenders.

c. Assist TDHCA with lender training, including participating in informational meetings and training workshops as necessary.

d. Secure any necessary commitments from Ginnie Mae, Fannie Mae, and/or Freddie Mac.

e. Advise TDHCA when a Participating Lender no longer qualifies as an eligible lender under the program, or when a Participating Lender has performed or is performing in a manner that may adversely affect TDHCA with respect to the origination and sale of Mortgage Loans.

f. Be available to assist lenders by responding to questions and clarifying requirements during the origination-to-closing process for the Mortgage Loans.

g. Review each Mortgage Loan file for compliance with program requirements (as established by TDHCA), notify the Participating Lender, in a timely manner, of deficiencies that need to be corrected, work with the Participating Lender to correct such deficiencies, and purchase the Mortgage Loans as quickly as possible.

h. At Mortgage Loan purchase, collect from Participating Lenders any extension fees due and advance to Participating Lenders any amounts owed with respect to DPA and lender compensation, including servicing release premiums due to the Participating Lenders under the Program.

i. Warehouse the Mortgage Loans until pooled into MBS, unless other arrangements are agreed upon between TDHCA and the Master Servicer.

j. Provide at least monthly and more often as agreed-upon with TDHCA, lists of Mortgage Loans eligible for pooling. A separate list shall be provided for Mortgage Loans eligible to be pooled into Ginnie Mae Certificates, and for Mortgage Loans eligible to be pooled into Fannie Mae or Freddie Mac Certificates. These lists shall be provided to TDHCA and to the TBA Provider.

k. Pool the Mortgage Loans as instructed by TDHCA and/or the TBA Provider.

l. Settle and deliver the MBS as instructed by TDHCA and/or the TBA Provider.

m. Concurrent with MBS settlement, reconcile and settle amounts due to the Master Servicer and amounts due to TDHCA (including Service Release Premium (“SRP”) or other amounts due to TDHCA from the Master Servicer) for the related Mortgage Loans.

n. Service all Mortgage Loans in accordance with sound loan servicing practices and as required by the terms and conditions of the Servicing Agreement (the “Agreement”).

o. Be responsible for all foreclosure and Real Estate Owned (“REO”) activities.

p. Provide monthly delinquency and foreclosure information (i) on a loan-by-loan basis for Mortgage Loans pooled into MBS that securitize SFMRBs and (ii) on a programmatic level for Mortgage Loans pooled into MBS that were delivered into the TBA market.

q. Provide monthly reports that detail the outstanding principal balance of all DPA Loans and the specifics of any DPA Loan amounts received or written-off related to prepayments, short sales, foreclosures, deed-in lieu, or other action.

r. Provide additional reports, if necessary. TDHCA and the Master Servicer will agree as to the timing, scope, and method of providing such reports.

s. Notify TDHCA, in writing, when the Master Servicer has been provided with a change of address or an alternate address for the borrower(s) with respect to any outstanding DPA Loan.

t. Permit TDHCA, at its request, to conduct site visits to audit purchased Mortgage Loan Files; the timing and details of such visits to be mutually agreed upon by TDHCA and the Master Servicer.

2.2 Performance Standards

Performance Under this RFP

Performance under this RFP will be measured by the Servicer’s ability to provide successful purchase, pooling, delivery and servicing of Mortgage Loans. Examples of performance measures include:

1. Notification to lenders of Mortgage Loan deficiencies in a timely manner and in accordance with the Agreement;

2. Purchase of Mortgage Loans from Participating Lenders in a timely manner and in accordance with the agreement;

3. Pooling of Mortgage Loans into MBS and Delivery of MBS as instructed, in a timely manner and in accordance with the Agreement;

4. Compliance with the terms and conditions of the agreement.

5. Monthly reports as described in Section II. Scope of Work, B. Nature of Services Required/Deliverables provided in a timely manner.

6. Availability of sufficient staff to work with TDHCA staff as needed. It will be expected that all emails and phone calls will be acknowledged within one business day to allow for a minimum, discussion of deliverables and deadlines.

