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- What’s at Stake: Servicers trying to meet Fannie Mae’s strict new deadline without overnight staff, plus handling a written attestation for the new VA partial claim.
- Expert Quote: “I think the communication side is where people will struggle.” — Brent Potter, LoanCareÂ
- Forward Look: What’s coming: Fannie Mae’s Dec. 1 deadline to take escrow reporting live and a mandatory implementation date of Nov. 28 for the VA’s new partial claim.
Overview bullets generated by AI with editorial review.Â
As more companies gear up for new servicing rules set for mandatory implementation soon, those ahead of the game are sharing tips for how to handle some particular aspects of the new procedures that can require more attention.
These include a deadline in the wee hours that’s part of Fannie Mae’s new escrow reporting rules, a fresh format that’s part of Freddie Mac’s expanded default paradigm and a written attestation in the Department of Veterans Affairs new
LoanCare, FICS and
Tips for handling the VA’s partial claim
While some aspects of the new VA partial claim
A written attestation is one of them.
That attestation has advantages over some alternative procedures that would have been more cumbersome, but still requires careful management, according to Brent Potter, chief operating officer at LoanCare, a subservicer handling the process for multiple clients.
“It’s going to take these customers probably somewhere around four months to work through this program: roughly 30 days to get from application to the point where they’re approved for trials. There are three months of trials. Then they have to sign an attestation,” he said.
The VA provides some specific requirements for attestation language, terms and timing in its guidelines; but certain aspects of the implementation are discretionary. Servicers must prepare their own agreements and decide how to communicate with borrowers about them.
“Understanding the customer’s true hardship and their ability to pay through conversation is critical since there is not a documented income assessment, so I think the communication side is where people will struggle,” Potter said.Â
A single team repeating a process typically helps uncover flaws faster than distributing it widely and also contains damage from mistakes. So that approach may help servicers determine what works best in handling the discretionary aspects of the attestation and communication around it.
“I highly recommend dedicated individuals speak to these customers. That way they can get a lot of reps early in the rollout of the process instead of spreading it across the teams,” Potter said.
He also recommends paying particular attention to alignment with the VA’s system.
“The other piece that is unique with the VA is how critical it is to work in their system to make sure that the coding of where the customer sits in the process aligns to what is in their system,” Potter said. “You should have proper oversight and controls for that,” Potter said.
The mandatory implementation date for the new VA partial claim is Nov. 28.
Managing escrow reporting after midnight and more
The new escrow reporting Fannie has added includes a predawn deadline that has drawn some concern from the industry. Some of the investor reporting that Freddie is adding also has a daily investor reporting requirement in the wee hours.
“A big concern has been the 3 a.m. cutoff,” said Audalia Henry, mortgage servicer product development manager at FICS, an industry software provider.
FICS used two application programming interfaces to handle the work.
“If they don’t have anybody working after 5 p.m. and people are still making payments after hours, then you can schedule your API to create a file with all the activity on the day’s date,” Henry said. “The second API can be scheduled to transmit that data.”
Servicers should have two required months of testing for escrow reporting under their belts by Nov. 13. Production should go live by Dec. 1, according to Fannie.
