Attachment_1.docx

ATTACHMENT 1

LIST OF MORTGAGEE LETTERS

SINGLE FAMILY POST INSURANCE DIVISION

POST CLAIM REVIEW CONTRACT

MORTGAGEE LETTERS

*Though this attachment lists all relevant mortgagee letters to date, the Contractor will be responsible for obtaining and reviewing all subsequent mortgagee letters

ATTACHMENT 2

SAMPLE LISTING OF MORTGAGEE SITES

B

ATTACHMENT 3

TYPE OF CLAIMS

· 01—CONVEYANCE: The property is deeded/conveyed to HUD. The mortgagee transfers the property to HUD, usually after the mortgagee acquires it through foreclosure proceedings. Conveyances are paid in two parts. Part A of the Form HUD-27011 is filed first and is used to claim the unpaid loan balance. The Part B of a conveyance claim is filed after the designated M&M Contractor has approved the title evidence package and HUD Headquarters mails a title approval letter. The Part B declares expenses incurred by the mortgagee on the property, such as taxes, property preservation and protection expenses, and foreclosure costs. Conveyance claims result in the cancellation of FHA mortgage insurance.

· 02—ACD-601: Participating servicers in the Accelerated Claims Disposition (ACD) Demonstration (a pilot program) assign mortgage notes to HUD in return for insurance benefits. HUD continues to service the asset or disposes of the asset through other means. Form HUD 27011, Parts A and/or B, must be submitted together via EDI. ACD claims result in the cancellation of FHA mortgage insurance.

· 05—SUPPLEMENTAL CLAIMS: Supplemental claims are additional claims requesting adjustments and made relative to a prior claim submission. Mortgagees are allowed to file one supplemental claim up to six (6) months following the final settlement date of a claim (see Handbook 4330.4 for exceptions). Supplementals may be used to claim additional expenses or to adjust erroneous items on the original claim that could result in a mortgagee owing funds to HUD. Amounts due HUD are not subject to any time limitations. Form HUD 27011, Parts A and/or B, must be submitted together with supporting documentation.

· 06—Claims Without Conveyance of Title (CWCOT) The property deed passes to a third party. This claim type provides for the mortgagee to dispose of the foreclosed property without conveying title to HUD. Parts A and B must be submitted together; only one claim payment is made to the mortgagee. Non-conveyance claims result in the cancellation of FHA mortgage insurance.

· 07—PRE-FORECLOSURE SALE: The mortgagor sells the property before the mortgagee forecloses. Under certain circumstances, this claim type is used when the property’s fair market value is less than the outstanding indebtedness. HUD preauthorizes the terms of the sale and the minimum sales price, and the mortgagor attempts to sell the property. If the property is sold, a foreclosure is avoided and the mortgagee may file a claim to recover the difference between the sales proceeds and the total indebtedness (24 CFR 203.370). Pre-Foreclosure sale claims result in the cancellation of FHA mortgage insurance.

· 20-24—HOME EQUITY CONVERSION MORTGAGE: Home Equity Conversion Mortgages (HECMs) are also known as reverse mortgages. The mortgagee may submit a HECM assignment claim (type 22) when the outstanding principal balance is at 98% of the maximum claim amount or when a request for a line of credit draw will cause the outstanding principal balance to equal or exceed 98% of the maximum claim amount. A mortgagee may submit a foreclosure or deed-in-lieu claim (type 21) if the mortgage becomes due and payable under the circumstances noted at 24 CFR 206.27 (c). Likewise, a mortgagee may submit a mortgagor’s sale claim (type 23) under the conditions described at 24 CFR 206.125 (c). Parts A and B, Form HUD-27011 are submitted concurrently for each HECM claim type. A supplemental claim (type 24) may be submitted to recover approved amounts not claimed in the original HECM claim submission.

· LOSS MITIGATION CLAIMS: Claim types 31, 32, and 33 are reinstatement options for forward mortgages under the Department’s loss mitigation program and are considered home retention tools. These claim types are used in situations where the mortgagee considers the cause of the default to be curable and the borrower is committed to remaining in the home. Loss Mitigation Claims do not cause the cancellation of FHA mortgage insurance.

· 31—SPECIAL FORBEARANCE AGREEMENT: This type of claim provides for an incentive payment to mortgagees for entering into a written special forbearance agreement with a mortgagor containing a plan to reinstate a loan that has been delinquent for at least 90 days (24 CFR 203.614).

· 32—LOAN MODIFICATION: This type of claim provides for an incentive payment to mortgagees for making a permanent change in one or more of the terms of a borrower’s loan that, if made, allows the loan to be reinstated and results in a payment the borrower can afford (24 CFR 2033616).