2.3 Deliverables Acceptance

Deliverables acceptance under this RFP will include, but is not limited to, items described in Section II Scope of Work, 2.1.2 General Services -Nature of Services Required/Deliverables and deadlines will be established on a program by program basis by TDHCA staff. TDHCA staff will review deliverables and confirm completion and acceptance of the related information or request additional information. TDHCA has the option to notify of any failure to provide deliverables within the agreed upon deadlines or failure to meet performance standards and will request resolution within ten (10) working days of said notification. TDHCA may exercise any other right, remedy, or privilege which may be available to it under applicable law of the state and any other applicable law or may proceed by appropriate court action to enforce provisions of the Contract.

2.4 Term of Contract

If a Contract is awarded, the initial term of the Contract is expected to begin May 01, 2024, or as soon thereafter as practical, and to terminate August 31, 2027. In accordance with the terms of the Contract, the Department has the option, in its sole discretion, to extend the contract for two (2) additional one (1) year periods, one (1) year at a time through August 31, 2029.

A Contract awarded under this RFP, if any, shall incorporate this entire RFP. The Department reserves the right, in its sole discretion, to make a contract award without negotiation of these provisions. In the event the Department requires negotiations with Respondents, any modifications or clarifications agreed to with Successful Respondent during contract negotiations shall also be incorporated into the final, executed Contract. Each Respondent must review these terms and conditions in Exhibit A and otherwise in this RFP and must address any concerns or issues in its transmittal letter. Terms and conditions not specifically objected to in the transmittal letter will be deemed to be accepted by Respondent. The Department has final approval of any contract awarded as a result of this RFP.

2.3 Limitation of Authority

Successful Respondent shall have no authority to act for or on behalf of the Department, or the State of Texas except as expressly provided for in the Contract; no other authority, power, use, or joint enterprise is granted or implied. Successful Respondent may not incur any debts, obligations, expenses, or liabilities of any kind on behalf of the Department or State of Texas.

Independent Contractor

The Master Servicer will be an independent contractor for TDHCA and not an employee of TDHCA. TDHCA reserves the right to assume any or all of the responsibilities of the Master Servicer pursuant to a default or as negotiated with the Master Servicer and included in the Servicing Agreement.

PART III

GENERAL INFORMATION

3.1 Authority

The Texas Department of Housing and Community Affairs (“TDHCA”) was created pursuant to Chapter 762, Acts of the 72nd Legislature of the State of Texas, Regular Session, 1991, as designated in Chapter 2306, Government Code in part to provide affordable homeownership opportunities to individuals and families of low and moderate income in the State of Texas (the “State”).

The Texas Homeownership Division of TDHCA works closely with private sector financial and lending institutions participating in TDHCA’s single family programs (“Participating Lenders”) to offer financing options to low and moderate income homebuyers throughout the State. Participating Lenders originate mortgage loans through TDHCA’s homeownership programs on a servicing released basis.

The Bond Finance Division of TDHCA is responsible for providing the financing to support the activities of the Texas Homeownership Division.

3.2 TDHCA Rights

In the best interest of the Department and the State, the Department, in its sole discretion, may amend or modify any provisions of this RFP, or withdraw this RFP at any time prior to award of a Contract. The Department reserves the right, in its sole discretion, to reject any or all submitted Proposals or to select one or more qualified Respondents to this RFP without discussion of Proposals with the respective Respondents. The decision of the Department, or its designee with regard to the above, shall be administratively final. The Department, in its sole discretion, may waive administrative deficiencies and/or minor technicalities in Proposals received. All Proposals shall become a part of the Department’s official procurement files and may be available for public inspection upon request after the Procurement process is completed.

3.3 Respondent Obligations

Respondents to this RFP are responsible for any expense related to the preparation and submission of a Proposal. The Department shall not pay for any cost that is incurred by Successful Respondent prior to the effective date of the Contract. Qualified firms with the requisite experience are invited to submit Proposals in accordance with this RFP. Proposals must address all requirements and/or specifications.

