Solicitation R-ATL-01936.doc

SOLICITATION, OFFER AND AWARD

1.

THIS CONTRACT IS A RATED)

ORDER UNDER DPAS

(15 CFR 700)

OF

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NEGOTIATED (RFP)

Department of Housing and Urban Development

Southern Field Contracting Operations

40 Marietta Street NW, 14th Floor

Atlanta, GA 30303

Department of Housing and Urban Development

Southern Field Contracting Operations

40 Marietta Street NW, 14th Floor ATTN: Lewis Boggan

Atlanta, GA 30303

NOTE: In sealed bid solicitations, “offer” and “Offeror” mean “bid” and “bidder”.

SOLICITATION

(Hour)

(Date)

CAUTION - LATE Submissions, Modifications, and Withdrawals: Section L, Provision No. 52.214-7 or 52.215-1.

All offers are subject to all terms and conditions contained in this solicitation.

Simone Terry 678-732-2131

678-732-2459 Lewis.Boggan@Hud.gov Simone.l.Terry@Hud.gov

11. TABLE OF CONTENTS

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OFFER (Must be fully completed by offeror)

NOTE: Item 12 does not apply if the solicitation includes the provision at 52.214-16, Minimum Bid Acceptance Period

12. In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT

(See Section I, Clause No. 52.232-8)

CALENDAR DAYS

20 CALENDAR DAYS

CALENDAR DAYS

CALENDAR DAYS

(The offeror acknowledges receipt of the amendments to the SOLICITATION for offerors and related documents numbered and dated:

15A.

NAME

CODE

FACILITY

16.

NAME AND TITLE OF PERSON AUTHORIZED TO SIGN

AND

ADDRESS

OF

OFFEROR

OFFER (Type or print)

15B. TELEPHONE NO. (Include area code)

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ADDRESS IS DIFFERENT FROM ABOVE - ENTER SUCH ADDRESS IN SCHEDULE

AWARD (To be completed by Government)

19. ACCEPTED AS TO ITEMS NUMBERED

20. AMOUNT

21. ACCOUNTING AND APPROPRIATION

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10 U.S.C.2304 ( c ) ( )

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41 U.S.C. 253( c ) (2)

(4 copies unless otherwise specified)

(Signature of Contracting Officer)

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official notice.

NSN 7540-01-152-8064

PREVIOUS EDITION NOT USABLE

Prescribed by GSA FAR (48 CFR) 53.214( c )

SECTION B-SUPPLIES OR SERVICES AND PRICE/COST

1. Contract Definition

Up to two contracts will be awarded under this solicitation, one for each qualifying geographic area (see paragraph 6 below) and will be a requirements contract as defined at Section 16.503 of the Federal Acquisition Regulation (FAR) and in Section I.4, FAR clause 52.216-21, Requirements. Services or supplies provided by the contractor under this contract shall be secured by the issuance of delivery orders (for supplies) or task orders (for services). Orders shall be placed in accordance with the following clauses: FAR 52.216-18, Ordering; FAR 52.216-19, Order Limitations; and with [ ] Delivery Ordering Procedures, or [X] Task Ordering Procedures.

2. Services The contractor shall provide professional support services for real estate property sales closing services for single-family (1 – 4 units) properties owned by the U.S Department of Housing and Urban Development (HUD) located within the geographic areas described in Paragraph B.6 below for the Atlanta Homeownership Center (HOC).

3. Performance Period

This contract will have a basic performance period of one (1) year plus a four (4) one year option period. Total length of the contract, including the option periods, shall not exceed five (5) years from date of contract award.

4. Pricing

As total compensation for all services performed under this contract, the contractor will be paid according to the Contract Line Item Number (CLIN) prices listed herein. The unit price for Property Closing Services specified herein shall be inclusive of all costs, including, but not limited to, the cost of phones, postage, shipping, delivery costs, courier costs, express mail, faxing, transportation, document reproduction, wire transfer fees, audit costs, title search costs, title examination cost and all office requirement as referenced in this contract. The unit prices for the CLINS entitled Recordation Services and Title Search Services specified herein shall be inclusive of all costs specific to those services. NOTE: See Section H, Special Contract Requirements, for additional information.

5. Third Party Closings

The CLIN entitled Third Party Property Closing Services (CLIN 004) in the following unit pricing schedule represents the unit price for the closings where a third party performs the closing. Third party closings are identical to a non-third party closing with the exception the Contractor is not required to prepare the HUD-1.

