Monthly Regulatory Compliance Change Management Summary
As part of our ongoing effort to keep you informed, each month we send to you a summary of the work we’re doing to ensure compliance with the ever-changing regulatory landscape.
Please note, our monthly conference call has been canceled for the remainder of the year due to the holiday season. As a reminder, questions related to the regulatory compliance change management program may be submitted at any time to compliancechgmngt@cenlar.com. Our compliance department will respond within two business days of receipt (excluding weekends and holidays).
For the month of October, we’re currently working to reestablish compliance with our regulatory change management program on the following item. We have outlined what we are doing to achieve this.
- Q14082.1 FHLMC Bulletin 2024-11: Servicing (08/14/24) (Effective 8/14/2024)
What it is: Freddie Mac has made several clarifications to their disaster policy by updating the Glossary definition of “Eligible Disaster” to remove the requirement that the impacted property or place of employment be in an Eligible Disaster Area. So long as the impacted property has an insured loss, the Borrower is eligible for disaster relief. Servicers are reminded that they must use Default Reason Code 034 to report all Mortgages that are 31 or more days delinquent and affected by a disaster. Additionally, they have updated Guide Section 9206.5(e) to clarify that the section requirements apply to Borrowers who were current or less than 60 days delinquent as of the date the Eligible Disaster occurred and removed the reference to Eligible Disaster Areas in this context. This Change Impact Assessment for this item is rated Medium due to the complexity of the changes and number of business units involved. As of today, there are 17 action items, of which eight action items are complete. Default Call Center to update smart button, distribute floor communication, update procedures, and guided flow. Loss Mitigation to update letters. Risk Mitigation: Business units will identify potentially impacted loans to determine if additional loss mitigation assistance is necessary.
What we’re doing: All borrowers expressing financial hardship regardless of an insured loss being the primary driver affecting the ability to repay are evaluated and offered all available loss mitigation options. In the absence of the disaster forbearance option currently unavailable due to systemic programming, borrowers are still able to be considered for the non-disaster forbearance or non-disaster workouts. Borrowers will continue to be evaluated, and assistance will be provided following our standard processing for any available loss mitigation option. As borrowers are still being offered and evaluated for all available loss mitigation options, there is a very low risk of borrower harm. The risk of non-compliance is also low as borrowers may be eligible for a more favorable and beneficial non-disaster loss mitigation option depending on their specific needs and circumstances. We are currently forecasting a system update completion date of Dec. 1, 2024, and the remaining outstanding action items dependent upon the completion of this system update will follow quickly thereafter.
A Look Ahead:
- November Outlook: There are 32 items due in November. Of those, 16 were completed as of the end of October and eight remain to be completed.
Coming Soon:
- Our monthly Client Compliance Change Management Report is changing. We are planning to launch new reports at the beginning of 2025. Stay tuned for more information!