Mortgage Document Requirements Notes Assignment and Proper Transfers Document Custodian Training...

8/8/2019 Mortgage Document Requirements Notes Assignment and Proper Transfers Document Custodian Training Manual for Gse Stop Foreclosure Fruad

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Document Custody GeneralTraining Session

Presented by the Document Custody

Sub-committee Education Workgroup

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Catch the Energy!

Release Your Potential!

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Did you know that Seattle is the home of where theFISH! Philosophy emerged from a film produced by John

Christensen current CEO of ChartHouse Learning

about Seattle's world-famous Pike Place Fish Market.

Using the FISH! philosophy, it is our goal that intodays session we will:

Have some fun

Make your day

Make a difference

General Training Session Objective

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Session Agenda

Initial Certification

Recertification

Transfer Requirements

Refreshment break

Q & A

Annual or Recurring Reporting Requirements

Custodial Responsibilities

Audit Tips and Most Common Findings

Q & A

AGENDA

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Document Custody General TrainingSession

Todays Speakers Are:

Lydia Thornton Fannie Mae

Tom Kumi Ginnie Mae

Kathleen Davidson MPF Program with theFederal Home Loan Bank of Chicago

Carole Andrade Freddie Mac

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Document Custody General TrainingSession

Todays Moderators Are:

Angee Nolan JP Morgan Chase

Linda Gentry Stewart Mortgage Information

Linda Rogers- GMAC Bank Document CustodialDivision

Kelly Crunican- LaSalle Bank - Collateral Services

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Carol

Andrade

Debra

Thompson

TomKumi

Speaker

Names

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

Kathleen

Davidson

Sample Go Fish Question

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Q&A Sessions

End of Phase 1

End of Phase 2

Stick to questions related to topicsdiscussed

Q&A Cards Are for Submitting Questions

Pass them toward middle aisles

Leave Business Card Well SendTranscript.

Q & A

CARD

Q & A Sessions

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TER-MI-NOL-O-GY

For today, Agency = GSE, Investor, etc.

Related Terms:Ginnie Mae: Issuer

Fannie Mae: Lender

Freddie Mac: Seller/Servicer

MPF: PFI (Participating Financial Institution)

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InitialCertification

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Ginnie Mae


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Ginnie Mae Form Requirements

HUD11706 - Schedule of Pooled Mortgages

HUD11711A Release of Security Interest

HUD11711B - Certification and Agreement

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Ginnie Mae Initial CertificationProcedures

Document Custodian Procedures:

Form HUD 11706:

Total number of loans reported = Collateral files received

Completed for both issuer and custodian.

Filed in related Pool Master File. Form HUD 11711B:

Pool number = Ginnie Mae pool/loan package number onrelated form HUD 11706

Ensure one of the two boxes on the form has been

checked.Verify original executed form HUD 11711A for any

mortgages with a second-party security interest.

Filed in related Pool Master File.

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Ginnie Mae Initial Certification

When is the Initial Certification due to Ginnie

Mae by the Custodian?

Ginnie Mae I and Ginnie Mae II Custom Securities:

No later than 2 business days from the settlement date.

Settlement: 3rd business day

Ginnie Mae II Multiple issuer single family securities

No later than the date published by Ginnie Mae on its web site.

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Ginnie Mae Document Requirements

Original Note

Complete Endorsement Chain (Originator through

pooling issuer to blank)

Complete Assignment Chain (Originator to current

Issuer or MERS)

MOM Loans No Assignments

Assumptions Addendums, Riders, etc.

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Ginnie Mae Document Requirements

Lost Instrument Bond with Limited Liability

Requirements:

Name of issuer purchasing the bond

Loan number of current issuer

Name of original mortgagor

Legal address of property

Amount of bond

Name of surety or insurance company (Obligor)

Date bond executed by surety or insurance company

Signature of representative for surety or insurance company Appropriate POA and certification as required by surety or

insurance company

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Ginnie Mae Arm Data Verification

Interest Rate Change Date

Mortgage Margin

Interest Rate Cap Structure

Pool type suffix on Form HUD 11706 must

correlate to Interest rate cap structure on the

Note.

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Ginnie Mae Note Endorsement

Complete chain of endorsements from the loan

originator to the pooling issuer.

Endorsement in blank and without recourse by an

authorized officer of the issuer

Facsimile signatures acceptable for endorsements:

Acceptable under the laws of the relevant jurisdiction inwhich the property is located.

Not prohibited under the issuers corporate charter and by-

laws Such signature authorized by Corporate Resolution

Such signature be notarized when required by law

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Ginnie Mae Allonge Requirements

Allonges maybe used:

Acceptable practice in the jurisdiction in which theproperty is located.

Allonges mustbe:Original

Affixed (Stapled) to the Note

And clearly reference the Note

Note may reference the Allonge but suchreference is not required.

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Ginnie Mae Electronic Documents

Proposed Minimum Functional Requirements:

Registration

Transfer

Interface

Identification

Prior to accepting an eNote

Formal application submitted to Ginnie Mae

Approval received to act as a Ginnie Mae approvedeCustodian

At the present time the only eRegistry that has been

evaluated by Ginnie Mae is the MERS eRegistry

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Ginnie Mae Collateral Review

Collateral Review:

Ensure presence, completeness, accuracy andcorrectness of required collateral documents.Compliant with investor guidelines for delivery.

Complete chain of title from original lender toissuer.

