QandA 5.1.2023 FINAL.docx

DOCX document 20 KB Posted

Attached to
Homeownership Mortgage Loan Quality Control Review RFP
Solicitation number
23-551HDA-HMOWN-B-35807
Issued by
Cook County, Illinois

About this file

This document is a Question and Answer (Q&A) document related to a Request for Proposal (RFP) issued by the Illinois Housing Development Authority (IHDA) for Homeownership Mortgage Loan Quality Control Review services. The RFP seeks a vendor to provide pre-funding and post-funding quality control reviews of mortgage loans, including reviews of early payment defaults, error resolution, prompt crediting and payoff, successor in interest, continuity of contact and early intervention, loss mitigation, and bankruptcy. The RFP indicates that volume can vary, with a potential increase up to 100% during high volume periods. The RFP states that the vendor will not be required to interact directly with IHDA's originating lending partners, and that IHDA will provide the population for both the random and discretionary sample. IHDA will also provide the vendor with its program requirements and master servicer requirements, though the vendor is expected to have an expert-level understanding of agency and regulatory requirements.

The Q&A document provides additional details on the scope of work, including the expected monthly volumes, the types of loans in scope, the role of the master servicer, and the timeline for completing reviews. The document also addresses technology integration, documentation requirements, the handling of deficiencies identified during the review process, and IHDA's involvement in reviewing the results of the reviews. The RFP is being issued by the State of Illinois, and responses must be submitted electronically in accordance with CPO Notice 2020.06.

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Other files

File Type Posted
Vendor Disclosure.docx DOCX document
B35807 NOA_Adfitech~1.pdf PDF
Pricing Tool V3.xlsx XLSX spreadsheet
Appendix 1~7.docx DOCX document
Vendor Instructions~2.docx DOCX document
Attachment - Notice of Electronic Submission Only~1.pdf PDF
RFP Document - Homeownership Mortgage Loan Quality Control Review V7~2.docx DOCX document
IPG Active Registered Vendor Disclosure.docx DOCX document

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Text version

Category
Question
Answer
1
Scope
What is the average number of loans expected on a monthly basis for pre-funding QC review? What has been the average number of loans in the last year? Is the quantity in the pricing tool of 99 units per month a floor, ceiling, or average?
As the RFP identifies, we seek a 10% random pre-funding QC review. In times of high volume this may be increased to 100%. Therefore, volume for this function can vary, as our 1 to 99 units per month indicates.
2
Scope
What is the average number of loans expected on a monthly basis for post-funding QC review (across approved, denied, and withdrawn populations, if applicable)? What has been the average number of loans in the last year? Is the quantity in the pricing tool of 99 units per month a floor, ceiling, or average?
As the RFP identifies, we seek a 10% random and 5% discretionary review monthly. In times of high volume this may be increased to 100%. Therefore, volume for this function can vary, as our 1 to 99 units per month indicates.
3
Scope
Please share the anticipated servicer QC review monthly volumes for each of the following:

Early Payment Default reviews, Error Resolution and Information Request reviews, Prompt Crediting and Payoff reviews, Successor in Interest reviews, Continuity of Contact and Early Intervention reviews, Loss Mitigation reviews and Bankruptcy reviews.

As the RFP identifies, we seek a 10% random servicing QC review for all of the categories mentioned. Therefore, volume for this function can vary, as our 1 to 99 units per month indicates.

4
Scope
We understand that several mortgage programs are available to applicants, including Opening Doors, IHDAccess Forgivable/Deferred/Repayable Mortgage programs, and other homeowner assistance loans. Are these mortgage programs in-scope for review? What other types of loans are in scope (conforming, jumbo, VA, FHA, USDA etc.)
The scope of the review includes an agency review for the first lien transaction and review for compliance with the selected IHDA second loan program. First lien programs include FHLMC, FNMA, FHA, VA and USDA. The IHDA programs include but are not limited to the programs described at https://www.ihdamortgage.org/program-directory.
5
Scope
We understand U.S. Bank is IHDA's master servicer, please confirm if they will be the master servicer for the loans associated to this RFP and if we will be working directly with U.S. Bank.
U.S. Bank is IHDA’s master servicer. The majority of transactions will be transactions in which U.S. Bank is the master servicer (approximately 95% or more). There is a pilot in progress for conventional transactions that may not involve the master servicer.
6
Scope
Does the post-funding QC encompass the Rejected/Denied/Withdrawn referenced within the pricing tool? If no, What has been the average number of loans in the last year? What is the expected percentage of files to be reviewed? Is the quantity in the pricing tool of 99 units per month a floor, ceiling, or average
IHDA is not the originating lender, therefore, rejected/denied and withdrawn reviews are not required. Regarding the additional questions, please review answers to 1, 2, & 3 above.
7
Scope
Will IHDA provide the population for the discretionary sample, or will the offeror be required to derive the population based on audit/compliance reports and other risk-based indicators?
IHDA will provide the population for both the random and discretionary sample.
8
Scope
Will the offeror be required to provide a Single Family Field Review Appraisal, or analyze the results of an existing Field Review appraisal?
Yes, for Government (FHA/VA/USDA) post-funding reviews. Conventional files can meet this requirement with a desk review methodology, in accordance with the agency requirements.
9
Scope
Is there already a procedure in place that requires enhancing or will we be implementing procedures from scratch? If already in place, what is the current review time estimate per loan?
Currently, we follow the 30/60/30 timeline. However, beginning 9/1/23, we will be implementing 15/45/30 timeline in compliance with FNMA’s stricter requirements. Our current QC Plan identifies our 30/60/30 timeline.
10
Scope
What is the sample size for the servicing quality reviews and MERS reviews? Will this be performed on the same sample of loans selected for post-funding reviews?
IHDA maintains a modest but growing servicing portfolio, which is sub-serviced. The Servicing Quality Reviews and MERS reviews are derived from that portfolio.
11
Technology
Offeror should provide narrative response regarding their system ability to integrate with Encompass: From a system integration perspective, what information do you anticipate being required to be moving from Encompass to the Vendor's systems, and what systems do you anticipate moving from the vendor's QC systems to Encompass?

