Please find below our monthly Regulatory Compliance Change Management Summary as of May 31, 2022.

The next monthly Regulatory Compliance Change Management conference call will take place on Thursday, June 30, 2022 at 3 p.m. ET. 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 two 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 May report, have mostly been deemed medium or low risk. The rational for the risk rating is included and the items continue to be implemented.

• Q9373.1 FNMA SVC-2021-06 (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 medium risk because of the moderate number of impacted accounts, the complexity of the change in which 3-5 business units are impacted, and the potential regulatory scrutiny. Third Party Risk Management has sent a vendor blast and we’re pending confirmation of compliance.
• 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 moderate number of impacted accounts, the complexity of the change in which 5 or more business units are impacted, and the potential penalties associated with non-compliance. Borrower Communications is going to utilize the Metrolina vendor for sending communication in the Large Font alternate format. As of 5/31/22, Borrower Communications is sending an interim notice to NY borrowers that includes the NY Disclosure, this process will be in place until the NY Disclosure is on all the initial communications. Borrower Communications is updating statements and coupon books & New Loans and Portfolio Transfers are updating the Welcome Letter and VOD to include the NY Disclosure with an ETA of June/July. The Default Call Center and Customer Interactions are finalizing procedural updates.
• Q9779.1 FHLMC Bulletin 2021-37 (Effective 12/08/2021): FHLMC has published Bulletin 2021-37 to announce Servicing Updates. The updates address modification agreements, hardest hit funds, as well as, additional guide updates including: Borrower canceled PMI, eMortgage Delivery Requirements, Remote Online Storage, and Foreclosure/Bankruptcy/Legal proceedings for eMortgages. This change item has been deemed to be medium risk because of the moderate number of impacted accounts, the complexity of the change in which 5 business units are impacted, and potential regulatory scrutiny. Loss Mitigation is updating letters.
• Q10119 MPP Notice 2021-31 (Effective 1/01/2022): MPP has issued Notice 2021-31 to announce that effective January 1, 2022 servicers must review and approve new forbearances in accordance with the MPP Guide for Servicing Delinquent Loans, which requires that the borrower provide a written certification of hardship and that a forbearance plan be agreed to in writing. In response to the COVID-19 pandemic, MPP had previously allowed for verbal verification of hardship. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which two business units are impacted, and the potential regulatory scrutiny. Loss Mitigation and the Default Call Center are updating procedures/scripting and the COVID Plan Code Matrix.
• Q9526.2 FHLMC Bulletin 2021-31 (Effective 1/13/2022): FHLMC has issued updates to its Selling Guide. The updates address third party risk mitigation, credit underwriting, and delivery requirement updates. This change item has been deemed to be high risk because of the high number of accounts with potential impact, the complexity of the change in that 3 business units are impacted, and potential regulatory scrutiny. IT Security is updating procedures and Third Party Risk Management has distributed a vendor blast for confirmation of compliance.
• Q10001 New York S1566-A (Effective 2/01/2022): This bill requires New York State chartered banks and trust companies to provide a notice to customers that acceptance of an alternative payment schedule on a loan may have a negative impact on the customer’s credit score or rating. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2 business units are impacted, and the potential regulatory scrutiny. Due to the CARES Act, borrowers in forbearance are protected from adverse credit reporting information. All other alternative payment arrangement letters include the necessary disclosure and the forbearance letters are being updated to provide additional resource information regarding credit scores. Loss Mitigation is finalizing updates to forbearance letters.
• Q9947 HUD DLL 2022-01 (Effective 3/20/2022): This DLL provides updated loss mitigation options for Section 184 Indian Home Loan Guarantee and Section 184A Native Hawaiian Home Loan Guarantee programs. HUD is creating 3 new loss mitigation programs: COVID-19 Native Advance Loan Modification; COVID-19 Recovery Loss Mitigation Advance; and COVID-19 Recovery Native Loan Modification. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 5 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation is updating the pandemic dashboard, BITB, letters, and procedures. Default Call Center is updating scripting. Default Reporting is updating procedures.
• Q9779.3 FHLMC Bulletin 2021-37 (Effective 3/01/2022): FHLMC is updating the Guide to reflect the June 30, 2021 expiration of the mortgage assistance programs under the HHF programs. Updates to Guide Exhibit 93, Evaluation Notices, Exhibit 1100, Payment Deferral Agreements, Exhibit 1101, Disaster Payment Deferral Agreement, Exhibit 1145, Borrower Solicitation Letter, and Guide Form 710, Mortgage Assistance Application, to reflect the removal of HHF references and to add general references to mortgage assistance programs. FHLMC is requiring that Seller/Servicers have an oversight process to ensure their document custodians maintain all eligibility requirements. Seller/Servicers must notify FHLMC within one (1) business day if a document custodian no longer meets one of our requirements. This change item has been deemed to be medium risk because of the moderate number of impacted accounts, the complexity of the change in which 1-3 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation is updating forms and letters.
• Q9790.2 FNMA SVC 2021-09 (Effective 3/01/2022): FNMA is making updates to borrower-facing Guide documents to: Remove servicer instructions associated with Hardest Hit Funds since the program has expired; Inform the borrower that mortgage assistance programs may be available; Ensure consistent reference to borrower resources such as CFPB, HUD, and Fannie Mae Know Your Options website; Clarify the forbearance plan term associated with a Suspended Payment Forbearance Plan Offer; and Reduce the number of loan modification agreements to be executed and returned by the borrower. This change item has been deemed to be medium risk because of the moderate number of impacted accounts, the complexity of the change in which 3-5 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation is updating forms and letters.