6. Geographic Areas:

NORTHEAST INDIANA consisting of the following counties: Adams, Allen, Blackford, DeKalb, Delaware, Elkhart, Grant, Huntington, Jay, Kosciusko, LaGrange, Madison, Noble, Randolph, Steuben, Wabash, Wells and Whitney

NORTHWEST INDIANA consisting of the following counties: Benton, Boone, Carroll, Cass, Clinton, Fountain, Fulton, Hamilton, Howard, Jasper, Lake, LaPorte, Marshall, Miami, Montgomery, Newton, Parke, Porter, Pulaski, St. Joseph, Starke, Tippecanoe, Tipton, Vermillion, Warren and White

NORTHEAST INDIANA

ITEM NO SUPPLIES/SERVICES EST QTY * UNIT PRICE TOTAL AMOUNT

Base Year

CLIN 001: Property Closing Services 1274 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 127 __________ _____________

CLIN 005: Aborted Sales (See Note 1 below) 255 __________ _____________

CLIN 006: Travel (See Note 2 below) 1 __________ ____________

TOTAL

ITEM NO SUPPLIES/SERVICES EST QTY* UNIT PRICE TOTAL AMOUNT

Option Year 1

CLIN 001: Property Closing Services 1401 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 140 __________ _____________

CLIN 005: Aborted Sales (See Note 1 below) 280 __________ _____________

TOTAL _____________

ITEM NO SUPPLIES/SERVICES EST QTY* UNIT PRICE TOTAL AMOUNT

Option Year 2

CLIN 001: Property Closing Services 1542 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 154 __________ _____________

(See Note 1 below) 308 __________ _____________

Option Year 3

CLIN 001: Property Closing Services 1696 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 169 __________ _____________

(See Note 1 below) 339 __________ _____________

Option Year 4

CLIN 001: Property Closing Services 1865 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 186 __________ _____________

(See Note 1 below) 373 __________ _____________

NORTHWEST INDIANA

ITEM NO SUPPLIES/SERVICES EST QTY * UNIT PRICE TOTAL AMOUNT

Base Year

CLIN 001: Property Closing Services 1274 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 127 __________ _____________

CLIN 005: Aborted Sales (See Note 1 below) 255 __________ _____________

CLIN 006: Travel (See Note 2 below) 1 __________ ____________

ITEM NO SUPPLIES/SERVICES EST QTY* UNIT PRICE TOTAL AMOUNT

Option Year 1

CLIN 001: Property Closing Services 1401 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 140 __________ _____________

(See Note 1 below) 280 __________ _____________

Option Year 2

CLIN 001: Property Closing Services 1542 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 154 __________ _____________

(See Note 1 below) 308 __________ _____________

Option Year 3

CLIN 001: Property Closing Services 1696 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 169 __________ _____________

(See Note 1 below) 339 __________ _____________

Option Year 4

CLIN 001: Property Closing Services 1865 __________ _____________

CLIN 002: Recordation Services (See Note below 3) 1 __________ _____________

CLIN 003: Title Search Services (See Note below 4) 20 __________ _____________

CLIN 004: Third Party Property Closing Svcs 186 __________ _____________

(See Note 1 below) 373 __________ _____________

* See paragraph I.5 FAR Clause 52.216-21 Requirements (Oct 1995) NOTE 1: For CLIN 0005 (aborted Sales), the government shall pay 25% of the fixed unit rate for

CLIN 0001Property Closing Services NOTE 2: CLIN 0006 (Travel) is for one time training purpose only in the base year NOTE 3: CLIN 002 Recordation Services, See Task C.5.7 Additional Services of the Statement of

Work NOTE 4: CLIN 003 Title Search Services, See Task C.5.7 Additional Services of the Statement of

Work

SECTION C- STATEMENT OF WORK (SOW)

C.1 GENERAL

C.1.1

SCOPE

A. Purpose. The Closing Agent shall proactively work with HUD’s Asset Managers; any successor Closing Agents and the Government Technical Representative (GTR) and Government Technical Monitor (GTM) to ensure closings are prepared timely. The Closing Agent shall perform to meet or exceed the performance standards specified in this contract. Occasionally the purchaser may choose to use a third party to perform their closing. In these instances, the Closing Agent (or a bonded agent) is required to physically represent HUD at all third party closings.

B. Objectives. The primary objectives of this contract are to:

1. Proactively represent HUD’s interests at the sales closing.

2. Close on the sales contract in accordance with section C.5.

3. The Closing Agent shall have a closing agent office located in the contract area. The Closing Agent shall ensure closings are to be held at the closing agent’s office (if the office is no more than 60 miles from the HUD property that is being purchased) or at a professional office facility located no more than 60 miles from the HUD property that is being purchased.

4. Ensure HUD funds received are accurately and timely provided to Treasury, and

5. Accomplish the closings with error-free closing documents.

C. Results and Outputs. The Closing Agent’s performance under this contract shall ensure:

1. Closings are fully and accurately completed and reconciled in accordance with section C.5.

2. HUD funds are wire-transferred to Treasury.

3. The Closing Agent’s internal quality management will ensure minimal errors in processing all requirements; and

4. HUD reserves the right to utilize customer service surveys to reveal whether or not the Closing Agent is providing outstanding customer service to purchasers and real estate brokers (thereby reflecting a positive image of HUD).

