R13AH0014 Q A.pdf

R13AH0014 QUESTIONS AND RESPONSES

Q. How will HUD transmit the contract package to Contractor, electronically, paper, facsimile, or other?

A. The preferred method of delivery will depend on which Asset Manager the Closing Agent is working with. If a document is required to have an original signature, then the document will be sent either overnight, by courier, or other method that will meet the expected delivery times stated in the Asset Manager contract. If a document requires an original signature, it cannot be sent electronically or via facsimile. If an original signature is not a requirement, then the majority of communication and document delivery are sent electronically.

Q. Upon receipt of the contract package, Contractor will create a work order on Contractor’s processing system. For all required transactional status updates, is it acceptable for the M&M to access or receive notifications from Contractor’s processing system or is there another desired approach?

A. All reports and status updates are to be sent electronically. The Asset Manager does not have any requirement to learn the Closing Agent’s “processing system”. If the Closing Agent’s “processing system” sends updates electronically to the Asset Manager, then that would be a sufficient way to deliver status updates. The information is to be sent to the Asset Manager. Ultimately, the Asset Manager and the Closing Agent will work together to ensure that HUD Properties are closed as quickly as possible.

Q. Does HUD require an attorney to perform all loan closings or is it acceptable for a licensed notary, when most convenient for the buyer, to perform a closing?

A. HUD requires the Contractor to “obtain necessary licenses, insurance certificates, and permits required in the performance of the contract and shall comply with any federal, state, county and municipal laws, codes and regulations applicable to the performance under this contract.”

C. 3 (a) (2) Insurance, Licenses, and Certifications “The Contractor shall obtain necessary licenses, insurance certifications, and permits required in the performance of the contract and shall comply with any federal, state, county and municipal laws, codes and regulations applicable to the performance under this contract. The Contractor shall ensure that all subcontractors comply with these requirements. Upon request, the Contractor shall provide copies of the foregoing licenses, insurance certifications and permits. At the commencement of the contract term, and thereafter upon request, the Contractor shall provide an unequivocal opinion of counsel stating that the Contractor, and each of its subcontractors, is in full compliance with all state and local licensing requirements, and that all required permits have been obtained.”

Q. What is HUD’s desired method for delivering closing instructions and closing documents to the Contractor?

A. If a document is required to have an original signature, then the document can be sent either overnight, by courier, or other method that will meet the expected delivery times. If a document requires an original signature, it cannot be sent electronically or via facsimile. If an original signature is not a requirement, then the majority of communication and document delivery takes place electronically.

Q. Will HUD allow a state licensed and insured subcontractor to manage the disbursement of sales proceeds from Contractor’s escrow account described within Section C.3.a.3 “Escrow Account”?

A. The answer to this question is no.

C. 3 (a) (3) (i) Escrow Account “The Contractor may not delegate, assign or subcontract HUD escrow account responsibilities or allow account access to its affiliates or subcontractors.”

Q. How will Contractor’s title search and examination be incorporated within HUD’s lender and owner’s title insurance requirements, if at all?

A. This question is not entirely clear. The following information is contained in the SOW:

C. 3 (b) (2) Title Search for Property Closing Services.

Although HUD does not warrant or guarantee title, HUD’s intent is to convey clear and marketable title to purchasers. As such, the Contractor shall perform a tax search and a title examination, including the land, judgment and tax records, and any other records which may contain information which affects the title or may reflect a lien, encumbrance or defect on the title, from the date of the acquisition of the title by the Secretary of HUD until the date the closing package is assigned to the Contractor. Contractor shall report to the M&M within seven business days of initial assignment of the case on the results of the search, indicating either that no defects were found or indication of any defects and the steps taken or to be taken by the Contractor to resolve the defect. The Contractor shall take actions to clear all minor title issues (such as tax liens and assignments) in such a manner as to avoid any delays in closing. Major title defects that are not routine in nature shall be brought to the attention of the M&M within one business day of discovery. If the results of the search reveal any federal government interests, the Contractor shall consult with the GTR prior to forwarding the report to the M&M.

Q. Will HUD require Contractor to verify any earnest money funds on deposit with a realtor, attorney or other party involved in the transaction?

a. If the seller’s realtor is holding the borrower’s earnest money deposit, will HUD allow Contractor to net fund the seller’s realtor’s commission through the closing disbursement process?

A. The Closing Agent will receive the Earnest Money from the Asset Manager along with the fully executed sales contract. The Buyer’s Realtor/Attorney/Other Party will not hold the Earnest Money.