Monthly Regulatory Change Management Advisory February 2022

The next month’s Regulatory Compliance Change Management conference call will take place on Monday February 28, 2022 at 3 p.m. EST. To register for the monthly call, please email compliancechgmngt@cenlar.com. For your convenience, the call will be recorded and made available to clients who are unable to attend. If you have already registered for a previous call there is no need to request registration again. Please submit any questions related to the regulatory change management to mailbox prior to the call.

Any questions related to the monthly summary, overview process or specific regulatory change items can be sent directly to compliancechgmngt@cenlar.com and the Compliance Department will respond within 2 business days of receipt (excluding weekends and holidays). 

The items listed below, while showing as “Out of Compliance” (effective date has passed and we are beyond our standard implementation timeframe) on our January report, have mostly been deemed medium or low risk. The rational for the risk rating is included and the items continues to be implemented.

• Q6323 West Virginia HB 4411 (Effective 05/27/2020): West Virginia amended the limitations regarding the amount of a final payment of an installment loan to include that the final installment may also be no more than $5 greater than any previous payment installment. This change item has been deemed to be medium risk because of the moderate number of impacted accounts and the complexity of the change. Loss Mitigation is updating matrices and procedures as well as determining remediation efforts.
• Q8146 HUD DLL 2021-02 : Indian Home Loans (Effective 2/19/2021): The purpose of this Dear Lender Letter (DLL) is to inform Lenders of further extensions for the foreclosure and eviction moratoriums (through 6/30/21), loan processing flexibilities, the Borrower’s ability to request a COVID-19 Forbearance, and broadens borrower eligibility for COVID-19 Loss Mitigation as it relates to Indian Home Loan Guarantee program (Section 184) and Native Hawaiian Home Loan Guarantee program (Section 184A). Lenders now have 120 days, from the date of completion or expiration of any Forbearance (COVID-19 or other Forbearance) to evaluate a borrower for a COVID-19 Loss Mitigation Advance and then to complete the COVID-19 Loss Mitigation Advance. This change item has been deemed to be low risk because of the limited amount of impacted accounts as well as the complexity of the change. Loss Mitigation needs to implement the Advance product for Section 184 & 184A programs. Loss Mitigation and the Default Call Center are finalizing letters, procedures, and remediation efforts.
• Q8813 SONYMA Servicer Bulletin 2-2021 (Effective 5/24/2021): SONYMA has issued Servicer Bulletin 2-2021 to supplement their March 24, June 5, September 16, October 1, 2020, and January 22, 2021 (Q8032) guidance and to direct servicers on how to assist SONYMA borrowers exiting forbearance. The bulletin includes a sample deferral and extension modification agreement. All previous guidance not revised under this Servicer’s Bulletin will remain in effect as previously prescribed. This change item has been deemed to be low risk because of the minimal number of impacted accounts and the complexity of the change. Loss Mitigation is updating matrices and procedures.
• Q9685.1 Rhode Island HB 5642 (Effective 6/23/2021): Rhode Island created specific guidance regarding elder adult financial exploitation. These statutes pertain to all financial institutions which are authorized to do business in the state. Rhode Island requires a regulated institution to report suspected financial exploitation of an elder adult to the Rhode Island Office of Healthy Aging. This change item has been deemed to be low risk because of the minimal number of impacted accounts and the complexity of the change. Customer Interactions and Compliance are updating procedures.
• Q9190.1 & 9190.2 California AB 832 (CA HBOR) – COVID-19 relief: tenancy & SUNSET Item: federal rental assistance (Effective 6/28/2021 & 12/1/2021): The Governor of California has signed legislation to protect millions of tenants from eviction in a continued effort to address what is expected to be an overwhelming number of residential evictions resulting from the COVID-19 pandemic. This bill effectively extends out the eviction moratorium in California until September 30, 2021, provided certain requirements are met as detailed further below. The bill also extends out further the date (until December 1, 2021) that a mortgage servicer must provide the borrower with a notice that gives the borrower a specific reason for the denial if the mortgage servicer denies their forbearance request. This change item has been deemed to be very high risk because of the potentially impacted accounts and complexity of the change. Default Foreclosure is finalizing letters and procedures. Loss Mitigation is updating procedures, letters, and determining remediation efforts.
• Q8351 NACHA Reversals and Enforcement (Effective 6/30/2021): With this update to the NACHA rules, Originators, Third Party Senders, and ODFIs have clarity regarding when not to initiate reversals due to failure to fund an ACH credit file. The updated reversal rule will address improper uses of reversals. This change item has been deemed to be medium risk because this is a moderately complex initiative and there are a low number of impacted accounts. ACH Management and Portfolio Transfers have process in place and are finalizing procedures.