Verification of data agrees with form HUD 11706.

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Fannie Mae


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Fannie Mae - Form Requirements

Fannie Mae Form 2005 (Schedule of Mortgages)

Initial certification occurs within MCCS or the DocumentCertification Application.

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Fannie Mae Initial CertificationProcedures

Document Custodian Procedures:

Form 2005 Schedule of Mortgages Lender transmits schedule electronically to both Custodian and

Fannie Mae simultaneously.

Custodian compares the Schedule of Mortgages to thedocuments: To ensure the presence of required documents and

Information on the documents corresponds to that on theSchedule.

The document custodian should review thedocuments for the individual mortgages in the pool

to ascertain:Conformity to Fannie Mae's documentation requirements Properly executed

Complete, and sufficient on their face.

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Fannie Mae Initial CertificationProcedures

Document custodian electronically

transmits its certification to Fannie Mae

through the MORNET CustodianCertification System or the Document

Certification Application.

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Fannie Mae - Document Requirements

Original Note

Riders, Addendums, etc.

Modifications, Assumptions, etc.

Complete Endorsement Chain (Originator to blank)

Original unrecorded Assignment to Fannie Mae

(MERS no assignment)

Power of Attorney

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Fannie Mae - Allonge Requirements

Comply with State, County and Federal law

Affixed (Stapled)

Preferred but not required

References the Note Loan Amount

Borrower or Address of Secured Property

Facsimile Signatures Acceptable

Requires Corporate Resolution Held by Custodian

Corporate Resolution must include the Officers Name(s)who facsimile signatures are authorized.

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Fannie Mae NY CEMA

New York Consolidation of Prior Notes

and Mortgages:

Fannie Mae requires:A recorded (or certified copy) New York Consolidation,

Extension and Modification Agreement

Form 3172

Or an equivalent form that is Fannie Mae approved.

An assignment to Fannie Mae (unrecorded, but inrecordable form)

If additional funds are advanced:New Note and Mortgage

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Fannie Mae - Cooperative Share LoanDocumentation

Co-Op Loans:

Lenders should contact their lead Fannie Maeregional office to determine specific

cooperative share loan documentationrequirements for cooperative projects locatedin most states.

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Fannie Mae NY Co-Op LoanDocumentation

For share loans from cooperative projects

located in New York:

Documentation required for initial certification: Original recorded UCC-1 Original UCC-3 - Assignment of the UCC financing statement

to Fannie Mae, in a recordable form but not filed

Certificate of Stock, shares, membership certificate, or othercontractual agreement evidencing ownership

Original Co-op Recognition Agreement

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Property Address City, State, Zip

Original Loan Amount

First Payment Date

Original Note Rate Principal and Interest (P&I)

Amortization Type (if applicable)

Mortgage Loan Type

Original Term (in months)

Balloon Call Date (if applicable)

FannieMae - Data Verification

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Fannie Mae - Arm Data Verification

First Interest RateChange Date

First PaymentChange Date

Interest Rate Ceiling

Interest Rate Floor

Original Index Value (If

applicable)

Mortgage Margin

Lookback (May 2007)

Rounding (May 2007)

ARM Plan Number, ifpresent

All of the Fixed Rate Fields plus:

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Fannie Mae - Interest Only Requirements

All ARM Fields or Fixed Fields (as applicable)

Interest Only End Date

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Fannie Mae - Electronic Documents

Custodial Requirements:

Execute an Amendment to their CustodianAgreement with Fannie Mae

Training certification guidelines foreMortgage Notes through a consultationprocess with Fannie Mae.

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Fannie Mae - Collateral Review

Data elements should match exactly what is

printed on the Schedule of Mortgages.

Custodian must assure that the data delivered toFannie Mae is the same data that was certified

by the custodian.

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Fannie Mae Collateral Review Tips:

Custodial and Issuer Collateral Review Tips:

Key Points per Required Documents Custodians shouldhave:

Clear policies and procedures.

Understand Fannie Mae certification and custody guidelines.

Exception:

Documented policy and procedures for tracking and resolvingexceptions.

Issuers should work with custodians to clear exceptionsquickly.

Quality Control: Custodian must have a quality control program that addresses

at the very least, certification, custody and release.

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Freddie Mac


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Freddie Mac - Form Requirements

Selling System

Our primary delivery and certification tool

1034E: Selling System Schedule Or Note Delivery CoverSheet

MIDANET Deliveries

Used primarily for negotiated bulk deals

1034: Fixed-Rate Schedule

1034A: ARM Schedule

1034S: Custodian Certification Summary

1034SM: Custodian Certification Schedule for MultipleContracts

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Freddie Mac - Form Requirements

Freddie Mac Form 1034E from the Selling System

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Freddie Mac - Initial Certification Process

Selling System Deliveries Certified by Custodian

Certification Status must be updated in the system no laterthan 8:00 p.m. eastern time.

Selling System Deliveries certified by Freddie

Macs DCS Form 1034E and the notes must be delivered to DCS no

later than 12:30 p.m. eastern time on the final delivery dateand certification must be entered in the system no laterthan 8:00 p.m. eastern time.

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When is Initial Certification due to Freddie Mac by the

Custodian?