C.1.2

BACKGROUND

A. Single Family Mortgage Insurance Program. The Federal Housing Administration (FHA), an agency of the United States Department of Housing and Urban Development (HUD), administers the Single Family Mortgage Insurance Program. Upon default and foreclosure of an FHA insured loan, the lender files a claim for insurance benefits. In exchange for payment of a claim, a lender conveys a foreclosed property to HUD. HUD, through an Asset Manager, then manages and sells a sizable inventory of single family homes in a manner that promotes homeownership, preserves communities and maximizes return to the FHA insurance fund. To complete the sales of the properties, HUD requires the services of closing agent (referred to as “Closing Agent” hereafter) to perform all necessary closing activities on its behalf.

B. Interaction/Impact. Performance under this contract will involve interaction with homebuyers and their representatives in the real estate community, mortgage lenders, non-profit housing and advocacy organizations, staff from HUD’s Homeownership Center (HOC), and other service providers under contract to HUD such as the Asset Managers. Additionally, this contract may be impacted by changes in regulation or legislation, and housing policy initiatives identified by the White House or the HUD Secretary.

C.1.3 INSURANCE, LICENSES, CERTIFICATION AND PERMITS

A. The Closing Agent shall obtain necessary licenses, insurance certifications, and permits required in the performance of the contract (whether required by common law, practice or otherwise) and comply with any federal, state, county, municipal and local laws, codes and regulations and restrictions applicable to the performance under this contract. A copy of all the Closing Agent’s required licenses, insurance certifications and permits shall be provided to HUD at the time the proposal is submitted.

B. The Closing Agent shall notify HUD within one business day of the receipt of any suspension or revocation of the aforementioned licenses, insurance certifications, and permits.

C. The Closing Agent shall maintain an Errors & Omissions Insurance Policy/ Malpractice Policy with minimum coverage as follows: $250,000 per incident, $2 million per year.

D. The Closing Agent shall maintain a Blanket Fidelity Bond/ Employee Dishonesty Insurance Policy with minimum coverage as follows: $250,000 per incident, $2 million per year.

C.1.4 QUALITY CONTROL (QC) PLAN

The Closing Agent shall establish and maintain a complete QC plan to ensure the requirements of the contract are provided as specified. Two copies of the Closing Agent’s preliminary plan shall be provided to the contracting officer no later than submission of its contract proposal. The Closing Agent shall provide two complete copies to the Contracting Officer as any updates/changes occur. The Closing Agent shall submit a final copy of the QC Plan within 10 days of contract award. HUD reserves the right to recommend changes to the final QC Plan. The plan shall include:

1. Identification of the tools the Closing Agent will use to ensure all required time frames in the contract are met.

2. A QC review system covering all of the service requirements listed on the Performance Requirements Summary (See section J). It shall specify the requirements to be reviewed on a schedule as determined by HUD and the title of the individual(s) who will perform the reviews. It shall also specify how records of all reviews conducted by Closing Agent personnel will be maintained, including documentation of corrective action taken when reviews reveal discrepancies, and where those records will be maintained to ensure availability of access to HUD personnel throughout the term of the contract; and

3. Adequate internal quality control measures shall ensure that:

a. files and file documents are managed and controlled to prevent any loss of documents;

b. funds received are paid out in a proper and timely manner; and

c. files are reconciled in a timely manner.

C.1.5 QUALITY ASSURANCE

HUD will develop a quality assurance plan to be used to provide contract oversight. The plan will include various methods of assessing performance, including 100% sampling and/ or partial sampling at HUD’s discretion. HUD reserves the right to perform on-site reviews at any time during the performance of this contract. When the method of surveillance is a review of samples during on-site reviews, the period reviewed will be since the last on-site review or as determined by HUD. Unless otherwise determined by HUD, where partial sampling is indicated, the results of the sampling are to be considered representative of the Closing Agent’s performance on the entire workload during the period in review. (See section J)

C.1.6 NORMAL WORKING HOURS

The Closing Agent shall maintain the office to conduct closings for assigned properties and provide service from 8:00 AM to 4:30 PM, local time in the geographic area, Monday through Friday, with the exception of recognized Federal holidays (Section F.4) and other industry-accepted days to be closed, (e.g., Friday after Thanksgiving) as agreed upon between the Contracting Officer and the Closing Agent.

C.1.7 RECORDS MAINTENANCE

A. Throughout the entire life of the contract, the Closing Agent shall maintain a record keeping system which will ensure that documents are:

1. properly and promptly filed upon receipt;

2. not lost or misplaced;

3. easily and promptly retrieved upon request by the GTR or GTM, Contracting Officer, or any other authorized person; and

4. maintained with complete confidentiality.