3.4 Successful Respondent Obligations

The Department shall look solely to Successful Respondent for performance of the Contract. Successful Respondent shall provide the requested services under the direction of the Department. Successful Respondent shall be the sole point of Contract responsibility. Successful Respondent shall be liable, both individually and severally, for the performance of all obligations under the awarded Contract and shall not be relieved of the non-performance of any subcontractor.

3.5 Schedule of Events

The Department anticipates that the selection of Successful Respondent and execution of the Contract, if any, will proceed according to the following approximate schedule:

February 14, 2024, - Issuance of RFP (after 10:00 a.m. CT)

February 28 2024 - Deadline for Submission of Questions (2:00 p.m. CT)

April 1, 2024 - Contract Execution (or as soon thereafter as practical)

May 1, 2024 - Commencement of Work (or as soon thereafter as practical)

The times stated in this document refer to Central Time (“CT”), Austin, Texas, where appropriate. The Department’s regular office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday, except national and official State of Texas holidays. All deadlines are subject to change at the Department’s sole discretion.

Notices of changes to items directly impacting the original RFP or proposal process will be posted on the ESBD at: http://www.txsmartbuy.com/esbd. Any amendment to this solicitation will be posted as an addendum on the ESBD. It is the responsibility of interested parties to periodically check the ESBD for updates to the procurement prior to submitting a Proposal. Respondent’s failure to periodically check the ESBD for updates will in no way release Successful Respondent from compliance with any requirements in the “addenda or additional information,” even if such compliance results in additional costs to meet the requirements.

3.6 Issuing Office

The Department, through its Purchasing Section, is the Issuing Office and the sole point of contact for this RFP. The Purchasing Section is the only office authorized to clarify, modify, amend, alter, or withdraw the specifications, terms, and conditions of this RFP and any contract awarded as a result of this RFP. Upon issuance of this RFP, other employees and representatives of the Department shall not answer questions or otherwise discuss the contents of this RFP with any Respondents or their representatives. Failure to observe this restriction may result in disqualification of any pending or subsequent Proposal. This restriction does not preclude discussions unrelated to this RFP or questions relating to completing the HUB documents required in Section 4.2.M.

Except as otherwise indicated, all communications concerning this procurement must be in writing and addressed to the Issuing Office as follows:

Cheryl D. Robinson-Mathis, Purchaser E-mail: Cheryl.Mathis@tdhca.texas.gov

RETURN ALL SEALED RESPONSES TO:

Texas Department of Housing and Community Affairs Attention: Purchasing #332-RFP24-1004 221 East 11th Street Austin, TX 78701 (8am-5pm)

Cheryl D. Robinson-Mathis, Purchaser Texas Department of Housing and Community Affairs 221 E 11th Street Austin, Texas 78701

3.7 Submission of Questions

Respondents may submit questions by email to the Issuing Office no later than 2:00 p.m. by the deadline set forth in the Schedule of Events. Questions concerning this RFP must be in writing and addressed to the Issuing Office at the above email address. On or about the date set forth in the Schedule of Events, the Department expects to electronically post answers to the written questions on the ESBD located at: http://www.txsmartbuy.com/esbd.

3.8 Deadline for Submission of Proposals; Delivery Instructions; Number of Copies Required

One (1) original hard copy, three (3) digital copy of the response in PDF format on thumb drives must be submitted to the mailing address in Section 3.6 (Issuing Office). The response must be received in the Issuing Office no later than 2:00 p.m. on the deadline set forth in the Schedule of Events. Facsimiles will not be accepted.

Late Proposals will not be considered under any circumstances.

Respondents are solely responsible for verifying the Department’s receipt of all Proposals by the deadline specified above. The Department shall not be liable or responsible for any costs whatsoever incurred in submission of a Proposal.

Faxed Proposals are not acceptable and will not be considered.

If sending a proposal via USPS by regular mail, certified mail, or express mail, it is incumbent upon Respondent to allow sufficient time to permit timely delivery by the USPS and by mail services internal to the Department. A USPS postmark or round validation stamp, a mail receipt with the date of mailing stamped by the USPS, a dated shipping label, invoice, or receipt from a commercial carrier, or any other documentation in lieu of the Issuing Office on-site time stamp WILL NOT be accepted.

