| MBA Actions Update - Mississippi |
| Wednesday, 26 April 2006 | |
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Below are recent email communications showing actions undertaken by the MBA in response to recovery efforts by the State. _________________________________________________________________________ Subject: Latest from the MDA This is the latest information
from MDA that was received by Fannie Mae and Freddie Mac. As you know, we have been working with the staff at Fannie Mae and Freddie Mac to understand fully the issues of forbearance, temporary moratorium and the suspension of payments by the Lender post-Katrina. We are committed to including such items in our definition of "past due installments". Furthermore, we have suggested language that we are reviewing to revise both our "Q & A" and our Homeowner Grant Agreement. We anticipate having such language during the first part of next week after more deliberate review. As discussed, we welcome further comments on this topic in an orderly manner. We are also committed to working with you and the lenders on these issues and other issues as we move forward and they arise. Please circulate this e-mail within industry. I wanted to personally thank you for your assistance and guidance on these issues and helping the Mississippi Gulf Coast on this program of vital importance. John John H. Rice From: Vidal, Vicki From: Vidal, Vicki Please note that my last email to the group
yesterday had a new attachment -- the response from MDA. I
have attached it again here as few noticed it. Sorry about
the confusion and lack of explanation on my previous email. From: Vidal, Vicki From: Vidal, Vicki Please note several issues in this Q&A piece: 1) deferred
payments are not within the definition of past due (we are trying
to get clarity on forbearance) Please read immediately and carefully. I will be in touch. We have contacted Fannie Mae and Freddie Mac about the "deferral" issue. Here are some emails between me and Terri or their attorneys on the subject (in fact just a moment ago I got an email from the MDA lawyers indicating they will review, I'm sure that was helped by a call from FNMA. I also think their last email from NOSEF is more helpful than the previous course of emails): Read from bottom up and please let me know of your concerns. EMAIL FROM NOSEF Ms. Vidal: Terri is out on the road this morning so I wanted to briefly respond to your email. There is not much else to say other than to emphasize the fact that our program could not alter any agreement a lender has with the borrower. for example, if a lender has agreed with a borrower that an amount will not be past due and payable until August 31 and the borrower receives a grant check on August 1, the August 31 amount cannot be deducted from the grant check under our program. This would be the same as if the lender and borrower agreed to add missed installments to the end of the amortization schedule - these cannot be unilaterally moved to the front by the lender and deducted from the grant amount. This is simply stating the obvious because a policy of our program could not allow a lender or borrower to breach an agreement (oral or written) regarding when amounts are deferred, due, past due, etc. If a lender plans on trying to use this grant money to pay amounts that are not past due, they should not Opt In and the closing will be handled by a third party closing agent. We have received many Opt In agreements to date, including Freddie Mac and Fannie Mae both of whom are advising other lenders to Opt In as well. This fact alone makes it clear that lenders have more than enough information to decide whether to Opt In or not. Joe Nosef Email TO TERRI HUDSON Terry, I'm sorry I need more info on your policy. Are you saying that if there is a forbearance agreement in place servicers cannot use the funds to bring the borrower current despite the fact those payment are past due? ... and recognizing that these f/b agreements expire in May or June? The policy is really anti-consumer. You are going to have to clarify this for me -- it is literally going to stop lenders from opting in or put servicing in a position of not extending f/b agreements to be eligible for the funds.. I have to get this word out to the members, it is very critical to their decision. There is no longer any benefit to opting in. If you are available this morning I would like to talk, but you understand this is going to create quite a stir. FROM TERRI HUDSON: Vicki - I am sorry for our delayed response. We are launching the program on the coast this week and this is the first time today I've been able to get to an office. Please see our response to your earlier email below: 1. The purpose of our definition of past due payments is to make clear that any agreements previously made by the lender and borrower will not be affected by our program. There is no additional clarification that needs to be made on this point. Also, there has been no change in our position regarding attorneys fees. 2. Paragraph 6 in the opt in agreement speaks for itself but specifically does not allow lenders to pick and choose which borrowers will be subject to the opt in agreement. 3. Your last question with regard to the 5 day notice period is unclear so we do not want to create any confusion by attempting to respond to it. If you have a follow up or want to discuss this we will be happy to. thanks to everyone for their continued hard work and focus on this most complicated process. Terri P. Hudson, CFO TO: TERRI HUDSON This is very helpful, but I do want to clarify three items. First, is the issue of deferred payments. Second is the issue of case-by-case agreement to the closing process. Third is the 5 day time line. You indicate that past due does not include deferred payments. Because "deferred payments" has a specific meaning in the industry that does not include "forbearance" or "moratorium on foreclosure," we presume this is the case here too. As you are aware, most servicers have offered forbearance from the collection of payments due (e.g., technically the payments are late, but the lender is not attempting to collect or may be attempting to collect over a longer period of time to make it easier on the homeowner than making the arrearage all due and payable at once). These forbearance agreements are set to expire soon, upon which time the borrower must begin repaying the arrearage based upon a verbal or written agreement. Also note that lenders have been paying P & I to bondholders and taxes and insurance during this time, despite not collecting them from homeowners. Lenders have offered forbearance to assist homeowners during this difficult time. We hope they will not be penalized for their good actions. Also attorneys fees are due if incurred and become part of the arrearage so those should be included in the amount past due. The standard industry definition of "past due" was one of the key selling points of the opt-in. Second, your answer to the case-by-case decision on the closing process, we presume, should be read in context of Para 6 of the Opt In agreement, whereby the lender agrees to assist with closing, but that the lender is not obligated to subordinate to the covenant or waive provisions of the security instrument if unable to get investor or bondholder approval. As a final note with regard to the 5 day turn around, we would presume that that is timeline is barring any impediment like "an injunction" or legal notice or request (trustee or investor/master servicer) etc. that may require further research or investigation. Terri/Julie, I would like to talk to you or a designee by phone about these items before I send the answers out to our members. Vicki 202-557-2861 _________________________________________________________________________ The following email was received from the MDA
following a submission of the following questions by the
MBA. From: Gresham, Julie
[mailto:jgresham@balch.com] Thank you for your continued cooperation and support during this critical time on the Gulf Coast. Julie Jarrell Gresham ______________________________________________________________________ In addition: April 14th letter from MBA to the
MDA MBA Media Plan for
Mississippi |