B. Maintain the complete record of each closing, keeping all information confidential as directed by the GTR/GTM or designee. Retain all pertinent records throughout the life of the contract. At expiration of contract, provide all such records to the GTR/GTM or designee immediately. Minimum records to be maintained include:

1. Bank statements and proof of deposits for the escrow account;

2. Proof of wire transfers of proceeds including the wire confirmation number provided by the financial institution initiating and executing the wire;

3. Copies of cancelled checks for disbursements (including the property address, FHA case number and notation of types of expenses);

4. A log of all payments made (reflecting the FHA case number, date, amount, purpose, and if payment was made at closing or outside of closing);

5. Copies of each document related to the closing performed; and

6. Copies of all receipts for actual cost reimbursements.

C.1.8 CUSTOMER SERVICE

Inasmuch as the Closing Agent’s performance reflects directly on the Department, customer service is a priority under this contract. The Closing Agent shall work to perform the highest level of customer service to HUD’s homebuyers and real estate brokers. HUD reserves the right to provide customer satisfaction surveys or other methods as determined appropriate to evaluate performance from the perspective of the buyer and the real estate broker.

C. 2

DEFINITIONS/ACRONYMS

For purposes of this contract, the following definitions/acronyms shall apply:

“ACCEPTABLE QUALITY LEVEL (AQL)” – The level of performance required of the Closing Agent in order to be considered acceptable.

“AFFILIATE” – Any firm or individual in which the Closing Agent, any principal officers, managers, staff, or immediate family members have any identity of interest. This would include, but is not limited to, interests through investment, common ownership, joint venture, subcontracting relationship, or familial relationship.

“ASSET CONTROL AREA (ACA)” – An established area for which there is an agreement between HUD and a local county or state government or approved nonprofit organization to purchase HUD-owned properties and future HUD acquisitions.

“ASSET MANAGER” - The ASSET MANAGER is under contract to HUD to be the entity designated to act on behalf of HUD with regard to sales closings and furnishings of sales contracts to the closing agent.

“ASSIGNED CLOSING” – A sales transaction for which the Closing Agent has received an executed copy of the Sales Contract (HUD-9548) from the Asset Manager.

“AUDIT” – Financial account reconciliation based on accepted accounting industry standards.

“CANCEL” – To call off, usually without expectation of conducting or performing at a later time.

“CLOSING” or “SALES CLOSING” – The meeting at which the real estate transaction covered by the HUD-9548 executed by HUD and a purchaser is consummated, including (1) execution or delivery (or both) of all necessary documentation (in proper form), (2) funding of the purchase price and (3) disbursement of all proceeds in accordance with the HUD-1 settlement statement.

“CONTRACTING OFFICER” – A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.

“DAY” – Unless otherwise specified in the contract, a business day.

“DELAY” – To put off. Postpone. To stop, detain or hinder for a time with the expectation of conducting or performing at a later time.

“FHA” – The Federal Housing Administration.

“GTM” – The Government Technical Monitor.

“GTR” – Government Technical Representative.

“HUD” – The U.S. Department of Housing and Urban Development. The terms “Department of Housing and Urban Development,” “Department,” “HUD,” “Seller” and “Government” shall be synonymous and may be used interchangeably in this contract.

“IDENTITY OF INTEREST” – An individual, corporation, partnership, joint venture, limited liability company, or other entity directly or indirectly controlling or controlled by or under the direct or indirect common control with the Closing Agent. This includes one in which the owners, managers, principal officers, or staff have any familial relationship with the owners, managers, principal officers, or staff of the Closing Agent.

“KEY PERSONNEL” – For this contract are defined as the on-site contract manager, and alternate on-site contract manager, responsible to oversee document preparation and closings. Additionally, the person responsible for the contract and anyone who may make decisions on his/her behalf (e.g., president, legal assistant, etc.) will be considered as key personnel.

“METHOD OF SURVEILLANCE” – The primary inspection methods the Government will use to evaluate the Closing Agent’s performance in meeting the performance requirements.

“OFFICE” – A place of business, located within the boundaries of the geographical area covered by the contract, which is fully staffed and equipped to perform all the requirements of the contract.

“P260” – An internet based system that will serve as the primary system of record for all REO case management transactions. This system will assign each HUD-owned property for Vendors to track the disposition activity from conveyance to sale.

“PERFORMANCE STANDARD” – The performance requirement for each listed service which the Closing Agent is required to perform.

“SCHEDULED CLOSING” – A closing is considered to be a scheduled closing when an approved pre-closing package has been received from the Asset Manager.

“SERVICE REQUIREMENT” – The primary performance requirements specified in the SOW. Only those requirements deemed to be most important are listed with an established standard.

“TABLE FUNDED” – All funds in the transaction are received and disbursed at time of closing, unless table funding is prohibited by state statute and approval has been given by the GTR.

“THIRD PARTY CLOSING” – Any instance where a purchaser/funding lender uses a closing agent other than HUD’s contracted closing agent.

“THREE-WAY ESCROW ACCOUNT RECONCILIATION” – a reconciliation of book balance, bank balance and escrow trial balance (i.e., list of files and their balances).

C.3 GOVERNMENT FURNISHED PROPERTY: NOT APPLICABLE

C.4 CLOSING AGENT FURNISHED ITEMS

A. The Closing Agent shall establish and maintain a fully staffed, equipped and supplied office in the geographic area of the contract and provide all necessary facilities, materials, supplies, equipment, supervision and personnel to perform the Real Estate Closing Services, as required in this Statement of Work.