Under Section 322.020 of the Texas Government Code, the Legislative Budget Board (“LBB”) has implemented a database of State agency contracts. (See the LBB website at www.lbb.texas.gov.) The Department will upload to the LBB’s contract database the text of the complete Contract, including Successful Respondent’s Proposal (with limited redaction and appendix) after the date of Contract award. In submitting a Proposal, Respondent acknowledges that it understands and accepts this requirement.

3.9 Confidential Information; Nondisclosure; Open Records

All information gathered, produced, derived, obtained, analyzed, controlled or accessed by Respondent in connection with a contract resulting from this RFP (“Confidential Information”) shall be and remain Confidential Information and shall not be released or disclosed by Respondent without the prior written consent of the Department. Such consent must specifically identify the Confidential Information allowed to be disclosed by Respondent and the nature of the disclosure allowed. Respondent must execute and return with its Proposal a Nondisclosure Agreement with the Department, in the form of Exhibit E attached hereto.

Following the award of a Contract, Proposals are subject to release as public information unless the Proposal or specific parts of the Proposal can be shown to be exempt from the Texas Public Information Act. All Respondents are advised to consult with their legal counsel regarding disclosure issues and take the appropriate precautions to safeguard trade secrets or any other proprietary information disclosed in their Proposals. The Department assumes no obligation or responsibility relating to the disclosure or nondisclosure of information submitted by Respondents.

If a Respondent believes that any portion of a Proposal is confidential, then Respondent must so specify. Respondent must stamp in bold red letters the term “CONFIDENTIAL” on that specific part or page of the Proposal that Respondent believes to be confidential. Respondent must submit in writing specific, detailed reasons, including any relevant legal authority, stating why Respondent believes the material to be confidential. Vague and general claims of confidentiality will not be accepted. The Department will be the sole judge of whether a claim is general and/or vague in nature. All Proposals and parts of Proposals that are not marked as confidential will be automatically considered public information after the contract is awarded. A Proposal resulting in an award may be considered public information even though parts are marked confidential.

In the event the Department receives portions of a Proposal marked “CONFIDENTIAL” as specified above, the Department shall forward such request to the Office of the Attorney General of Texas (“Attorney General”) for an opinion on whether such information may be withheld from disclosure under the Texas Public Information Act. The Department will notify Respondent whose Proposal is the subject of the request when the information is forwarded to the Attorney General. The Department assumes no obligation for asserting legal arguments on behalf of Respondent. Respondents are advised that the Department is obligated to comply with the decision of the Attorney General, including any decision calling for the release of information marked “CONFIDENTIAL” by a Respondent.

Copyrighted Proposals are unacceptable and are subject to disqualification as non-responsive.

3.10 Media Releases

The Department does not endorse any vendor, commodity, or service. Media releases pertaining to this RFP, the Contract, if any, or the Services to which they relate shall not be made without the prior written consent of the Department. The disclosure of the contents of Proposals prior to the award of the Contract, if any, or any other violation of this section, may result in disqualification.

3.11 Non-exclusivity

This RFP is not exclusive, and the Department reserves the right to issue additional solicitations regarding the Services described in this RFP or similar services at any time.

3.12 Incorporation of Exhibits

Exhibits A, B, C, D, E, F G, H and I are attached or a separate document as documented in the table of contents and are hereto and incorporated as part of this RFP for all purposes.

3.13 Transition of Services

Upon termination of the Contract for any reason, the contractor shall, in good faith and with reasonable cooperation, aid in the transition to any new arrangement and provider. The Contractor shall deliver to the Department or its’ new contractor all completed, or partially completed, work and any and all documentation or other products and results of these services.

PART IV

PROPOSAL FORMAT

4.1 Introduction

Each original Proposal and copy shall contain a cover sheet with the following: “332-RFP24-1004 Master Servicer” and the name and address of Respondent. Proposal pages must be numbered consecutively.

Proposals must be organized as described in Section 4.2. Proposals not organized in this manner may be subject to disqualification. Conciseness and clarity of content are required; vague and general Proposals may be considered non-responsive, which may result in disqualification of such Proposals. Proposals must be complete; failure to provide all required information may result in the disqualification of the Proposal.