All loan data and documentation is complete

Certification by approved Custodian or Freddie Mac

Freddie Mac has taken possession of all data, documentation

and/or information required for submission

Midanet Deliveries

Form 1034S or 1034SM delivered to Freddie Mac by 12:30 p.m.

eastern time on the final delivery day for the Guarantor; on theprior day to be requested funding for Cash

Freddie Mac Initial CertificationProcess

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Freddie Mac - Initial CertificationProcess

Custodian must verify the following

requirements have been met:

Loan Data:

Note = Data in the Selling System or MIDANET and Forms

1034E, 1034 and 1034A. The Custodian is not required to verify the Seller/Servicer Loan

Number.

Freddie Mac Acceptable Endorsements

Custodian must verify that the chain of endorsements isproper and complete from the original payee on the Note to

the Seller delivering the Note to Freddie Mac and that the finalendorsement is the blank endorsement from the Seller toFreddie Mac.

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Freddie Mac Initial CertificationProcess

Custodian must verify the following requirements

have been met:

Note Endorsed Using a Facsimile Signature Stamp:

Custodian may certify.

Seller is required to maintain an opinion of counsel that use ofa facsimile signature constitutes a valid signature for anendorsement on each Note so endorsed.

Assignments of Security Instruments from originalMortgagee to Seller/Servicer or to MERS prepared,executed and recorded where required.

Seller/Servicer provides Custodian with any documentationnecessary to determine whether the Seller/Servicer has electedto hold all assignments for Mortgages registered with MERS inthe Mortgage files.

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Freddie Mac - Document Requirements

Original Note

Complete Endorsement Chain (Originator through Seller

to Blank)

Complete Assignment Chain (Originator to

Seller/Servicer or MERS) MERS MOM Loans No Assignments

Power of Attorney

Assumptions

Original Riders, Addendums, etc.

Name Affidavit Only If borrower signature is not

consistent with the typed name below the signature line.

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Freddie Mac - Allonge Requirements

An Allonge may used if the following conditions are

met:

Permanently affixed to the Note.

References the borrowers name, property address, original

principal balance. The form of the allonge and its use applies with all

applicable laws.

Does not impair Freddie Macs status as a holder in duecourse or any of Freddie Macs rights under the Purchase

Documents.

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Freddie Mac - NY CEM Loans

The Original Consolidated Note for Fixed Rate,Adjustable Rate and Balloons must have thefollowing verbiage inserted at the top of thedocument: This notes amends and restates in their entirety, and is given in

substitution for, the Notes described in Exhibit A of the New YorkConsolidation, Extension and Modification Agreement dated thesame date as this note.

NY CEMA may be a certified copy and the Seller

warrants the copy is a true and correct copy of theoriginal delivered for recording.

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Freddie Mac NY CEM Loans:

Exhibit A Obligations Being Consolidated,Modified and Extended.

All notes, security instruments, assignments, consolidationsagreements and related agreements that modify, consolidateor extend prior underlying obligations and which predate the

current NY CEMA must be listed separately in Exhibit A.

Exhibit B Property Description

Copy of Schedule A to the New York Mortgage may be usedbut should be marked as Exhibit B to identify it as a NY CEMA

exhibit.

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Freddie Mac - ARM Data Verification

All of the Fixed Rate Fields

plus:

First Interest Rate

Adjustment Mortgage Margin

Percent Rounded

Periodic Cap

Life Rate Cap

Convertibility

Index

First Adjustment Minimum

Rate

First Adjustment Maximum

Rate

Lookback Period

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Date of 1st P&I Payment must be the date of the1st Interest Only Payment as stated in the Note.

Monthly P&I Payment must be the first InterestOnly payment as stated in the Note.

Modification/Conversion Date must be the firstamortizing payment date as stated in the note orby adding the number of months of interest onlyperiod to the due date for the 1st monthly payment

as stated on the note.

Freddie Mac Initial InterestRequirements

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Freddie Mac Electronic Documents

eNote

eNotes are currently purchased only on anegotiated basis and requirements are being

refined.

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Freddie Mac Collateral Review

Custodial and Issuer Collateral Review Tips:

Key Points per Required Documents:

Uniform instruments are required unless the loan hasbeen modified.

Exception:Exceptions to Guide requirements are allowed only if

expressly permitted in writing from Freddie Mac.

Quality Control:

Seller should review deliveries before forwarding for

certification to ensure all documentation is present anddata matches the note.

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Freddie Mac Initial Certification Tips

What can Custodians and Issuers do to

improve the Initial Certification Process?

Data and Documentation should be reviewedbefore delivery to ensure it is accurate.

Issuer and Custodian should be familiar withrequirements and contact Freddie Mac as soon aspossible if there is any question concerning a

requirement.

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Mortgage PartnershipFinance Program

(MPF Program)

Initial CertificationMortgage Partnership Finance , MPF and the Mortgage Partnership Finance logo are trademarks of the Federal Home Loan Bank ofChicago

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No forms required

All information is handled electronically

Notification of certification is after

funding

MPF Program - Form Requirements

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MPF Program Initial CertificationProcess

PFI sells or receives the funds for the loan.

Custodian is notified via e-mail that a funding file is

available for download.

Custodian retrieves funding file from eMPF websiteand imports into their system and either awaits the

Collateral File or once it receives the Collateral File,

it compares the data to the schedule information

used to complete the original initial certification

review.

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MPF Program Initial CertificationProcess

After receipt of the funding file, the Custodian must

upload data files to the eMPF website:

Collateral Files that have not been received by Custodian

Loans that have initial document exceptions Loans that have obtained initial certification

MPF Custody imports these files into the Loan

Custody System and reacts accordingly based on the

information provided.