• Q9131 MPF Announcement 2021-52: COVID-19 Related Servicing Guidance for MPF Traditional (Conventional) Loans (Effective 7/15/2021): MPF is amending their guidance regarding their deferral plans which will reduce the documentation needed for deferral plans, to remove the requirement where the Servicer must submit the form SG402. The Servicer must complete a COVID-19 payment deferral to the borrower in the same month in which it determines the borrower is eligible. If the servicer is unable to establish QRPC with a borrower on a COVID-19 related forbearance plan and the borrower is otherwise eligible, the servicer must send a solicitation for a COVID-19 payment deferral within 15 days after the expiration of the forbearance plan. The announcement provides the Payment Deferral Post COVID-19 Forbearance Solicitation Cover Letter to be used for this solicitation. This change item has been deemed to be low risk because of the limited amount of impacted accounts as well as the low complexity of the change. Loss Mitigation is finalizing letter logic.
• Q9178 USDA New COVID-19 Special Relief Measures and Existing Guidance for Servicing Impacted Borrowers (Effective 7/23/2021): The technical Handbook-1-3555 will be expanded to include COVID-19 Special Relief Alternatives. The COVID-19 Special Relief Alternatives include an option that target a 20% reduction in the borrower’s monthly principal and interest payments by offering a combination of interest rate reduction, term extension and mortgage recovery advance. The COVID-19 Special Relief Measures were made available in July with the advanced notice and servicers should continue their efforts to incorporate these updated relief measures as soon as possible. A moratorium on foreclosures and evictions is effective through July 31, 2021 and servicers are authorized to approve initial payment forbearances upon request through September 30, 2021. Servicers are expected to grant payment forbearance based on a borrower’s verbal or written attestation to financial hardship caused by COVID. Eligibility requirement are outlined further in the notice. This change item has been deemed to be medium risk because of the potential impacted accounts as well as the complexity of the change. Loss Mitigation to provide BITB updates and updated procedures. Default Reporting has processes in place and are finalizing procedures.
• Q9177 VA CIRCULAR 26-21-13 COVID-19 Home Retention Waterfall and COVID-19 Refund Modification (Effective 7/27/2021): VA has issued a circular providing a waterfall of home retention options for helping borrowers financially impacted by the COVID-19 pandemic. The circular also announces the COVID-19 Refund Modification, which is a type of loan modification specific to those borrowers in need of payment reductions when exiting COVID-19 forbearance. This change item has been deemed to be medium risk because of the potential impacted accounts as well as the complexity of the change. Loss Mitigation has processes in place and are finalizing procedures.
• Q8350 NACHA Meaning Modernization (Effective 9/17/2021): NACHA announced upcoming rules to improve and simplify the ACH user experience by facilitating the adoption of new technologies and channels for the authorization and initiation of ACH payments. The rules concern Standing Authorization, Subsequent Entries, Oral Authorization, Alternative to Proof of Authorization, and Written Statement of Unauthorized Debit via Electronic or Oral Methods. This change item has been deemed to be medium risk because this is a moderately complex initiative and there are a low number of impacted accounts. DCC and ACH Management have process in place and are finalizing procedures. Marketing is updating the web.
• Q9442 NACHA – Minor Rules Topics (Effective 9/17/2021): NACHA has published its Minor Rules Topics, which amend the Nacha Operating Rules to address a variety of minor topics related to Meaningful Modernization (Q8350). The applicable Minor Topics are related to RDFI Subsequent Request for Proof of Authorization, RDFI Subsequent Request for Proof of Authorization, Form of Receiver Authorization, and General Rule for Prearranged Payment and Deposit Entry. This change item has been deemed to be low risk because of the limited amount of impacted accounts as well as the low complexity of the change. Customer Interactions has a process in place and is finalizing procedures.
• Q9469 California AB 430 (Effective 09/23/2021): California has passed legislation amending its debt collection laws. The legislation requires a debt collector that receives a copy of a Federal Trade Commission (FTC) identify theft report and a written statement from the debtor to cease collection activities until the completion of a review. The debtor is authorized to choose to send a copy of a police report instead, but prohibits a debt collector from also requiring a police report if the debtor submits an FTC identity theft report. Additionally, the bill authorizes a person to receive information concerning a loan application filed with an entity by an unauthorized person by presenting the entity with a copy of a signed and submitted FTC identity theft report and identifying information. This change item has been deemed to be very high risk because of the complexity of the change. DCC, Research, Complaints Management, HELOC and Compliance are working on letters and procedural updates.
