Version 4.2 As of May 1, 2013 MHA Handbook v4.2 2 FOREWORD...................................................................................................................14 OVERVIEW.....................................................................................................................15 1 SERVICER PARTICIPATION IN MHA ........................................................................22 1.1 Servicer Participation Agreement ........................................................................................ 22 1.2 Servicer Safe Harbor ........................................................................................................... 22 1.3 Investor Solicitation.............................................................................................................. 23 1.4 Transfers of Servicing.......................................................................................................... 23 1.4.1 Transfer of Eligible Loans ............................................................................................. 23 1.4.1.1 HAMP Eligible Loans.............................................................................................. 24 1.4.1.2 2MP Eligible Loans................................................................................................. 24 1.4.1.3 Treasury FHA-HAMP and RD-HAMP Eligible Loans ............................................. 24 1.4.1.4 HAFA Eligible Loans............................................................................................... 24 1.4.2 Relationship Manager ................................................................................................... 25 1.4.3 Obligations of Transferor Servicers............................................................................... 25 1.4.4 Obligations of Transferee Servicers.............................................................................. 25 1.4.5 Involuntary Transfers of Servicing................................................................................. 26 1.4.5.1 Borrower Notification .............................................................................................. 26 1.4.5.2 Impact on Incentives............................................................................................... 26 1.5 Program Participation Caps................................................................................................. 27 1.6 Compliance with Applicable Laws ....................................................................................... 31 1.7 Dodd-Frank Certification Requirement ................................................................................ 32 2 COMPLIANCE.............................................................................................................34 2.1 Compliance Assessments.................................................................................................... 34 2.2 Documentation..................................................................................................................... 35 2.2.1 Documentation Requirements for PRA......................................................................... 38 2.2.2 Documentation Requirements for UP ........................................................................... 38 2.2.3 Documentation Requirements for HAFA....................................................................... 39 2.2.4 Documentation Requirements for 2MP......................................................................... 40 2.2.5 Documentation Requirements for HHF......................................................................... 40 2.3 Communication of Findings and Results ............................................................................. 41 2.4 Treasury FHA-HAMP and RD-HAMP Compliance.............................................................. 41 2.5 FHA2LP Compliance ...........................................................................................................42 2.6 Annual Certification.............................................................................................................. 43 2.6.1 Initial Certification.......................................................................................................... 44 2.6.2 Subsequent Certifications ............................................................................................. 45 2.6.3 Subsequent Events ....................................................................................................... 46 2.6.4 Scope of the Certification .............................................................................................. 46 2.6.4.1 Scope of the Internal Controls Program ................................................................. 46 2.6.4.2 Internal Controls Documentation............................................................................ 46 2.6.4.3 Quarterly Reviews .................................................................................................. 46 2.6.5 Reporting Noncompliance............................................................................................. 47 2.6.6 Cover Letter to the Certification .................................................................................... 47 2.6.7 Termination of Obligation to Provide Certifications....................................................... 47 2.7 Internal Quality Assurance................................................................................................... 48 2.7.1 Establishment of a Quality Assurance Function ........................................................... 48 2.7.2 Scope of Quality Assurance Reviews ........................................................................... 48 2.7.3 Quality Assurance Review: Methodology, Timing and Reporting................................ 50 2.7.4 Relationship Manager Assessment............................................................................... 51 2.8 Dodd-Frank Certification, Borrower Identity and Owner Occupancy Compliance............... 51 2.8.1 Borrower Eligibility & Compliance Portal....................................................................... 52 2.8.2 Loan Selection............................................................................................................... 52 2.8.3 Servicer Documentation................................................................................................ 52 2.8.4 Hold on Program Participation for Trial Period Plans or Pending HAFA Transactions 53 MHA Handbook v4.2 3 2.8.5 Vendor Review and Alert Notification............................................................................ 53 2.8.6 Alert Clearance Process ............................................................................................... 53 2.8.6.1 Servicer Responsibility for Assessing Information ................................................. 54 2.8.7 Reporting Clearance Status .......................................................................................... 55 2.8.7.1 Identity/Occupancy Verification Alert Status .......................................................... 55 2.8.7.2 Dodd-Frank Certification Compliance Alert Status................................................. 55 2.8.8 Not Cleared Borrower Notices ...................................................................................... 56 2.8.9 Treasury System Reporting and Incentives .................................................................. 57 2.8.10 Interaction with Other EESA Programs....................................................................... 57 2.8.10.1 Borrowers In Multiple MHA Programs .................................................................. 57 2.8.10.2 Borrowers In MHA and HHF Programs ................................................................ 57 3 ESCALATION OF BORROWER INQUIRIES..............................................................58 3.1 Treasury’s Borrower Support Centers ................................................................................. 58 3.2 Servicer Escalated Case Management ............................................................................... 58 3.2.1 Staffing Requirements................................................................................................... 59 3.2.2 Accessibility................................................................................................................... 59 3.2.3 Single Point of Contact.................................................................................................. 59 3.3 Escalation Resolution Process ............................................................................................ 59 3.3.1 Timing............................................................................................................................ 59 3.3.2 Authorization ................................................................................................................. 60 3.3.3 Case Resolution............................................................................................................ 60 3.3.4 Substantially Similar Cases........................................................................................... 61 3.3.5 Ongoing Litigation ......................................................................................................... 61 3.4 Protections Against Unnecessary Foreclosure.................................................................... 61 3.4.1 Suspension