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MPF Program - Document Requirements

Promissory Note: Original Note

Or Lost Note Affidavit/Lost Instrument Bond with a certifiedcopy of the fully executed-Original Note

Endorsement Complete Endorsement Chain (Originator

through PFI to blank)

Intervening Assignments:

Certified Copy of Intervening Assignments sent for recording

Complete Assignment Chain (Originator to PFI or to MERS)

Investor Assignment Original, unrecorded Assignment

from PFI to Blank

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Allonges:2 Accurate References to the Note

Needs to state without recourse

Does not need to be affixed to the Note

Note does not need to reference allonge

Facsimile Signatures Require:

PFI holds MPF Bank Harmless

Corporate Resolution

Certification of Facsimile Signature

Approval of MPF Provider

MPF Program Allonge and FacsimileSignature Requirements

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New York Consolidation and Modification

Agreement:

Original or Certified Copy of form 3172

Exhibits A, B, C and D

Original Consolidated Note endorsed in blankwithout recourse

MPF Program - NY CEMA

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MPF Program Electronic Documents

eNote:

At this time, we do not allow the delivery ofeNotes.

The MPF Provider is a member of MISMO.

We continually assess the technology needed toaddress these types of fundings.

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FISH! Philosophy Choose Your Attitude

Acquire new knowledge whilst thinking

over the old, and you may become a

teacher of others.

Helen Keller

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Initial Certification Summary:

Labels

Co-BorrowerName

Freddie Mac

Number

Term

Loan TypeNo Zip

Unique Note

Data

Elements

Electronic

Data File

Appropriate

103411706

Schedule

Form

Number

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

2005

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Initial Certification Summary

Yes PFI orApproved

Servicer to

Blank

No chain

ends w/

Servicer

Yes Servicer

to Fannie Mae

No chain

ends w/

Issuer

Final

Assignment

NO ARM Data

Convertibility,

1st Adj. Min,

Max,

Mod Date

ARM Plan,

1st Pmt.

Change Date.

Interest Rate

Cap

Structure

Unique ARM

Data

Elements

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

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Corporate

Resolution,Certification &

MPF Provider

Approval

Corporate

Resolution,

Affidavit &Attorney

Opinion

Retained by

the Seller

Corporate

Resolution

retained by the

Custodian

Corporate

Resolution

Facsimile

Signature

Requirements

Not required to

be affixed to

Note & at least

2 references

Affixed &

specifiedreferences

Preferred

Affixed but

not required &specified

references

Affixed &

referencesthe Note

Allonge

Requirements

MPF

Program

FreddieMac

Fannie MaeGinnie

Mae

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RECERTIFICATION

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Fannie Mae

Recertification

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Fannie Mae Recertification Timing &


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Fannie Mae Recertification Timing &Frequency

Required for:Change in Document Custodian

Change in Servicer

Fannie Mae or the Seller/Servicer request

recertification

Recertify within:

6Months of File Receipt OR6 Months of Transfer Effective Date (Servicing

Transfers)

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Fannie Mae Initiating the


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Fannie Mae Initiating theRecertification Process

Servicer or Fannie Mae Initiates

Service must provide:

Trial Balance orSchedule (Form 2005)

Inventory recommended within 30 Days of

transfer.

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F i M R tifi ti Diff


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Fannie Mae Recertification DifferencesFrom Initial Certification

Same Documentation Requirements

Limited Note Elements

Lender Loan IDBorrower Names

Property Address (No Zip)

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Fannie Mae - Recertification Process

Change of Issuer

Custodian no change:

Custodian must obtain manifest or schedule.

Verify borrower names, property address etc. onNote to information on manifest or schedule.

Assignment to Fannie Mae from the newservicer is present.

Complete the recertification form when all

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Fannie Mae Recertification Ongoing


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Fannie Mae Recertification OngoingRecord-Keeping

To complete the recertification, Custodian sends

Servicer: Form 2002 (Recertification Form)

Copy of Trial Balance

Or the annotated Schedule of Mortgages (Form 2005)thatreflects the composition of the MBS pool on the date of thetransfer and identifies the mortgages for which documentswere transferred.

Custodian Keeps:

Copy of Form 2002 Trial Balance or Schedule (Form 2005)

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Fannie Mae - Recertification Tips

For a successful recertification:

Review and recertify as soon as all of thedocuments are available.

Communicate any issue noted immediately.

Approach recertification with the same rigor asthe initial certification.

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Ginnie Mae

Recertification

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Ginnie Mae Recertification Timing &


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Ginnie Mae Recertification Timing &Frequency

Required for:Change in Document Custodian

Change in Issuer

Recertify within:12 Months

Note: Ginnie Mae at its discretion reserves the right to require

reviews to protect the assets pledged in the Ginnie Mae MBS

Securities program. As such, an Issuer can request arecertification from the document custodian should they feel the

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Ginnie Mae


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Ginnie Mae Initiating the Recertification Process

Issuer provides the Custodian the

following forms and all collateral files:

Copy of Ginnie Mae approval letter

HUD 11708 (Releases)

HUD 11706 (Schedule)

Trial Balance Documents

Original Legal Opinions or Updates

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Ginnie Mae Recertification


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Ginnie Mae - Recertification

Standard

Streamlined: Limited Reconciliation &

Data Elements

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Ginnie Mae Recertification Ongoing


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Ginnie Mae Recertification OngoingRecord-Keeping

Issuer & Custodian

Copy of Completed Recertification

Pool Master File

HUD11708 (Releases)

HUD11706 (Schedule) signed and dated by thedocument custodian

Trial Balance Documents

Original Legal Opinions or Updates GNMA Approval Letter

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Ginnie Mae - Tips for Successful


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Ginnie Mae Tips for SuccessfulRecertification

Organize files in pool and loan number order that

match the 11706.