• Q9508 HUD DLL 2021-11 Extension of COVID Forbearance (Effective 9/30/2021) : HUD has issued DLL-2021-11 to announce an extension of COVID-19 Forbearance for the Section 184 Indian Home Loan Guarantee and Section 184A Native Hawaiian Home Loan Guarantee programs. HUD is providing an additional period of up to 6 months of COVID-19 Forbearance when the initial forbearance was requested between July 1, 2021, and September 30, 2021. HUD is also establishing an initial COVID-19 Forbearance period for up to 6 months when requested between October 1, 2021, and the end of the COVID-19 National Emergency. Finally, HUD is providing an additional COVID-19 Forbearance of up to 6 months if the initial COVID-19 Forbearance, requested on or after October 1, 2021, is exhausted and expires during the COVID-19 National Emergency. No COVID-19 Forbearance period may extend beyond 6 months after the end of the COVID-19 National Emergency or September 30, 2022, whichever is later. This change item has been deemed to be low risk because of the limited amount of impacted accounts as well as the low complexity of the change. Loss Mitigation has processes in place and are finalizing updates to the COVID Plan Code Matrix.
• Q9373.1 FNMA SVC-2021-06: Servicing Guide Announcement (Effective 10/01/2021): As was previously indicated in the FNMA SEL-2021-08 (Q9346- Applicable), Fannie Mae servicers are advised that they have updated the Lender Record Information (Form 582). They specify that servicers must have written procedures that comply with their current policy for disaster recovery and business continuity when the seller, servicer, or any subservicer contracts with a vendor or third party service provider for any critical business functions or services which could affect their ability to comply with the Lender Contract or the requirements of the Guides. A servicer must provide a copy of their business continuity procedures upon receipt of a written request from Fannie Mae. This change item has been deemed to be low risk because of the moderate amount of impacted accounts as well as the low complexity of the change. Investor Accounting & Reporting and Vendor Management are finalizing procedures.
• Q9548 MPF Announcement 2021-70 (Effective 10/08/2021): MPF Traditional has released updated guidance regarding the servicing of COVID-19 impacted loans. Servicers must provide the MPF Provider with confirmation of the Borrowers acceptance of a COVID-19 Payment Deferral. When completing a COVID-19 Payment Deferral, if a servicer determines a Borrower’s signature is not required then the servicer must submit evidence of the Borrower’s acceptance. Confirmation must be noted or attached to the original form submission through eMAQCSplus or provide evidence of the Borrower’s acceptance, such as receipt of a full monthly payment. This change item has been deemed to be low risk because of the limited amount of impacted accounts as well as the low complexity of the change. Loss Mitigation is updating procedures and letters.
• Q9547 FHA INFO 21-84 (Effective 10/09/2021): HUD has announced it has awarded a new Single Family Secretary-Held Loan Servicing contract to Information Systems & Networks Corporation (ISN) who will be responsible for servicing certain FHA Single Family Secretary-Held Mortgages. Effective October 9, 2021, all required documentation, correspondence, and telephone inquiries related to the servicing of the above-referenced mortgages must be directed to ISN. This change item has been deemed to be medium risk because of the number of impacted accounts. Loss Mitigation is working on updating procedures.
• Q9697.1 FHLMC Bulletin 2021-35 (Effective 11/01/2021): Freddie Mac has moved the process for requesting forbearance extensions to ResolveSM. As a result, the option to request a forbearance extension will no longer be available on Guide Form 105. This change item has been deemed to be medium risk because of the moderate number of impacted accounts and the complexity of the change. Loss Mitigation is using ResolveSM and is in the process of finalizing procedures.
• Q9667 Wisconsin AB 325 (Effective 11/05/2021): Wisconsin is amending the Revised Uniform Unclaimed Property Act and designating the Department of Revenue as the administrator in order to make it easier for the program to be administered. This change item has been deemed to be low risk because of the minimal number of impacted accounts and the complexity of the change. We’re pending validation that the updated Reconciliations letter is in production.
• Q9604 New York S737 Debt Collection (Effective 11/07/2021) : New York has passed a bill to amend its general business law concerning written communications from debt collectors and creditors. This bill would require debt collectors and creditors to notify debtors of the availability of alternate formats, such as large print, braille, audio compact disc, or other means selected by the debt collector or creditor. The disclosure must also include a business phone number the consumer may call to request an alternate format. This bill is designed to offer protection to debtors who suffer from vision problems by informing these borrowers the communications they are receiving can be provided in alternate formats. This change item has been deemed to be high risk because of the number of impacted accounts and the complexity of the change. Portfolio Transfers, Default Call Center, and Borrower Communications are working on updating procedure and letters.