• Q9928.2 MPF Announcement 2022-01 (Xtra) (Effective 3/01/2022): The MPF have provided guidance to follow FNMA SVC 2021-09 for MPF Xtra loans. FNMA is making updates to borrower-facing Guide documents to: Remove servicer instructions associated with Hardest Hit Funds since the program has expired; Inform the borrower that mortgage assistance programs may be available; Ensure consistent reference to borrower resources such as CFPB, HUD, and Fannie Mae Know Your Options website; Clarify the forbearance plan term associated with a Suspended Payment Forbearance Plan Offer; and Reduce the number of loan modification agreements to be executed and returned by the borrower. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation is updating forms and letters.
• Q10097 MPF Announcement 2022-12 (Effective 3/10/2022): This announcement adds provisions for a permanent COVID-19 Loan Modification which requires the successful completion of a Trial Period Plan and updates the waterfall to reflect that addition. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which two business units are impacted, and the potential regulatory scrutiny. Default Reporting is updating procedures/reporting. Loss Mitigation is updating letters, procedures, and BITB.
• Q10131 OLG INFO 2022-07 (Effective 3/18/2022): Office of Native American Programs (ONAP) has issued OLG INFO 2022-07 to inform lenders that ONAP has listened to lenders’ concerns about meeting the 120-day loss mitigation deadline for COVID-19 recovery options and borrowers’ continued eligibility for COVID-19 loss mitigation assistance. Borrowers are eligible for the COVID-19 loss mitigation options until the end of the national emergency. However, those borrowers whose COVID-19 forbearance ends after the national emergency are eligible for the COVID-19 loss mitigation options for 120 days after they have exited their COVID-19 forbearance. To the extent a lender needs additional time for loss mitigation, and loss mitigation will not be complete before reaching the 180 days to file for first legal, the lender must request an extension to the first legal deadline due to active loss mitigation. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2-4 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation, Default Compliance and Foreclosure are updating procedures and Loss Mitigation is also updating the COVID Plan Code Matrix.
• Q10098 HUD DLL 2022-03 (Effective 3/20/2022): DLL 2022-03 amends the re-review requirements for the COVID-19 loss mitigation options under DLL 2022-01. Lenders no longer have to re-review borrowers for a COVID-19 Recovery option when a borrower’s final loss mitigation documents have not yet been sent, unless requested by the borrower. Lenders now have until March 20, 2022 to begin reviewing borrowers who are 90 days or more delinquent for a COVID-19 Native Advance Loan Modification. This DLL also clarifies that the deadline for First Legal Action for borrowers in COVID-19 forbearance is 180 days from the date the borrower has exited forbearance. And finally, this DLL reminds lenders that the deadline for filing First Legal for borrowers not under a COVID-19 forbearance was January 27, 2022. HUD will not extend this deadline unless an extension request was submitted to HUD before January 27, 2022. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2-4 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation and the Default Call Center are updating procedures and scripting.
• Q8501 FHA SF Handbook 4000.1 (Effective 3/31/2022): This revision to the FHA Single Family Housing Policy Handbook, or Handbook 4000.1 (Handbook), is being published to update existing sections. Updates are to: Section III – Servicing and Loss Mitigation Changes have been made throughout this section. 614-894; Section IV – Claims and Disposition; Appendix 4.0 – FHA-Home Affordable Modification Program (FHA-HAMP) Calculations; and Appendix 5.0 – HUD Schedule of Standard Possessory Action and Deed-In-Lieu of Foreclosure Attorney Fees (Applies to Servicing Only). This change item has been deemed to be medium risk because of the moderate number of impacted accounts, the complexity of the change in which more than 5 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation is updating procedures, letters, and BITB, as well as sending a vendor blast. Mortgage Insurance is updating procedures and letters. Foreclosure and Property Preservation are updating procedures. Foreclosure to send attorney blast. Borrower Communications and Compliance are updating the fee matrix. Default Reporting, Claims, Credit Bureau Reporting, and Default Compliance are providing procedures to confirm compliance.
• Q10183 FHA ML 2022-06 (Effective 3/31/2022): The purpose of this Mortgagee Letter (ML) is to update the policy for Property Preservation and Protection (P&P) costs by establishing that HUD will only reimburse Mortgagees for reasonable payments for P&P costs incurred in connection with Single Family claims for FHA-insured Single Family Mortgages. This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2-4 business units are impacted, and the potential regulatory scrutiny. Property Preservation and Claims are updating procedures and Property Preservation distributed a vendor blast that is pending confirmation of compliance.
• Q9722 OCC Bulletin 2021-55 (Effective 5/01/2022): The OCC, Federal Reserve, and FDIC have issued a final rule requiring a bank to notify its primary federal regulator of any computer-security incident, which rises to the level of a notification incident, as soon as possible and no later than 36 hours after the bank determines that a notification incident has occurred. The final rule also requires a third party service provider to notify each of its affected bank customers as soon as possible when the provider determines that it has experienced a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four (4) or more hours. This change item has been deemed to be high risk because of the number of potentially impacted accounts, the complexity of the change in which one business unit is impacted, and the potential penalties associated with non-compliance. IT Operations has processes in place and are finalizing procedures.
• Q9664 FHA INFO 21-97 (Effective 5/09/2022): FHA is releasing an updating to the Handbook 4000.1 to develop the Title I Property Improvement and Manufactured Home Loans Programs sections. These sections are being added to facilitate the financing for manufactured homes that are titled as personal property. These new sections replace the existing guidance for Title I Manufactured Home Loans within Sections III (Servicing and Loss Mitigation) and IV (Claims and Disposition). This change item has been deemed to be low risk because of the low number of impacted accounts, the complexity of the change in which 2-4 business units are impacted, and the potential regulatory scrutiny. Loss Mitigation has processes in place and are finalizing procedures.