ALL EXHIBITS TO THIS RFP ARE PREPARED EXCLUSIVELY FOR THIS RFP. RESPONDENT’S SUBMISSION OF OTHER EXHIBITS OR DOCUMENTS, INCLUDING PRIOR RFP EXHIBITS, MAY RESULT IN DISQUALIFICATION OF THE PROPOSAL.

4.2 General Organization of Proposal Contents

Proposals must be organized as follows:

a) Transmittal Letter;

b) Executive Summary;

c) Table of Contents;

d) Respondent Identifying Information;

e) Proposed Subcontractor(s) Identifying Information;

f) Respondent Qualifications and Experience;

g) Respondent Narrative and Preliminary Work Plan

h) Proposed Fee;

i) Financial Statements;

j) Historically Underutilized Businesses Subcontracting Plan;

k) Criminal Conviction Certification;

l) Nondisclosure Agreement;

m) Conflict of Interest Statement;

n) Certification Regarding Public Nature of the Proposal; and

o) Vendor Reference Questionnaire.

A description of the information required for each of the items listed above is set forth below.

4.2.A Transmittal Letter

Respondent must submit a transmittal letter that identifies the entity submitting the Proposal and includes a commitment by that entity to provide the Services required by the Department. The transmittal letter must state that the Proposal is valid for one hundred eighty (180) days from the deadline for delivery of Proposals to the Department. Any Proposal containing a term of less than one hundred eighty (180) days for acceptance from this deadline will be rejected as non-responsive.

The transmittal letter must be signed by a person legally authorized to bind Respondent. Respondent also must indicate in its transmittal letter why it believes it is the most qualified to provide the requisite Services and why it believes its proposed services best meet the Department’s objectives and RFP requirements.

The transmittal letter must include a statement of acceptance of the terms and conditions located in Exhibit A to the RFP. If a Respondent takes exception to any of the proposed terms and conditions, Respondent must identify the exception(s) specifically and clearly in the transmittal letter and explain both (1) the reason for the requested change and (2) proposed alternative language. Failure to accept the terms and conditions as set forth in Exhibit A may result in disqualification of the Proposal.

4.2.B Executive Summary

Respondent must provide an executive summary of its Proposal and a representation that the Proposal addresses all of the requirements of this RFP. The executive summary must not exceed three (3) pages and must represent a full and concise summary of the contents of the Proposal. Respondent must identify any Services that are provided beyond those specifically requested. If Respondent is providing Services that do not meet the specific requirements of this RFP but in the opinion of Respondent are equivalent or superior to those specifically requested, any such differences must be noted in the executive summary. Failure to provide the Services specifically required may result in disqualification of the Proposal.

4.2.C Table of Contents

Each Proposal must be submitted with a table of contents that clearly identifies and denotes by page number each section of the Proposal and the location of all enclosures of the Proposal. The table of contents must follow the RFP’s structure as much as possible.

4.2.D Respondent Identifying Information

Respondent must provide the following identifying information:

· name and address of business entity submitting the proposal;

· type of business entity (e.g., corporation, partnership, etc.);

· state of incorporation or organization and principal place of business;

· name and location of Texas offices, other major offices, and other facilities that relate to Respondent’s performance under this RFP;

· name, business telephone number, email address, of Respondent’s principal contact person regarding the Contract;

· all affiliated companies and subsidiaries, or any joint ventures or other affiliations;

· full name of each member, partner, and employee of Respondent (and any subcontractors) who will perform Services;

· evidence of authorization to do business or operate in Texas;

· detail if respondent, any predecessor of respondent, or any member of respondent been the subject of any disciplinary action by any regulatory agency or professional organization within the last five (5) years;

· detail of any firm ownership changes which have occurred in the last five (5) years, including changes pending;

· detail whether, within the last five years, respondent, any predecessor of respondent, or any member of respondent has been a party to any litigation directly or indirectly related to the conduct of respondent’s business; and

· indicate whether respondent, any predecessor of respondent, or any member of respondent is currently a party to litigation in process; if so, identify the parties, jurisdiction, case number, and subject matter.