· 33—PARTIAL CLAIM: Under this type of claim, the mortgagee receives an incentive payment (and the amount of the advance) for advancing funds on behalf of a borrower in an amount necessary to reinstate a delinquent loan not to exceed the equivalent of 12 months PITI. The borrower, upon acceptance of the advance, will execute a promissory note and subordinate mortgage payable to HUD (24 CFR 203.371).

· FHA’s HOME AFFORDABLE MODIFICATION LOSS MITIGATION OPTION (FHA-HAMP): The objective of FHA-HAMP is to assist FHA mortgagors who are in default to modify their mortgage to an affordable payment. A HAMP partial claim up to 30 percent of the unpaid principal balance as of the date of initial default may be used as a stand-alone option or in combination with a HAMP loan modification.

Note: FHA may develop additional loss mitigation options to assist mortgagors in retaining their homes, under pending legislation related to the existing foreclosure situation and also related to mortgagors in bankruptcy. After training, provided by FHA, the Contractor will be expected to perform post claim reviews on these new types of claim options.

ATTACHMENT 4

CLAIM REVIEW SIZE DESCRIPTION

1. Post Claim Reviews and Technical Support

For the purpose of this task, HUD anticipates that at the time of the contract award, the following determination of review size will be used to establish the appropriate statistical criteria. The number of claims to be reviewed will be based on a 95 percent confidence level, with a confidence interval no greater than 5 percent. The Contractor shall provide to the GTR/GTM a schedule for approval showing the number of claim files to be reviewed to attain the desired 95 percent confidence level/5 percent confidence interval based on the review sizes indicated below. Note that findings identified in the directed sampling will not be extrapolated but will be included as hard dollars in the monetary findings.

· Extra Large (Size A). Mortgagees that have submitted 2,000 or more claims since the ending date of the most recent post claim review. This review will also include 20 Loss Mitigation Home Retention Claims. HUD, at its discretion, may identify up to 12 cases as directed reviews in addition to the number of cases identified under the Audit Plan for this review size. In addition, HUD may elect to expand a review if the initial evaluation of cases in the sample indicates a potential for errors resulting in over claimed amounts that exceed HUD’s threshold for tolerance.

· Large (Size B). Mortgagees that have submitted between 500 and 1,999 claims since the ending date of the most recent post claim review. This review will also include 16 Loss Mitigation Home Retention Claims. HUD, at its discretion, may identify up to 10 cases as directed reviews in addition to the number of cases identified under the Audit Plan for this review size. In addition, HUD may elect to expand a review if the initial evaluation of cases in the sample indicates a potential for errors resulting in over claimed amounts that exceed HUD’s threshold for tolerance.

· Medium (Size C). Mortgagees that have submitted between 100 and 499 claims since the ending date of the most recent post claim review. This review will also include 10 Loss Mitigation Home Retention Claims. HUD, at its discretion, may identify up to 10 cases as directed reviews in addition to the number of cases identified under the Audit Plan for this review size. In addition, HUD may elect to expand a review if the initial evaluation of cases in the sample indicates a potential for errors resulting in over claimed amounts that exceed HUD’s threshold for tolerance.

· Small (Size D). Mortgagees that have submitted between 50 and 99 claims since the ending date of the most recent post claim review. These reviews do not require travel to the mortgagee’s site. The mortgagee will send copies of requested claims documentation to the Contractor. This review will also include 6 Loss Mitigation Home Retention Claims. HUD, at its discretion, may identify up to 8 cases as directed reviews in addition to the number of cases identified under the Audit Plan for this review size. In addition, HUD may elect to expand a review if the initial evaluation of cases in the sample indicates a potential for errors resulting in over claimed amounts that exceed HUD’s threshold for tolerance.

· Extra Small (Size E). Mortgagees that have submitted between 1 and 49 claims since the ending date of the most recent post claim review. These reviews do not require travel to the mortgagee’s site. The mortgagee will send copies of requested claims documentation to the Contractor. This review will also include 2 Loss Mitigation Home Retention Claims. HUD, at its discretion, may identify up to 5 cases as directed reviews in addition to the number of cases identified under the Audit Plan for this review size. In addition, HUD may elect to expand a review if the initial evaluation of cases in the sample indicates a potential for errors resulting in over claimed amounts that exceed HUD’s threshold for tolerance.

· Expanded Reviews. This category/size refers to the expansion of an initial review IF a valid statistical determination of findings cannot be achieved under the above categories. Based on the Contractor’s recommendation, HUD may authorize a request for additional claim files to develop a more accurate statistical determination of findings. Under these circumstances, HUD requests the mortgagee to send copies of such claims to the Contractor; however, HUD may authorize travel, depending on the number of additional files to be included in the expanded review.

· Reviews for Claim Types. At HUD’s direction, paid claims may be reviewed by specific claim type. As part of its proposal, the Contractor must provide HUD the cost to perform reviews by specific claim type based on the number of claims reviewed.