B. The Closing Agent shall assign Key Personnel whose names were identified in the proposal and who are integral to the performance of the task requirements. The Closing Agent shall represent/acknowledge that all personnel assigned to this contract are capable of working independently and with demonstrated knowledge, skills and expertise in their respective areas necessary to perform all assigned duties. If the Closing Agent’s personnel do not possess the expertise necessary to perform the tasks required in the contract, then the Closing Agent shall be responsible for appropriate training and/or replacing personnel. Key Personnel shall be available during normal duty hours to meet with HUD staff to discuss problem areas and shall have full authority to act for the Closing Agent on all contract matters relating to daily operations of the contract.

C. The Closing Agent is fully responsible for any work performed by its subcontractors.

D. The Closing Agent is required to have at least one office within the contract area. The Closing Agent shall ensure closings are to be held at the closing agent’s office or a professional office facility no more than 60 miles from the property.

C.5 SPECIFIC TASKS AND DELIVERABLES

C.5.1 Task 1 Escrow Account

The primary objective of the escrow account is to maintain funds for closings of HUD-owned properties. For special incentive programs offered by HUD to homebuyers and brokers, closing instructions shall be provided by the Asset Manager with the contract package.

1. The Closing Agent shall establish a non-interest bearing escrow account (unless state law requires an interest-bearing account) for all sales proceeds, including earnest money deposits, loan proceeds, and purchaser’s funds presented at closing, in the name of the Closing Agent with the designation: “As Trustee for the U.S. Department of Housing and Urban Development.” In the event that the state law requires an interest-bearing account, documentation to verify this requirement must be provided to the GTR and Contracting Officer. The Atlanta HOC REO Director, GTR and Contracting Officer shall have written authorization from the Closing Agent directing the financial institution holding the escrow account to grant the Atlanta HOC REO Director, GTR and the Contracting Officer immediate access, upon request, to all account information including, but not limited to, read-only online access. A copy of written authorization for account information access shall be submitted to HUD within 10 days of contract acceptance. All distributions of funds shall be made from this account. The cost of maintaining and operating this account is at the expense of the Closing Agent. This escrow account shall be used only for purposes of this contract and, in the event the Closing Agent has multiple contracts with HUD, the Closing Agent shall ensure that a separate account is maintained for each contract area and shall not comingle funds for different areas. The escrow account shall be established in a bank that gives credit for deposited funds immediately upon clearance, and has the capacity to transmit all of the information contained in the SAMS-1103. The Closing Agent shall enter into a letter of agreement with its bank that upon demand by the Atlanta HOC REO Director, GTR or the Contracting Officer, the account will be re-titled into HUD’s name. The Closing Agent is to be the sole custodian of the HUD Trust account. The Closing Agent may not subordinate HUD Trust account responsibilities or allow account access to its affiliates. If at any time the Closing Agent is unable to continue compliance with these requirements, the Closing Agent shall immediately notify the GTR or GTM and the Contracting Officer. Such notification shall include proposed actions to achieve compliance. The Closing Agent shall provide a copy of its monthly bank statement to the GTR or GTM on a monthly basis within ten (10) days after receipt of the monthly bank statement from the bank.

2. As soon as possible following termination or expiration of this contract, but no later than 90 days following such termination or expiration, the Closing Agent shall close the escrow account and provide HUD with a cashier’s check for any balance in the account. Within 30 days following closing of the account, but no later than 120 days following the termination or expiration of the contract, the Closing Agent shall provide HUD with an appropriate reconciliation of all funds covered by said cashier’s check, including a copy of the final bank statement showing a zero balance in the account

3. The Closing Agent shall notify HUD of the full names of each individual designated with signatory authority on each contract escrow account.

4. The Closing Agent shall notify HUD of the full names of each individual authorized to execute wire transmittals.

5. The Closing Agent shall conduct on a monthly basis three-way escrow account reconciliations.

6. The Closing Agent shall present an annual escrow account audit by an independent accounting firm that acknowledges that it has reviewed the 12 previous months three-way escrow account reconciliations and provide a detailed description of the problems detected in the audit and steps that should be taken to rectify the problems. The annual escrow audit shall be due to HUD within 30 days following the annual anniversary of the contract award.

7. The Closing Agent shall disclose in writing to HUD the results of any escrow account audits conducted by its title insurance carriers within 3 business days of receipt. In the alternative, the Closing Agent may sign a release of information authorizing the title insurance carrier to release information regarding the escrow account audit directly to HUD. Any information pertaining directly to confidentiality of the closing agent’s clients may be redacted from the audit report via black out.

C.5.2 Task 2 Pre-closing Activities

A. The Closing Agent shall perform all pre-closing actions including, but not restricted to those detailed below, to ensure the closing occurs as scheduled.

