Client Bulletin: January 13, 2023
To Our Client Partners:
The start of a new year naturally gives us time for reflection. At this moment, I am embracing this opportunity to consider the substantive changes we’ve made over the last year – changes that are transforming the way we do business now and into the future. Being the market leader means that we persistently set the bar higher and strive to do better. This mindset requires our dogged dedication to making improvements that make you feel good about choosing Cenlar each and every day. To get there means continually working to be more proactive, providing the very best care for you and your homeowners. On behalf of everyone at Cenlar, allow me to express our gratitude at your continued faith and confidence in us, as we work to achieve that goal. Our efforts to transform Cenlar stretch across every corner of our business, with many significant changes in people, process and technology well underway. Our most notable 2022 accomplishments include: Loan Operations
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Homeowner Experience
Technology
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Risk/ControlsAll of our advances in loan operations, the homeowner experience and technology work hand-in-hand with our focus on risk management and business controls. It starts with a proactive approach and belief that identifying, managing and mitigating risk is everyone’s job at Cenlar. That attitude has been adopted by the entirety of the business with our efforts to build the muscle of risk self-assessment in all our employees. Risk and controls accomplishments include:
Moving forward in 2023Stronger than ever? No doubt. Still, we’re pushing ahead, and building on last year’s progress. We’re an organization that’s dedicated to perpetually becoming better, more resilient than before. We have a great team, and have put together a very aggressive schedule to get things done throughout 2023. At the forefront will be our work with automation. We’re automating, for example, many of our controls with the goal of reducing manual tasks, freeing up our employees to do more creative, analytical work. There’s the added benefit that automation also helps remove the risk that comes with manual processes. Importantly, automation helps prevent errors and create a faster, more efficient process for homeowners. As an example, in early 2023, we plan on completing a full end-to-end automation process for mortgage insurance. We’ll automatically know when the insurance is no longer required, cancel it and notify the homeowner. It’s an enhancement we believe gives homeowners – and by extension you – a better experience. Similarly, we’re continuing to focus on creating best-in-class homeowner communications, with both an escrow and billing statement redesign as well as letter and email customization. While giving attention to routine homeowner needs is important, we’re also paying very close attention to the default experience, when the utmost care and attention to detail is critical. In fact, we’ve reworked the process with a multi-layered review to make sure no one goes to foreclosure unnecessarily. Helping you work more easily with us will also be center stage. In some instances that means looking inward. For example, laying the groundwork to allow you to readily access and create reporting – instead of relying on us to do so – is a focus for 2023. Another area slated for improvement is transfer operations, where our objective is to more efficiently onboard and offboard loans based on your needs. As the year progresses, we will continue to communicate with you about initiatives like these, with transparency about where we are as an organization and where we’re going. We promise to keep you in the know with regular updates in our bi-weekly Bulletin newsletter – published every other Friday – and our Centinel quarterly newsletter. It is our great pleasure to serve as your trusted partner each and every day, and we know that our collective success depends on your input. True partnership requires listening to what you have to say and taking action so we can be both responsive and anticipatory. We look forward to forging an even stronger partnership with you in 2023.
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Adjustments Due to HAF Program ChangesIn an April 2022 issue of the Client Bulletin, we updated you about the implementation of the Homeowner Assistance Fund (HAF) program, including the associated processing fees. At that time, we expected HAF to evolve, and accordingly reserved the right to review fees in the future as HAF and the related requirements mature. Today, HAF is being extended in some states beyond the original program in order to ensure funding reaches as many qualified homeowners as possible. These additions include a Mortgage Payment Assistance/Unemployment program. |
In most HAF contracts, there is language that allows the state to make adjustments like these without contract amendments. The HAF Mortgage Payment Assistance/Unemployment program is one such change. Payments for this particular program are received monthly on a recurring basis, requiring a reconciliation of total funds received, as they are lumped together by the state. As a result, we are implementing an initial Unemployment Program Fee of $250 and a monthly recurring payment processing fee of $25 for each successive monthly payment. This ensures the loan is tagged properly initially, and funds are applied correctly.
In addition, we have identified that state inquiry records delivered to us as either “I” or “Q” records are being sent multiple times. This occurs when the state identifies a discrepancy or inaccuracy in the data supplied by either the homeowner or the servicer, or when the servicer quote provided has expired (after 30 days). Due to the addition of the new Mortgage Assistance/Unemployment Program as well as the delivery of multiple state records, we are thoroughly reviewing the associated fees going back to when we began invoicing for them and will provide a credit for any fees charged in excess by the February 2023 billing cycle. We appreciate your partnership and understanding as the HAF program continues to evolve. We have been advised that the states will continue to be creative with their funds, and can develop new program initiatives through the end of 2026. We are committed to adding new initiatives as they arise, and making all necessary adjustments so that we process payments correctly for homeowners while complying with the requirements of the HAF program. Thank you for allowing us the opportunity to serve you and your homeowners. If you have any questions, please contact your Client Manager. |
How Freddie, Fannie LIBOR Replacement Announcement Affects YouAs you know, LIBOR (London Interbank Offered Rate) is set to expire in June 2023. In light of this, Freddie Mac and Fannie Mae announced on Dec. 22, 2022 that it will transition any contracts on the LIBOR index to an index based on the Secured Overnight Financing Rate (SOFR). This transition will occur the day after LIBOR’s June 30, 2023 phase-out, and affects Freddie Mac’s legacy LIBOR-indexed single-family adjustable-rate mortgages (ARMs) and Fannie Mae’s single-family ARMs and related mortgage-backed securities.
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Changes to Pandemic Dashboard Will Be Effective January 23We are updating our Pandemic Dashboard in order to improve and simplify the format as COVID support and processing continues to evolve. Files reflecting these changes will start being produced with the Jan. 23, 2023 report. The following changes have been made:
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Martin Luther King, Jr. Day Observance and Important File InfoCenlar will be closed on Monday, Jan. 16, 2023 in observance of Martin Luther King, Jr. Day. Any files received on Monday, Jan. 16 will be processed the night of Tuesday, Jan. 17. Output will be available the morning of Wednesday, Jan. 18. |