- Will documents and other loan specific information be required to be pulled directly from Encompass to vendor systems through an API call?

- Once QC checks have been completed, do you anticipate any information going from the vendor's system to Encompass?

We do not require that documents and other loan specific information be pulled directly from Encompass to vendor systems through an API call. We are interested in the capacity for which the vendor’s system can be integrated for the purpose of delivering loan files and information, however.

12
Documentation
For re-verification of information/documentation during the post-funding QC review, will we be requesting the documentation from the lending partner(s)? If not provided by the lending partner(s), will we be expected to interact with the borrowers or other third parties to obtain documentation?
The vendor will not be required to interact with our originating lending partners. IHDA QC will be their point of contact. For re-verification purposes, the vendor will be required to reach out to the third parties to obtain documentation. (i.e., employer, bank, credit repository, IRS)
13
Documentation
If missing documentation is identified during the pre-funding QC, will the lending partner(s) be required to provide the missing document? What is the SLA with the lending partners to obtain and provide missing documentation?
If missing information is detected during a pre-funding QC review, the findings will be communicated to IHDA QC who will serve as the point of contact with the originating lenders. The Authority will maintain responsibility pertaining to the SLA.
14
Documentation
Will IHDA provide to the selected offeror the applicable Master Servicer, Agency, and Authority guidelines and policies and Federal, State, and Agency regulations as a basis for conducting the QC reviews? What documentation will be provided by IHDA to support the QC review?
We can provide our program requirements and our Master Servicer requirements; however, we expect that our QC vendor will have an expert level understanding of Agency requirements (FHA/VA/USDA and FNMA/FHLMC) as well as federal & state regulations.
15
Documentation
Will IHDA review and provide written notification of approval of the adequacy of the selected offerors QC review procedures and checklists for IHDA's purposes prior to the commencement of the work?
Prior to commencement of work, a Service Level Agreement will be executed.
16
Documentation
What is the variation in documents required from IHDA compared to FNMA, HUD/FHA, FHLMC, VA and USDA?
Our program requirements will be provided to the selected vendor and are available at www.ihdamortgage.org/docs.
17
Outcome
If significant document deficiencies are identified during the pre-funding QC process how is the loan handled by IHDA? Will it impact IHDA decision to purchase the loan?
Quality control identified deficiencies may impact IHDA’s decision to purchase a loan. The final decision to purchase a loan rest with IHDA’s homeownership upper management.
18
Outcome
If significant document deficiencies are identified during the post-funding QC process how is the loan handled by IHDA? Is the loan sent back to the lending partner and no longer held by IHDA?
IHDA quality control follows Agency requirements for self-reporting when post funding deficiencies are identified.
19
Outcome
What will be IHDA's involvement in reviewing results of the offeror's pre and post-funding reviews? For pre-funding reviews, will we be reviewing the initial determination made by the underwriter, or reviewing the file in parallel?
Pre-funding reviews are conducted in parallel with IHDA’s Homeownership Department compliance department. Post funding QC reviews are not parallel reviews and are conducted by reviewing the closed file imaging. All quality control reviews are reviews of the lender’s closed loan package.
20
Purpose
Why is IHDA seeking to engage an outside contractor to perform quality reviews? Is the request to engage an offeror based on normal BAU requirements, backlog, regulatory request, or a dispute?
The Authority has maintained a third-party quality control relationship for many years to enhance and enable Agency compliance in the highest of volume months.
21
Purpose
Is the output of the selected offerors services likely to be used to originate or resolve a dispute with another party that could involve litigation / arbitration?
No.
22
Purpose
Will any party other than IHDA have access to the selected offerors work products; or will otherwise rely on/benefit from the results of the engagement? If so, who?
No.
23
Location
Will any site visits to the lending partner or IHDA headquarters be required as part of the QC review? Will we be required to travel to property locations to conduct Occupancy Inspections?
The Authority does not require our vendors to visit our headquarters or our lending partners, at this time. Occupancy inspections do not require physical door knocks.

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