FDIC Large Bank Servicer - Commercial Statement of Objectives.pdf

FDIC Large Bank Servicer – Commercial – Statement of Objectives

STATEMENT OF OBJECTIVES

Purpose The purpose of this project is to identify potential offerors qualified to provide loan servicing for a variety of Commercial loans/assets (reference types of assets listed in Section II – Scope/Mission below) and who are able to support large volume, domestic portfolios with over ten thousand loans, book values over $25 billion. FDIC intends to compete and award one or two Receivership Basic Ordering Agreements (RBOAs).

Mission The Federal Deposit Insurance Corporation’s mission is to maintain stability and public confidence in the nation’s financial system. As part of fulfilling that mission, the FDIC, through the Division of Resolutions and Receiverships arranges resolution for failed institutions it insures. As Receiver for various failed institutions, and in its corporate capacity, the FDIC has the responsibility to provide a full range of servicing for the following categories of Assets: Commercial Loans, Construction Loans, Government Backed Guaranteed Loans and Owned Real Estate. These Assets will vary in size, type, location, and documentation quality and could likely contain unique, complex, and unusual servicing requirements relative to the nature of the Assets. In addition, the FDIC has a variety of ownership interests or servicing responsibilities in Securitizations, which may include various tax structures, such as Real Estate Mortgage Investment Conduits and similar type products.

Characteristics of Assets serviced under this Agreement may be:

1. Performing, Delinquent, Non-performing or matured;

2. Matured but otherwise Performing;

3. Secured, unsecured, cross-collateralized or part of a credit relationship with other Assets;

4. Owned in whole, in part or fully sold;

5. Secured assets containing senior or subordinate lien positions;

6. Collateralized by business assets, receivables, chattel, and real property;

7. Underwritten to various levels of credit risk to include prime, alternative A-Paper and Sub-prime risk categories;

8. Acquisition, Development and Construction Loans at various stages of completion;

9. Partially funded or unfunded letters of credit;

10. Foreclosed collateral in need of liquidation;

11. Government guaranteed loan products, including SBA, USDA, FSA or other Government Backed

Guaranteed Loan products;

12. Emerging Mortgage Products or other non-traditional products and any warrants associated therewith;

13. Commercial & Industrial Loans;

14. Commercial Real Estate Loans;

15. Agriculture Loans;

16. Specialty Assets, including Fund Banking, Venture Debt, Baas;

17. Servicing Rights;

18. Mortgage Servicing Rights

Period of Performance/Place of Performance Period of Performance is anticipated to be a base period of three years with two 3-year option periods and one 1-year option period for a possible total of ten years of performance.

The place of performance will be at the Contractor’s place of business, Financial Institution, FDIC Offices and/or other FDIC approved remote work location(s).

Performance Objectives A. General Services: Contractor shall provide to FDIC general Loan administration and collection services appropriate to the type and status of the particular Loan being serviced. These services shall include, but shall not necessarily be limited to the following:

i. Collecting and recording Loan payments.

ii. Advancing funds when necessary for partially funded or unfunded Loan commitments, lines of credit and for the protection of Collateral. Contractor shall pay from its own funds, all Loan fees, costs and Advances related to and incurred in connection with servicing Loans in the performance of this Agreement.

iii. Negotiating, compromising, and restructuring Loans.

iv. Foreclosure, repossession, and liquidate Collateral when necessary.

v. Property preservation, protection and liquidation.

vi. Administrative services related to Loan sales.

vii. Escrow administration and Remittance services concerning the Asset Portfolio.

viii. Participation reporting functions.

ix. Reporting functions as defined for the Agency requirements.

x. Filing and managing the claim process for any applicable insurance coverage pertaining to the

Asset, including but not limited to, title insurance, government guarantees, hazard insurance, Private Mortgage Insurance, etc.

xi. Filing customary federal and state tax statements and notices to include 1098, 1099, etc.

xii. Contractor may be expected to travel to meet with Borrowers, Investors or potential acquirers, inspect Collateral, attend hearings and depositions, foreclosure proceedings, and manage and sell

ORE.

xiii. Asset Research Request: Contractor shall research and resolve, as requested, any research request on Assets the Contractor currently services, has serviced in the past or any FDIC Asset related to a failed institution. In the matter of lien/Collateral releases, the Contractor shall identify whether a release is warranted, obtain the appropriate confirmation with the governing agency and all participants, and execute the release and appropriate documents. If monetary consideration will be exchanged for the release, Contractor shall execute all actions necessary to complete the transaction with the approval of the FDIC.

xiv. ARM Loan Reviews

xv. Full ARM Loan Audits

xvi. Wraparound Loans

Operating Constraints A. Servicing Standards: The Contractor shall service the Assets in the same manner in which, and with the same care, skill, prudence and diligence with which, the Contractor services and administers similar assets for third parties or held in its own portfolio, whichever servicing procedure is of a higher standard, and otherwise, in the following order of priority:

i. In accordance with applicable federal, state and local laws, regulations and guidelines;

ii. Pursuant to the applicable Loan Documents;

iii. Pursuant to the FDIC written policies and procedures, and as incorporated into this SOW.