4.2.E Proposed Subcontractor(s) Identifying Information

The Proposal must identify any subcontractors and outline the contractual relationship between Respondent and each proposed subcontractor. The Respondent is solely responsible for any proposed subcontractor’s work performed under any contract resulting from this RFP.

4.2.F Respondent Qualifications and Experience Experience

1. Provide evidence of qualifications and experience in serving as a Master Servicer for Ginnie Mae/Fannie Mae/Freddie Mac securitized programs, FHA, VA, and RHS mortgages, and single-family programs funded with tax-exempt bonds or alternatively funded programs. Please include qualified Fannie Mae/Freddie Mac and Ginnie Mae seller-servicer numbers.

2. Provide evidence of qualifications and experience with servicing second lien mortgage loans.

3. List references for programs for which you have served as Master Servicer, currently or in the past, including name, address, telephone number, contact person, and email address. Please provide this information for all state and local agencies for which you have provided these services within the past three years; please indicate whether the servicing provided for these programs was for first and/or second lien mortgage loans.

4. Provide a list of all TBA Providers with which your firm currently interfaces as Master Servicer. Please include a reference from at least one of these organizations.

5. Provide the names and brief resumes of all key personnel who will be assigned to the TDHCA relationship and the primary responsibilities assigned to each person. Please include the name of the Account Executive or the Project manager responsible for any resulting contract. Indicate the level of knowledge and experience each individual has with affordable housing programs, specifically HFA programs. Please also provide information regarding your firm’s experience with and knowledge of the mortgage market, lending practices, loss mitigation, and foreclosure laws in the State of Texas.

6. Name, address and telephone number for the contact person in your firm authorized to negotiate agreement terms and render binding decisions on contract matters.

7. Location of the office that will service loans and administer the program. Indicate whether there is a toll free phone number that will be available to program participants. Indicate the number of and identify the positions of personnel that will be available to answer questions during the mortgage loan origination period.

8. Describe your firm’s Internet reporting capabilities including on-line monitoring and tracking features; describe and detail those features that will benefit TDHCA and participating lenders.

9. Describe your firm’s Loss Mitigation procedures in detail.

10. Describe in detail foreclosure expenses, expected reimbursement, and timeframe of these requests.

11. Any exceptions to the terms and conditions must be clearly stated in the response.

12. Signed RFP Form, Exhibit A Execution of Proposal Information, and Exhibit C HUB Subcontracting Plan.

4.2.G Respondent Narrative and Preliminary Work Plan

In its Proposal, Respondent must submit a narrative explanation of how the offered services will meet the requirements of this RFP. In its narrative, Respondent may also concisely describe any additional features, aspects, or advantages of its services in any relevant area not covered elsewhere in its Proposal.

1. 1, Describe your firm’s recovery plan to continue to fulfill your Master Servicer duties in the event of a disaster.

2. If your organization plans to subcontract any of the services required to be provided as Master Servicer, please indicate which, if any, will be subcontracted. Also provide which services will be subcontracted to minority or woman-owned businesses and indicate what percentage of total revenues these comprise. Please identify those firms with which you will subcontract and describe the subcontractor’s experience with the services being provided. This information should also be included on Exhibit C, HUB Subcontracting Plan.

3. Please describe your approval process for participating lenders in detail, including the minimum requirements that the lenders must meet and/or documentation that must be provided, as well as the timeline for lender approval. Please also describe your approach to ongoing communication with the participating lenders to ensure a successful program.

4. Describe your firm’s past experience and ability to work with lenders that operate in Texas.

5. For existing or prior single-family bond or alternatively funded programs, provide the average amount of time to process loans, from the time a loan purchase file is received through the purchase and pooling process until the certificate is purchased by the Bond Trustee and/or Custodian (from file receipt to sale of the certificate). Please provide this information on a program-by-program basis. Please limit your response to recent performance (within the last year). Please give detailed information on specific programs that may be verified.