Have copies of the form HUD 11708 noted on

HUD 11706 for any loans or documents released

at time of review.

Have evidence of Ginnie Mae approval letterauthorizing the transfer.

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Freddie Mac

Recertification

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Freddie Mac Recertification Timing


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Freddie Mac Recertification Timingand Frequency

Recertification required for:Transfer of Servicing w/change of

custodian

Transfer of Custody

Termination of Custodian

Move files within

30 Days of Transfer Date

Recertify within

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Freddie Mac Initiating the


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Transferee Servicer Initiates

Transferor provides the Custodian the

following forms and collateral files:

Form 1034TNote

Assignments, if applicable

Freddie Mac Initiating theRecertification Process

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Freddie Mac - Recertification On-Going


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Transferee Custodian:Paper Form 1034T& Loan List to Freddie Mac &

Servicer

Keep any related correspondence (1034T copy,transfer notices, error resolution statement, datacorrectionsetc)

Transferor Custodian:Keep Transferees Form 1035

Freddie Mac Recertification On GoingRecord Keeping

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Freddie Mac Tips for SuccessfulRecertification

Identify all issues as early as possible to

allow time for resolution.

Contact Freddie Mac concerning issues for

which answers are not clear or when there

seems to be no possible resolution

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MPF Program

Recertification

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MPF Program Recertification Timing &


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Recertification Required for:Files Returned to Custodian after Release

Files transferred to new Custodians

Requests by MPF Provider

Recertify within:Returned Files Same day

Custodian Transfers 60 days

MPF Requests Same day

g gFrequency

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MPF Program Initiating the


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No Forms for Initiating Recertification

Initiated by

PFI The action of the PFI returning the Collateral

File to the Custodian for reinstatement.

MPF - Transfer of Custodian

MPF - Requests by MPF Provider

g gRecertification Process

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Same Review as Initial Certification

Electronic Data File Provided

To Custodian by MPF Provider

Using the eMPF website

Custodian downloads data to obtain scheduleinformation

MPF Program - Recertification Process

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R ifi i S


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Recertification Summary:

Return of

ReleasedCollateral File,

Custody Transfer,

or Special Request

Change of

Custodian Only

Change of

Custodian orFannie Mae or

Servicer

Request

Change ofIssuer or

Custodian

Initiating

Event(s)

Returns:

1 Day,

Transfer:

2 Months

6 Months1 YearRecert

Timeframe

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

MaeGO FISH!

6 Months

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Electronic

Transmission1034T

2002 &

Trial Balance

11706 & Trial

Balance

Initiating

Forms

MPF ProviderTransferee

Servicer

Servicer or

Fannie MaeIssuer

Party WhoInitiates

With New

Custodian

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

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Reproducible

Release

Requests

1034T,

All Relevant

Info &

Correspond-

ence

Form 2002 &

Trial Balance or

2005 (Sch.)

Certified

11706,11708s,

Trial Balance,Legal Opinion, &

Ginnie Mae

Approval Ltr.

What

Custodians

Keep...

NO:

Same as Initial

YES:

FM Ln ID

Borrowers

Address

YES:

Streamlined

YES:

Standard

Streamlined

Variations

from Initial

Cert?

MPFProgram

FreddieMac

FannieMae

GinnieMae

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Determine that the thing

can and shall be done,

and then we shall find

the way!

Abraham Lincoln

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Document Custody General Training


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Session

COFFEE BREAK TIME!

PLEASE RETURN FOR IN 25 MINUTES

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Q & A Session

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TRANSFERS

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Fannie Mae

Transfers

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Fannie Mae - Transfer Types


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Fannie Mae - Transfer Types

Servicing Transfers:

During Sale to Fannie Mae (Concurrent)

After Sale to Fannie Mae

Custodian Transfers:Servicing Transfer

Requested Transfer

Partial Pool Transfers Acceptable

Concurrent Transfers Acceptable

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Fannie Mae Transfer Notification


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Fannie Mae -Transfer Notification

Lenders Initiate Transfers:

Trial Balance OR

Form 2005 (Schedule)

2003 If:

New Transferee Servicer/Custodian Relationship

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Fannie Mae - Transfer Processing


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Fannie Mae Transfer Processing

System Tracking:

Ongoing Relationship with Servicer

Endorsement Chain Ends: Seller to BlankAssignment Chain Ends: Servicer to

Fannie Mae

Lender to Provide MERS Information

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Ginnie Mae

Transfers

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Ginnie Mae - Transfer Types


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Ginnie Mae Transfer Types

Transfer of Issuer Responsibilities

Transfer of Custodian Responsibilities

Multiple Sites TransferChange in Custodial location or storage

Pool Level Transfers Only

Concurrent Transfers

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Ginnie Mae - Transfer Notification


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Issuers Initiate Transfers:

Ginnie Mae Approval Required

11706 to Custodian

Must Use GinnieNet

11715 needed if:

New Issuer/Custodial relationships

New Ginnie Mae Custodian

New Custodial site

Ginnie Mae Transfer Notification

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Ginnie Mae - Transfer Processing


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System Tracking:

Issuer of Record & Pool

Endorsement & Assignment Chains:

Same as Initial Certification

Record Assignments if Transfer of Issuer

Ginnie Mae Transfer Processing

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Ginnie Mae Ongoing Record-Keeping


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Record of Completion:11706 to PPA (Pool Processing Agent)

Tracking/Storage:

Ginnie Mae Approval Letter

HUD11708s (Release Requests)

HUD 11711A or HUD11711B (if applicable)

HUD11706 (Schedule)

Trial Balance

Legal Opinions

Ginnie Mae Ongoing Record Keeping

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Freddie Mac

Transfers

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Freddie Mac - Transfer Types


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Freddie Mac Transfer Types

Concurrent Transfer of Servicing Occurs at the time the mortgage is sold to Freddie Mac.

Subsequent Transfer of Servicing After the mortgage is sold to Freddie Mac.

Transfer of Custody Result of a transfer of servicing

Servicers choice

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Freddie Mac Transfer Processing


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Freddie Mac Transfer Processing

Form 1035, Tri-Party Agreement: Signed only once for each seller/servicer number.

New 1035 if new transferee servicer/custodian relationship.

Simultaneous Transfer of Servicing with sale to

the investor and the Seller and Servicer are two

different parties: Endorsement chain should match up to the Seller of the

loan to Freddie Mac.

Last endorsement: Seller to blank.

Assignment Chain: Ends with Servicer.

Custodian should track loans based on the Servicer not theSeller.www

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Freddie Mac Ongoing Record-Keeping


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Freddie Mac Ongoing Record Keeping

Record of Completion (Transferor):

Concurrent: On-line in Selling System or 1034S forMIDANET

Subsequent: 1034T

Tracking/Storage: Form 1034E or Note Cover Sheet may be destroyed once

certification is entered in the Selling System

Form 1034 and 1034A, or an image of Form 1034 or 1034A and

Form 1034T must be retained for 3 months from certification date

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(MPF Program)

Transfers

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MPF Program -Transfer Types


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g yp

Transfer of CustodianLoans moved from one approved MPF Custodian

to another

Loans must be certified by new Custodian

Transfer of ServicingDoes not require a new Custody Agreement/

Addendum unless the transfer of servicingincludes the transfer to a new Custodian

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g

Transfers Coordinated by MPF ProviderNotificationAgreement Issues

No Standard FormsAll information is handled electronicallyCustodian will maintain electronic records for

each loan held on behalf of MPF

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MPF Program - Transfer Processing


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g g

System Tracking: Seller and Servicer

ABC Bank DEF Servicing Released

Concurrent Transfers:Servicing Transfer and Sale Simultaneous

Endorsements = Seller to Servicer and Servicer toblank

Assignments = Seller to Servicer and Servicer toblank

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y

MPF ProviderServicerLender or

ServicerIssuer onlyWho

Initiates?

Concurrent

Transfers of

Servicing?

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

YES YES YES YES

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YES (Loan

Level)

YES (Loan

Level)YESNO

Partial Pool

Transfers?

No Standard

Form

1034 Online or

Paper. 1034T via

Email or Fax

Trial Balance

or 2005

(schedule)

11706 via

GinnieNET

StandardInitiation

Form/

Method?

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

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Transfers Summary:


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Concurrent Transfer of Servicing (During Sale)

Subsequent Transfer of Servicing (After Sale)

Transfer of Custodian Responsibilities

Multiple Sites Transfer

Common

Transfer

Reasons

NONONOYES

Custodian

Stores Agency

Approval?

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

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Annual Or RecurringReporting

Requirements

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(MPF Program)

Annual or RecurringReporting Requirements

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MPF Program Custodian Reporting


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Annual OfficersCertification

Attestation of

Compliance

Due April 15th

Annually

Exhibit 2 inCustody Manual

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MPF Program Custodian Reporting


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Monthly Reports:

Loans initial certified

Govt. Loans Final Certified

Govt. Loans Not Final Certified

Loan Releases

5th Business Day of Month

Specific File Format

Fed to MPF Banks

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MPF Program - Agreements


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Internal templates distinguish between 3rd

-party,affiliate and self-Custodians.

Customized service and agreements.

Custody Agreement between MPF Provider andCustodian.

Custodian Acknowledgement executed byCustodian and PFI.

Agreements cover all pool and all facilities.

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MPF Program Reporting Requirements


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All re-occurring reports must be in the correctformat

Data on the reports must be consistent

Data on the reports must be accurate

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Fannie Mae

Annual or RecurringReporting

Requirements

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Fannie Mae - Custodian Reporting


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Annual Eligibility for Document Custodians:

Starting March 31, 2006

Audit Report Summaries

Administrative Changes

Bailee Letters

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Fannie Mae - Lender Reporting


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Form 582 (Lender Record Information)Reflects Status of Mortgage Operations at Fiscalyear-end

Due by Lender Within 90 Days of its Fiscal Year-End

Form 1002: Mtg. Bankers FinancialReportingQuarterlySubmitted Electronically

Fidelity or E&O InsuranceTo Fannie Mae Within 30 Days

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Fannie Mae - Report Significance


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Annual Statement of Eligibility: Indicates Ability to Meet Eligibility and Operational

Requirements

Audit Report Summaries:

Indicates Performance

Eligibility Criteria for Custodians and

Seller/Servicers:

Administrative Changes

Net Worth and/or External Ratings Important to Match Entity With Ratings

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Fannie Mae - Reporting Requirements


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Annual Statement of Eligibility for

Document Custodians

Due March 31st of Each Year.