1. Open Closing File.

The Closing Agent shall open all closing files and deposit earnest money funds, if applicable, no later than three business days after receipt of the contract package from the Asset Manager. The contract package shall include:

a. A signed sales contract (HUD 9548) with any addendums and amendments. Within 48 hours of assignment, the Closing Agent must ensure it receives from the Asset Manager the HUD 9548-D, Individual Owner-Occupant Certification addendum if line 8 on the 9548 Sales Contract is checked “owner occupant.” If the Closing Agent does not receive the 9548-D, it is not to proceed with the closing;

b. Title evidence (when available);

c. Documentation regarding status of rents due to HUD (when purchaser is HUD’s tenant); and

d. Bulk Sales listing (if applicable).

2. Earnest Money.

The closing agent shall hold the earnest money unless prohibited by state law or regulation.

3. Title Search.

The Closing Agent shall order a minimum of a 30-year title search and forward the report to the Asset Manager within seven (7) business days of assignment. If the results of the search reveal any federal government interests, the Closing Agent shall consult with the GTR prior to forwarding the report to the Asset Manager.

4. Written Notification. The Closing Agent shall provide written notifications as required.

a. No more than two business days after the receipt of the closing file, the Closing Agent shall provide notification of contract receipt to the real estate agent. The letter shall include a notification of assignment, the file number, the name of the closing officer, the latest possible closing date, the terms of any extensions, and a request for the establishment of a firm closing date. The package shall also include a letter to the buyer notifying him/her that:

(1) HUD does not require the buyer to obtain owner’s title insurance as a condition of the purchase;

(2) If the buyer elects to obtain owner’s title insurance, they may elect to purchase owner’s title insurance from any firm offering such insurance if selecting a firm other than the closing agent will not cause any delays in the closing;

(3) If the closing agent is an agent for the selected title insurer and performs the service of issuing the title policy for that title insurer, the closing agent may obtain a fee from the title company in addition to its HUD closing fee.

b. The package in 4.a. shall include notice to the broker requiring that the broker obtain a signed acknowledgement from the buyer as to whether or not owner’s title insurance is desired, and if so, the identification of the title insurance company the buyer will use. This acknowledgement shall be returned from the broker no later than ten (10) days from receipt. The Closing Agent shall then facilitate all communications with the title insurance company selected by the buyer.

c. Not less than ten (10) business days prior to the most recent scheduled closing date, the Closing Agent shall provide the selling real estate broker with written notification of a firm closing date. If a firm closing date cannot be established the Closing Agent shall provide a written explanation for the delay.

d. The next business day after the last closing date stated in the contract, if no closing has occurred, the Closing Agent shall notify the broker in writing that the sale did not close and that the Asset Manager was notified that the closing was cancelled.

5. Deed and Closing Instructions.

a. No later than three (3) business days after receipt of a written request for closing, or receipt of accurate loan documents from a lender, the Closing Agent shall notify the Asset Manager of the date of closing, and accurately prepare the pre-closing package and forward it to the Asset Manager for approval and signature.

b. The pre-closing package shall include:

(1) Special Warranty Deed;

(2) When paying Homeowners Association (HOA) fees or taxes on the HUD-1, the Closing Agent is instructed to show the total amount paid in the appropriate column, but break out any penalties or interest. The Closing Agent must receive the HUD GTR advanced approval the Asset Manager received in order to allow the inclusion of any penalties or interest on the HUD-1.

(3) Seller’s Affidavit (if applicable);

(4) Owner Occupant Certification addendum (if applicable);

(5) Copy of earnest money check (if held by closing agent);

(6) Closing Agent certification explaining any invoices, which require payment (hard copy invoices to be included with post-closing package);

(7) A copy of Good Neighbor Next Door (GNND) documents (if applicable);

(8) HOA and/or tax invoices; and

(9) If there are penalties or interest charges due which are the responsibility of the Asset Manager, those expenses shall not be reflected as a seller expense on the Form HUD-1, Settlement Statement, but must be funded at closing by the Asset Manager. Note: The Asset Manager is responsible for timely payment for all invoices, such as taxes, HOA fees, etc., during HUD’s ownership. Any penalties or interest incurred during HUD’s ownership will be the responsibility of the Asset Manager.

c. The Asset Manager is prohibited from executing deeds more than five (5) business days prior to the actual date of closing. Once the deed is executed, it must be returned within two business days if the closing fails to take place as scheduled unless the closing is rescheduled for a later date and the GTR grants an extension.

d. The Asset Manager must return the approved HUD-1 within two (2) business days of receipt. For the inclusion or payment of any liens on the HUD-1, Closing Agent must receive the HUD GTR approval the Asset Manager received in order to allow the lien payment on the HUD-1. If applicable, the Asset Manager must provide the necessary documentation, along with the returned approved HUD-1, as proof the requirements for the flood insurance requirements as outlined below in (1) and (2) have been met.