6. If applicable, please describe your firm’s method of conducting business with mortgage brokers. Please specify whether your firm allows participation by mortgage brokers, the minimum qualifications required of mortgage brokers for such participation, the number of mortgage brokers located in Texas currently approved to do business with your firm, and your firm’s policies and procedures for preventing and detecting mortgage broker errors, omissions and fraud.

7. Please provide servicing portfolio and delinquency statistics for your most recent reporting period:

4.2.H Proposed Fee

Provide a proposed itemized cost schedule for the services described in this RFP. Please assume that all costs of servicing, including that of Master Servicer counsel, will be borne by the Master Servicer. You may submit a Standard Master Servicer Structure and/or an Alternative Servicing Structure proposal.

1. Standard Master Servicer Structure (complete servicer rights, duties, and responsibilities). Please provide a fee proposal that details the SRP that would be paid by the Master Servicer to TDHCA, as well as how much of that payment would be paid at loan purchase versus on-going (provide method of calculation and frequency of payment), for the following loans:

Alternative Servicing Structure. Please provide a detailed description of the mechanics and economics of any proposed alternative servicing structure, including any risk-share or other aspects that may impact the overall economic benefit to TDHCA. If you are proposing an alternative servicing structure, please provide a detailed description and include as much relevant information as possible.

For either or both approaches above, please outline program overlays, such as FICO scores, maximum Debt-to-Income Ratios, etc. Please also detail any economic implications associated therewith, such as fees for FICO scores within a range.

2. Describe in detail and provide the estimated amount of any program fees your firm will charge as Master Servicer, including review fees, funding fees, tax service, and or other fees charged upon loan purchase to participating mortgage lenders.

3. Please describe any required timeline considerations (such as minimum number of days between receipt of pooling instructions and delivery of MBS pools) that would impact TDHCA’s program.

4. If your firm is, or intends to become, a participating lender in the Program, indicate how many branch offices will be participating and an estimate of the annual amount of mortgage loans you expect to originate.

5. Include any additional information that will be helpful to TDHCA in making a decision.

4.2.I Financial Statements

Respondent and its parent company, if applicable, must provide evidence of financial stability by providing audited financial statements for each of the last two (2) years of Respondent’s operations or, in the alternative, financial statements compiled, reviewed and attested by an independent certified public accountant or certified public accounting firm. Include the most recent Statement on Auditing Standards No. 70: Service Organizations (SAS 70).

4.2.J Historically Underutilized Businesses Subcontracting Plan

The State of Texas and the Department are committed to assisting Historically Underutilized Businesses (HUBs) through the procurement process. In accordance with Sections 2161.181 and 2161.182, Texas Government Code, each state agency shall make a good faith effort to increase the contract awards for the purchase of goods or services to HUBs based on rules adopted to implement the disparity study described by Section 2161.002(c), Texas Government Code. In accordance with Section 2161.252, Texas Government Code and 34 Texas Administrative Code §20.285, each state agency (including institutions of higher education) as defined by Section 2151.002, Texas Government Code that considers entering into a contract with an expected value of $100,000 or more shall, before the agency solicits bids, proposals, offers, or other applicable expressions of interest, determine whether subcontracting opportunities are probable under the contract. If subcontracting opportunities are probable, each state agency’s invitation for bids or other purchase solicitation documents for construction, professional services, other services, and commodities with an expected value of $100,000 or more shall state that probability and require a HUB Subcontracting Plan (HSP) and supporting documentation.

The HUB goals per 34 Texas Administrative Code §20.284 are: 11.2% for heavy construction other than building contracts; 21.1% for all building construction, including general contractors and operative builders contracts; 32.9% for all special trade construction contracts; 23.7% for professional services contracts; 26.0% for all other services contracts; and 21.1% for commodities contracts.

The Department has determined that this procurement falls under the following category: Other Services

The Department has determined that HUB subcontracting opportunities are probable and requires Respondents to complete the HSP form located at: https://comptroller.texas.gov/purchasing/vendor/hub/forms.php. The HSP form is also posted to the ESBD as a separate package under this RFP. The Department has identified the possible subcontracting opportunities on the “Agency Special Instructions/Additional Requirements” portion of the State of Texas HUB HSP form set forth in the following chart. The class and item codes for this RFP are as follows: Class 946, Item 12.