Sent Directly to the Custodian Oversight andMonitoring Group at Fannie Mae.

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Ginnie Mae

Annual or RecurringReporting Requirements

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Ginnie Mae Custodian Reporting m


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Non-Liquidation Inventory:

All HUD11708s for:

Code 6

Monthly 90/180 Day Reports:

90+ Days Report to Issuer

180+ Days Report to Ginnie Mae

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Ginnie Mae - Issuer Reporting m


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Officers Required

Updated Annually

To Ginnie Mae &

Custodian Custodian To Verify

11706s, 11708s, 11715s,

Endorsements, etc.

11702 (Authorized Signatures):

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Ginnie Mae - Issuer Reporting m


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11711A & B (Security Interests):

11711B for every pool.

GinnieNETOR Hard Copy.

11711A per pool, if applicable.

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Ginnie Mae - Report Significance m


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Non-Liquidation Inventory: Accurate

Release Reasons

Annual Pool Recon: Accounting for Assets

11702: Legitimate Signers

11711A&B: Enforceable Ownership

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Freddie Mac

Annual or RecurringReporting

Requirements

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Freddie Mac Reporting m


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Custodians: Annual Eligibility Certification FormDue March 31Faxed to Freddie Mac

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Freddie Mac - Reporting m


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Seller/Servicers Report (Form 16SF):Annual Eligibility CertificationDue 90 Days after FYECompleted On-Line

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Freddie Mac - Reporting m


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Seller/Servicers Only

Submit As Needed

Significant

Organizational

Changes

1107SF Report:

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Freddie Mac - Report Significance m


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Annual Eligibility Certification Form

Certification of Compliance

Form 16SF: Annual Eligibility Certification

Report Notification/Awareness forFreddie Mac

Form 1107SF: Seller/Servicer Change

Notification Form Tracking Assets

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Reporting Requirements - Summary m


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April 15th

Cust: March

31st, S/S:

FYE + 90

FYE + 90Days

Resolution

Due w/i 120

Days

Annual

Report

Due?

YES Eligibility

Reports

YES/

Lender

Record

Information

YES PoolInventory &

11702

RequiredAnnual

Report?

MPF

Program

Freddie

Mac

Fannie

Mae

Ginnie

Mae

YES

Annual

Officers

Certification

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Reporting Requirements - Summary m


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Attestation of Compliance - Accountability

Proof of Rightful OwnershipPerformance Monitoring

Change & Asset Tracking

Common

Report

Reasons

Monthly Data

Reports

1107SF

ChangeNotification

Bailee Letter

Notification

Non-

Liquidation

90/180 Day

Reports

Unique

AgencyReports

MPFProgram

FreddieMac

FannieMae

GinnieMae

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DOCUMENT

CUSTODIALRESPONSIBILITIES

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Ginnie Mae

Document CustodialResponsibilities

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Ginnie Mae Custodial Insurance

Requirements m


154/209

Document Custodians are required to maintain insurance

coverage to indemnify Ginnie Mae against losses involvingGinnie Mae pool and loan documents in their custody.

Financial Institution Bond to include the following

coverage's: Fidelity Premises In Transit Forgery or Alteration

Financial Institution Bond must be underwritten by an

insurance carrier with an A.M. Bests rating of B+ or better

Loss Payee endorsement must name Ginnie Mae as the

loss payee

Trust Operations Errors and Omissions In excess of $500 million in Ginnie Mae pool and loan documentswww

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Ginnie Mae Fire Rating Requirements m


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Document Custodial Facilities:Effective January 1, 2007:

Facilities must provide a minimum of2 hours of fireprotection

Attested by a written statement from: Insurance company of the Document Custodian

Fire Marshall of applicable jurisdiction or independent,qualified fire protection contractor.

Statement of compliance: Updated upon any significant change in facility and

available for inspection by Ginnie Mae.

Prior to January 1, 2007:Existing approved document custodial facilities

Minimum of 1-1/2 hours of fire protection.www.Stop

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Ginnie Mae Custodial SafekeepingRequirements m


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A Document Custodian must maintain secure, fireresistant storage facilities with adequate accesscontrols to ensure the safety and security of pool andloan documents:

Access controls may be either in: Automated form

Employees to use a security card access reader to gainentry to the vault.

Electronic access record Manual Form

Requiring two employees to be present whenever the vault isentered.

Written access long maintained.

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Ginnie Mae Custodial Responsibilities m


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Ginnie Maes recommendation to Issuers

and Document Custodians:

The issuers and document custodians should

subscribe to any and all updates made by GinnieMae.

Please consult the following web site address:

www.ginniemae.gov

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Fannie Mae

Document CustodialResponsibilities

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Fannie Mae Insurance Requirementsfor Custodian m


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As of October 1, 2006, The Insurance Coverage

for a Document Custodian Must Include:

Fidelity Bond

Errors and Omissions Insurance

Coverage Limits:

E & O:

Must be not less than $1 million per claim and $10 million inthe aggregate, on a claims-made basis.