(1) Flood Insurance Requirement – As a condition of sale, purchasers of all HUD homes located in a special flood hazard area and where flood insurance is available through the National Flood Hazard Insurance Program are required to obtain flood insurance. Coverage shall be in an amount equal to or greater than the replacement value of the improvements, as indicated on the appraisal. Additionally, the purchase contract must also include a provision that requires the purchaser to maintain flood insurance for the duration of his or her ownership and to make flood insurance a condition of any future sale. The HUD sales contract shall include a flood insurance notification defining this requirement. The Asset Manager shall ensure that flood insurance is obtained prior to closing when required as described herein, but shall have no responsibility to monitor or enforce the post closing requirement. This requirement does not apply to vacant lots, properties being sold to ACA partners and scheduled for demolition, or properties sold without any form of federal assistance, including discounts, PMMs, sales incentives and closing costs assistance.

(2) Flood Insurance Not Available – HUD-owned properties located in special flood hazard areas in communities that are suspended from or are not participating in the National Flood Hazard Insurance Program, are not eligible for sale with FHA insurance, discounts, PMMs or other FHA assistance and must be listed uninsured.

5. Rental Monies.

The Closing Agent shall verify with the Asset Manager that all rental monies due HUD have been paid outside settlement if the buyer is a HUD tenant. If any due amounts have not been paid, the Closing Agent shall ensure such payment is made at time of closing.

6. Extension Requests.

The Closing Agent shall administer broker requests for extensions of the sales closing date. Such requests may only be accepted via the Closing Extension Request form, which includes supporting documentation, and shall be accompanied by the full non-refundable fee, in the form of cash, cashier’s or certified check, or money order. An extension may be granted only by express written approval from the Asset Manager or the GTR or GTM. The Asset Manager has full authority to waive any extension fee.

a. Not more than one (1) business day after receipt of the request, fax it and all supporting documentation (including a copy of the check) to the Asset Manager and deposit the extension funds in the escrow account.

b. If the request is approved by the Asset Manager, notify the broker no more than one business day after approval.

c. If the request is approved by the Asset Manager and the fee is waived, return the extension funds to the Broker no later than one (1) business day after approval and waiver.

e. If the request is denied by the Asset Manager, the extension fee shall be returned to the broker no later than one (1) business day after denial along with instructions to close by the scheduled date.

7. Preparation of the HUD-1.

a. Accurate preparation of the HUD-1 is critical to timely processing. The Closing Agent shall use an automated closing process software package as identified in the technical proposal to complete the HUD-1 and to minimize errors. The Closing Agent shall prepare the HUD-1 so as to facilitate a full and complete closing, including all required disbursements, collections, and deposits, at the time of closing. A copy of the HUD-1 that has been approved by the Asset Manager as well as the draft corrected by the Asset Manager, if applicable, shall be retained in the file.

b. At closing, the extension fee shall not be applied to the amount due from the buyer unless the sale closes prior to the expiration of the extension, in which case the buyer shall be credited with a prorated (based on calendar days) portion of the fee. The full amount of the fee shall be reflected on lines 104 and 404 of the HUD-1. Any credited portion shall be reflected on lines 206 and 506.

8. Cancelled contract.

a. If a contract is cancelled or fails to close, no more than one (1) business day after the failed closing, the Closing Agent shall telephonically or electronically notify the Asset Manager.

b. The Closing Agent shall return the signed deed to the Asset Manager no later than the second business day after a sales contract is cancelled or fails to close unless the closing is rescheduled for a later date and the GTR grants an extension.

c. The Asset Manager will instruct the Closing Agent in writing of the disposition of the earnest money and extension fee (if applicable) when a contract is cancelled. If no instruction is received from the Asset Manager and the sales contract has been expired for ten (10) days, the Closing Agent shall return any earnest money deposits to the Asset Manager for disposition.

B. Closings shall not be scheduled and the deed shall not be ordered from the Asset Manager until all liens, assessments, judgments and other clouds on title have been resolved and clear title to the property is ready to be transferred to the purchaser.

C. Should the scheduled closing be delayed for reasons other than having to resolve liens, assessments, judgments and other clouds on title, the Closing Agent shall notify the Asset Manager immediately of the circumstances causing the delay. Should resolution of the cause of the delay require additional time to process the deed beyond the five (5) days normally allowed under the Contract, the Closing Agent shall notify the GTR and request an additional specific amount of time to hold the deed in its possession pending resolution of the cause of the delay. The GTR shall reasonably and expeditiously evaluate the merits of each such request and promptly notify the Closing Agent of the additional amount of time, if any, that the Closing Agent shall be permitted to retain the deed. The Closing Agent shall not hold the deed for any length of time beyond the five (5) days allowed by the contract, or such additional time as has been granted by the GTR, without express permission from the GTR. The closing agent shall document the case file and provide evidence that the timeframe to hold the deed beyond the five (5) business days was beyond the control of the closing agent after GTR approval was granted.

C.5. 3 Task 3 Closing Activities.