• Q9689 GNMA APM 21-07 (Effective 11/15/2021): GNMA will allow the use of electronic signatures and remote online notarization for loan modification agreements on paper mortgages. This change item has been deemed to be low risk because of the limited number of impacted accounts and the complexity of the change. Loss Mitigation has processes in place and are finalizing procedures.
• Q9704 FHA ML 2021-27 (Effective 11/17/2021): FHA has announced updates to the HUD Single Family Housing Policy Handbook to clarify its existing requirements for appraisers and mortgagees concerning compliance with Fair Housing laws in the appraisal of properties used as security for FHA mortgages. This change item has been deemed to be medium risk because of the moderate number of impacted accounts and the complexity of the change. The Valuations Team is updating procedures.
• Q9714 USDA Forbearance Timeframes for borrowers impacted by Hurricane Ida and updated Attorney Fees (Effective 11/22/2021): USDA has released temporary guidance for the 12-month forbearance limit for borrowers who are impacted by Hurricane Ida or will be impacted by a Presidentially Declared Disaster (PDD) during the 2021 Hurricane season and are currently on a forbearance plan due to COVID-19. This announcement also notifies lenders of updates to the Schedule of Standard Attorney/Trustee Fees in the Handbook. This change item has been deemed to be low risk because of the limited number of impacted accounts and the complexity of the change. Loss Mitigation is updating procedures.
• Q9737 VA VALERI Newsflash (Effective 11/23/2021): VA issued a VALERI Servicer Newsflash with the following updates: A system deployment was completed November 18, 2021; A new Partial Claim article is available in Knowledge within VALERI which provides information on the Partial Claim program, reporting, required documents, and the VA & servicing contractor addresses; directions on submitting Partial Claim documents requiring corrections; Appraisal fee changes; and Foreclosure Attorney Fee changes. This change item has been deemed to be low risk because though there are a moderate number of impacted accounts there is a low complexity of the change. Default Invoicing and Loss Mitigation are finalizing procedures.
• Q9629 GNMA APM 21-05 (Effective 12/01/2021): Ginnie Mae has announced the creation of a new Single Family, fixed rate MBS pool type to provide for securitization of modified loans with terms greater than or equal to 361 but not more than 480 months from the pool issuance date. The new Extended Term (ET) pool is available for pool issuance in December 2021. This change item has been deemed to be low risk because of the limited number of impacted accounts and the complexity of the change. Loss Mitigation to provide BITB updates and updated procedures.
• Q7001.2 SUNSET New York SB 8428 (Effective 1/01/2022): This legislation provides edits to section 9-x of Article 1 of the New York Banking Law created by New York SB 8243. This NY SB 8428 updated NY AB 8243 by including all the same citations and adding to the repayment options the option to offer a loan modification and IF their isn’t agreement on those repayment terms to only then offer the balloon deferment, and it was amended add a reporting requirement. This change item has been deemed to be medium risk because of the moderate number of impacted accounts and the complexity of the change. Loss Mitigation is updating matrices and procedures.
• Q8777.2 SUNSET Oregon HB 2009 (Effective 1/01/2022): Due to the ongoing impact of the COVID-19 pandemic, Oregon passed a bill to establish temporary limitations on lenders being able to enforce default remedies during the emergency period. The bill includes a provision for lines of credit and makes changes to the statute governing foreclosure resolution conferences by allowing appearances by remote audio or video communication. Additionally, The Governor of Oregon issued Executive Order 21-30 to further extend the foreclosure moratorium “emergency period” underlying the provisions of HB 2009 (Q8777) to December 31, 2021. Legal recommended applying this extension as an extension of HB 2009 in its entirety. This change item has been deemed to be low risk because of the limited number of impacted accounts and the complexity of the change. Loss Mitigation and the Default Call Center are retiring letters. Loss Mitigation is updating matrices and determining remediation efforts.
• Q9657 New York SB 671 (Effective 1/02/2022): New York has passed new legislation which requires lenders and mortgage servicers to provide a single point of contact to borrowers to communicate with the lender/servicer in relation to a loan modification, or other loss mitigation alternatives. This change item has been deemed to be medium risk because of the moderate number of impacted accounts and the complexity of the change. Customer Interactions and the Default Call Center are updating procedures.
• Q9600 FHA updates to Handbook 4000.1 (Effective 1/24/2022): FHA has published updates to the Single Family Housing Policy Handbook 4000.1. The updates include enhancements and revisions to existing guidance as well as various other technical edits. This newly added language augments and enhances existing policy. This update contains revisions and additions to Handbook 4000.1 Sections I, II, III, and IV, Appendix 7.0, and the Claim Filing Technical Guide. This change item has been deemed to be medium risk because of the number of impacted accounts and the complexity of the change. Mortgage Insurance and Default Reporting are updating procedures.