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Fannie Mae Custodial Responsibilities m


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Fire Rating Requirements:

Vault must be 2 hour fire rated.

Master Pool Retention Requirements:

Electronic or paper record for 6 years afterlast pool loan has liquidated.

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Fannie Mae Custodial Responsibilities m


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For further information you may contact: Debra Thompson

Director of Custodian Oversight & [email protected]

Or visit:

http://www.efanniemae.comor via AllRegs

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Freddie Mac Custodial InsuranceRequirements om


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Maintain the following insurance coverage's, at aminimum:

Financial institution bond, or equivalent insurance,covering any loss resulting from:

Employee dishonesty

Physical damage, destruction or loss of Notes andassignments while on custodians premises

In transit (if Custodian contractually agreed to provide)between Custodians premises and anywhere

Errors and omissions coverage including breach of duty,neglect, misstatement, misleading statement or otherwrongful acts

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Freddie Mac Custodial InsuranceRequirements om


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The required insurance coverage's must:

Be underwritten by an insurer that has a A- (A minus)or better rating according to the A.M. Best Company

Be maintained in amounts deemed adequate for the

number of Notes and assignments held in custody andappropriate based on prudent business practice

Have a deductible amount no more than the greater of5% of the Custodians (GAAP) net worth or $100,000,but not greater than $10,000,00

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Freddie Mac - Fire Rating Requirements om


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Custodial Requirements:Be equipped with secure, fire-resistive storage

facilities with controls on access to ensure the safetyand security of the Notes and assignments

Facilities must meet fire resistive requirements setby the Custodian's regulator. If no requirements setby the regulator, a minimum of two hours fireprotection.

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Freddie Mac - Custodial SafekeepingRequirements om


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Maintain Notes and assignments in such a way as toensure security and confidentiality and prohibit

unauthorized access to or use of information

contained in the Note and assignments.

Use employees who are knowledgeable in thehandling of Notes and assignments and the functions

and duties of a Custodian.

Access the electronic version of the Guide at:

http://www.freddiemac.com, or via AllRegswww.Stop

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MPF Program - Custodian InsuranceRequirements om


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Fidelity Bond The Custodian is responsible for

the provision and maintenance, at all times, of

fidelity insurance and mortgagees E&O insurance.

The insurer must be rated B+ or better or affiliatedwith Lloyds of London.

Type of Coverage Based on the total dollars of

loans held in Custody or Loans Serviced

whichever is greater

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MPF Program - Custodian InsuranceRequirements om


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Fidelity Bond:

Fidelity Insurance and Mortgagees E & OInsurance

Insurer must be rated b+ or better by the A.M.Best Company or affiliated with Lloyds ofLondon

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MPF Program Custodial Responsibilities om


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Fire Rating Requirements:

Minimum of 2 hours fire protection

Attested by Custodians insurance company, local firemarshal or an independent, qualified fire protection

contractor.

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MPF Program - Responsibilities om


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For further information regarding the MPF programplease contact:

Kathleen Davidson - MPF Custody ManagerPhone: 312-616-8049E-mail Address: [email protected]

Dawn Castell Senior Custody SpecialistPhone: 312-565-1234E-mail Address: [email protected]

Dan Melady Custody SpecialistPhone: 312-565-2605E-mail Address: [email protected]

General e-mail address: [email protected]

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Audit Tips & MostCommon Findings

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Ginnie Mae


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Ginnie Mae - Audit om


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2 Types:

On-site Custodian & Issuer reviews

Desk reviews only for RFP & risk assessment

Frequency varies for on-site & deskreviews.

On-site Reviews last 3 to 5 days.

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Ginnie Mae Custodian Audit Tips om


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Designate one audit contact.

Ensure availability of requested documents.

Keep current eligibility information.

Prepare written explanations of extenuating

factors.

Be

Prepa

red!

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Ginnie Mae Issuer Audit Tips om


178/209

Designate one audit contact.Ensure availability of requested documents.

Prepare written explanations of extenuating

factors.

List bank accounts in questionnaire.

Prepare reconciliations & bank statements for

review.

Confirm all HUD forms current & available.

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Ginnie Mae Common CustodianFindings om


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Fire-Resistance Attestation

Fidelity Bond Coverage

Errors & Omissions Coverage

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Rec rring Findings

Ginnie Mae Common Issuer Findings om


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Recurring Findings: Recurring Finding of Past Audits

Errors on 11708s (Release Request)

Errors on 11706s (Certification Schedule)

Tips to avoid repeating these items: Prepare for the audit itself. Schedule time to make sure

the supporting information is available to the reviewteam.

Make prior audit finding reports available to

management team.Q.C. review certifications on a regular basis to avoid

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Ginnie Mae Opportunities to Improve...om


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Custodians:

Continue to maintain Independence.

Issuers:Shorten pool submission cycle.

Strengthen data reporting controls.

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Fannie Mae


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Fannie Mae - Custodial Audit om


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Onsite Review Frequency:Large custodians semi-annually

Small to mid-size custodian annually

Length of Review:

Variable 2 to 3 days

Data Audits vs. Physical On-Site Audits:Fannie Mae does conduct data audits occasionally;

however these reviews do not satisfy the requirements

for a physical on-site review.

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Mortgage Document Requirements Notes Assignment and Proper Transfers Document Custodian Training...

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Transcript of Mortgage Document Requirements Notes Assignment and Proper Transfers Document Custodian Training...