- - Agency Special Instructions/Additional Requirements - -

The Texas Department of Housing and Community Affairs is committed to increasing contracting opportunities with HUBs by contracting directly with HUBs or indirectly through subcontracting opportunities in compliance with Chapter 2161 of the Texas Government Code.

If a bid/proposal/offer to a solicitation with an expected value of $100,000 or more does not contain a completed HSP and supporting documentation, the bid/proposal/offer will be considered non-responsive and will be disqualified. After contract award, Successful Respondent may be subject to debarment pursuant to Section 2161.253(d) of the Texas Government Code if any modifications are made to the HSP without PRIOR approval from the Department.

For assistance in completing the HSP, Respondent may visit the following website: https://comptroller.texas.gov/purchasing/vendor/hub/. If any questions, the respondent may contact the person identified in Part III Section 3.6.

If Respondent is not subcontracting any portion of the contract, Sections 1, 2(a), 3 and 4 must be completed.

If Respondent is subcontracting some portion of the contract, the supporting documentation of “Good Faith Effort” must be demonstrated in either Method A (Attachment A) or Method B (Attachment B).

The Texas Department of Housing and Community Affairs requests all Respondents to consider utilizing HUBs in subcontracting areas that are listed below; however, this list should not be considered exhaustive.

In accordance with 34 TAC §20.285(d)(1)(D)(iii), a Respondent (prime contractor) may demonstrate good faith effort to utilize Texas certified HUBs for its subcontracting opportunities if the total value of Respondent’s subcontracts with Texas certified HUBs meets or exceeds the statewide HUB goal or the agency specific HUB goal, whichever is higher. When a Respondent uses this method to demonstrate good faith effort, the Respondent must identify the HUBs with which it will subcontract. If using existing contracts with Texas certified HUBs to satisfy this requirement, only contracts that have been in place for five years or less shall qualify for meeting the HUB goal.

Respondent must carefully review, complete and return all HUB forms, as required by this Section.

4.2.K Criminal Conviction Certification

Exhibit C must be completed and signed by Respondent.

4.2.L Nondisclosure Agreement

Exhibit D must be completed and signed by Respondent.

4.2.M Conflict of Interest Statement

The Conflict of Interest Statement must be prepared, signed by Respondent, and returned with the Proposal as Exhibit E.

In its Proposal, a Respondent must represent and warrant to the Department that it and each of its subcontractors have the requisite resources, qualifications, and independence to conduct the Services free from outside direction, control, or influence, and subject only to the accomplishment of the Department’s objectives. Respondents that cannot make this representation and warranty should not respond to this RFP.

Respondent must disclose any existing or potential conflicts of interest or possible issues that might create appearances of impropriety relative to the submission of a Proposal from Respondent and its possible selection as Successful Respondent, or its performance or the performance of its proposed subcontractor(s).

As part of this disclosure requirement, each Respondent must include in its Proposal all past and present contractual, business, financial or personal relationships between Respondent and the Department and between Respondent’s proposed subcontractors, if any, and the Department. For purposes of this disclosure requirement, (i) “past” is defined as within the two (2) calendar years prior to the deadline for submission of Proposals; (ii) the “Department” is defined as the agency as well as the agency’s employees or recent former employees; and (iii) “recent former employees” are defined as those Department employees who have terminated agency employment within the two (2) calendar years prior to the deadline for submission of Proposals. For each item, Respondent must provide a detailed explanation of why Respondent does or does not believe such item poses a conflict of interest, potential conflict of interest, or appearance of impropriety issue relative to Respondent’s submission of a Proposal, possible selection as Successful Respondent or its performance of the Contract.

For purposes of this RFP, “personal relationship” is defined as a current or past connection other than a clearly contractual, business, financial, or similar relationship and includes family relationships or other connections other than simply providing a response to this RFP. For this purpose, “family relationship” means a relationship within the third degree of consanguinity or second degree of affinity. Chapter 573 of the Texas Government Code defines these degrees of consanguinity and affinity.