iv. Pursuant to the applicable provisions of any FDIC interagency agreement or memorandum of understanding.

v. Agency Standard Operating Procedures.

vi. And further, in any event: (i) giving due consideration to the customary and usual standards of practice of prudent institutional lenders servicing their own assets, (ii) exercising reasonable business judgment, (iii) with a view to the timely recovery of scheduled payments of P&I on the Assets and the best interests of the FDIC, as determined by the Contractor in its reasonable judgment, and (iv) without regard to: (A) any relationship that the Contractor or any Affiliate of the Contractor may have with the related Borrower or any other party to the transaction; (B) the ownership by the Contractor or any Affiliate of the Contractor of any indebtedness secured by a junior lien on the Collateral securing any Asset; (C) the ownership by the Contractor or any Affiliate of the Contractor of any subordinate Participation or co-lender interest in any Asset; (D) the Contractor’s obligation to make Advances as specified in this Agreement; (E) the Contractor’s right to receive compensation for its services under this Agreement or with respect to any particular transaction; (F) the servicing of Assets by a Special Servicer; and (G) the ownership, servicing or management for others of any other assets or Collateral.

vii. Contractor must have multilingual and cultural capabilities including familiarity with the alternative identification programs such as Individual Taxpayer Identification Number Mortgages and Matricula Consular IDs in lieu of social security numbers that allow for lending to undocumented individuals.

viii. Facilities, Equipment and Personnel: Contractor shall perform its duties under this Agreement using its own facilities, equipment and personnel and shall maintain facilities, equipment and personnel so that the performance of this Agreement is not impaired or delayed.

ix. Site Visit: FDIC may perform periodic site visitations to monitor Contractor Asset servicing performance and Contractor shall ensure that adequate Key Personnel are present during the FDIC’s scheduled site visit.

x. Office Space and Equipment for FDIC Staff: Contractor shall provide adequate office space and furnish equipment for FDIC monitoring, auditing and marketing staff when requested.

xi. Communications: Contractor shall establish and maintain the capability to communicate with the FDIC using secured internet e-mail for purposes of general correspondence, submission of reports and online access to Asset information.

B. Fiduciary Responsibility: Contractor shall act in good faith and in the best interest of FDIC in its performance of its duties under this Agreement. Contractor shall act as a fiduciary with respect to the Asset proceeds and any other Asset related funds controlled by Contractor.

C. Funding: Contractor shall timely pay from its own funds before assessment of interest or penalty, all

Loan fees, costs, expenses and Advances related to and incurred in connection with the performance of this Agreement; provided that such expenses and Advances are:

i. Directly related to the performance of this Agreement.

ii. Incurred and paid in accordance with instructions from FDIC and the parameters set forth in this

Agreement.

iii. Reasonable and customary given the amount and nature of the applicable Loan and if applicable, the value, nature and location of, and FDIC’s interest in, the Collateral.

D. Reimbursable Expenses: Contractor shall maintain as part of the applicable Asset File, in a format acceptable to FDIC, receipts or copies of all costs and expenses described in a monthly reimbursable expense invoice.

i. Note: The Contractor may submit invoices for principal advances on a more frequent basis, if needed. Principal advances will be reimbursed as soon as possible, but no later than ten (10) business days.

E. Responses to Borrowers: Contractor shall provide written responses to Borrowers’ inquiries within five

(5) Business Days following receipt of a request.

F. Agency Approvals: Contractor shall maintain its status as an approved Servicer for Fannie Mae, Freddie

Mac, and Ginnie Mae, and any applicable federal, state, or municipal governmental Agency programs and shall immediately notify FDIC of any actual or threatened change in such status.

G. MERS Membership: Contractor shall be a member of Mortgage Electronic Registration Systems.

H. Authority to Operate: The Contractor shall not input, store, process, output, and/or transmit FDIC data within a Contractor IT system without an Authority to Operate (ATO) signed by the FDIC Authorizing Official (AO) granted via the System Security Authorization (SSA) process. The FDIC process for obtaining and maintaining ATO, is in accordance with NIST SP 800-37 Risk Management Framework for Information Systems and Organizations. The Contractor shall adhere to current FDIC policies, procedures, and guidance for the SSA process.

I. Indemnification: The Contractor must indemnify, hold harmless, and defend the FDIC against all claims and costs that result from any act or omission constituting negligence, willful misconduct or breach of fiduciary duty in connection with the contractor's performance of the contract, committed or made by any officer, director, employee or agent of the contractor or its subcontractors. FDIC does not offer any indemnification to the contractor under this Contract for, including but not limited to, losses, indebtedness, liabilities, damages, awards, judgements, or reasonable attorney's fees, brought against the contractor and paid in settlement of any third-party claim against the contractor, which directly arises from actions taken by the contractor pursuant to this Contract.