The Closing Agent shall have a closing agent office located in the contract area. The Closing Agent shall ensure closings are to be held at the closing agent’s office if the office is no more than 60 miles from the HUD property being purchased or at a professional office facility located no more than 60 miles from the HUD property being purchased. The Closing Agent shall be present in person at every closing. The closing shall be completed timely and accurately. At closing, the Closing Agent shall perform all required actions, including the following activities:

1. Obtain original signatures in blue ink on each of five sets of the HUD-1 Settlement Statement. The signed HUD-1 Settlement Statements shall be disbursed as follows: One shall be provided to the purchaser(s), one shall be provided to the selling agent, one shall be provided to the Asset Manager, one shall be kept in the Closing Agent files, and the fifth shall be forwarded to the lender (if applicable).

2. All closings shall be table funded unless prohibited by state law, in which case alternative procedures shall be established in the Closing Agent’s technical proposal.

3. Disburse any allowable expenses due and payable at time of closing. Unpaid property taxes, HOA fees, utilities, etc., for the current year, shall be pro-rated and paid at closing.

4. The Closing Agent shall physically represent HUD in person at closings being conducted by a third party. For each such closing the Closing Agent’s responsibilities are as follows:

a. Forward letter to third party closer outlining HUD’s requirements and time frames;

b. Perform title search on HUD’s behalf;

c. Prepare deed and forward for signature;

d. Ensure that the HUD-1 is accurate and includes all applicable addendums;

e. Upon receipt of the sales proceeds from the third party, deposit funds into HUD’s escrow account and initiate the request for wire transfer of the proceeds;

f. Ensure that the deed is filed for recordation. Obtain recording information/receipt from the third party for submission with the complete closing package, or within 24 hours of receipt from third party;

g. Forward the completed sales closing package to the Asset Manager, via courier, no later than the third business day after the date of closing; and

h. Ensure that any problems encountered with the third party closing are clearly addressed in the Closing Agent’s Certification.

C.5.4 Task 4 Special Programs.

A. Good Neighbor Next Door (GNND):

1. The Closing Agent shall be familiar with HUD’s GNND programs and their requirements and obtain a copy of Housing Notice 99-30 plus any updates or revisions.

2. To qualify to purchase a home through the GNND programs, a law enforcement officer or teacher must agree to execute a second mortgage and note in the name of the Department. It shall be the responsibility of the closing agent to prepare and provide for the GNND participant a Second Mortgage and Subordinate Note to be executed by the GNND participant at closing. The Second Mortgage and Subordinate Note shall conform to state requirements per the instructions contained in Appendix 111 of HUD Handbook 4165.1, REV-1,CHG-3. The Closing Agent shall record the second mortgage. The recording instructions shall instruct the recorder’s office to return the Recorded Second Mortgage or Deed of Trust to the Asset Manager at its office location or the most current published modification. The Closing Agent shall prepare a Note in compliance with federal law. The note is forgiven at 1/36 per month provided that the Borrower continues to reside in the property.

3. The following shall be placed on the Subordinate Note under paragraph c(4):

The note shall state that “I will send any amount that becomes due and payable under this Note to the Note Holder at”:

Dept. of HUD/GNND c/o C&L Service Corp./Morris-Griffin Corp.

2488 E. 81st Street, Suite 700

Tulsa, OK 74137

B. Asset Control Area (ACA)

For properties covered under an ACA Agreement, the Closing Agent shall prepare a “Closing Notice” as discussed below, the deed, an ACA Purchaser Compliance Mortgage (see Section J), an ACA Purchaser Compliance Note to Seller (see Section J), any security documents that name seller as the secured party, the HUD-1 closing statement, and any other document requested by HUD.

NOTE: HUD will pay the closing agent for the above duties only using the unit price set for the for ACA sales in CLIN 0001. Closing expenses will be paid from sales proceeds as provided for by HUD Notice 2003-02 (see paragraph B.4). If the buyer should require other closing functions and acquisition assistance from the Closing Agent as part of the process, buyer will pay for those additional services.

a. The Closing Notice

The Closing Agent shall provide purchaser with a “Closing Notice” at least ten business days before the “closing date.” The closing date shall be the day the listed properties are scheduled to be transferred to the purchaser. The Closing Agent shall designate a specific day of the week for closing these sales. The “Closing Notice” will include the following:

(1) The closing date;

(2) List of the properties that are to be conveyed on that closing date;

(3) For each property the: a) purchase price; b) other costs due from purchaser on closing date, including the prorated taxes; and c) an unsigned deed; and

(4) The HUD-1 (closing statement) for each property;

b. Once recorded, the Closing Agent will send the ACA Purchaser Compliance Note to Seller and ACA Purchaser Compliance Mortgage to:

Dept. of HUD/ACA c/o C&L Service Corp./Morris-Griffin Corp.

2488 E. 81st Street, Suite 700

Tulsa, OK 74137

C.5.5 Task 5: Post-closing Activities.

The Closing Agent shall perform all of the necessary post-closing activities, including those below, to ensure HUD is able to accurately and timely reconcile the closing.

1. Verification of Closing.

The same day that the closing takes place, the Closing Agent shall electronically notify the Asset Manager of the closing.

2. Deposit of Proceeds.

On the day of closing or the next banking day NOT LATER THAN (NLT) 2:00 P.M., deposit…