MF Asset Management

Let’s Play Ball!
Batting Order
1. Headquarters Batter Up!
Office of Asset Management and Portfolio Oversight
(OAMPO) Organizational Chart
2. Outfield
Asset Management Servicing Contract
Digitizing Our Records
Liaison Model Overview
8. Pitch Out
Increasing Lender Responsibilities
9. Three Strikes
Limited Denial of Participation (LDP)
LQMD → Enhanced Counterparty Analysis
Civil Money Penalties (CMP)
10. Spring Training
Chief Underwriter Delegation Approval Pilot
Financials in the hands of the lenders
11. Inside Baseball
4. Umpire
3. Rookies
7. Team work makes the dream work!
Active Partners Performance System (APPS)
Handbook 4350.1 Rewrite
Questions and Answers
5. Infield
Rating Lenders
Lender to Lender Transfers
6. Strike Zone
Multifamily Delinquency and Default Reporting System
Headquarters: Batter Up!
Office of Asset
Management and
Portfolio Oversight
Deputy Director
Multifamily Asset
and Counterparty
Oversight Division
Assisted Housing
Oversight Division
and Support
Field Asset
Management and
Asset Management Servicing Contractor
Transformation Wave Support:
• We are working with Alpine to ease the logistical challenges
of offices going through the Transformation and moving to
the new Account Executive model.
• The distribution of assets to the Contractor will be handled
by Headquarters.
• The Contractor is already servicing several hundred assets.
Digitizing Our Records
Standard Work:
Combined effort to update our retention & disposition schedules for the 1st time in 30+
Program Centers & Hubs will organize files based on defined lists and priorities.
The scanning contractor is wrapping up in Fort Worth. About 45% of the files in Fort
Worth/Kansas City have been scanned and we will expand to other locations as quickly as
The timing is not directly linked to Transformation Waves  We are sliding into home on
this initiative!
This effort will ease the transition of project information from one location to another.
Lender Quality and Monitoring Division (LQMD):
– LQMD was officially brought over to the Office of Asset
Management in January.
– Weekly LQMD staff meetings are held with a Manager
– LQMD is an active participant in the Multifamily and Health
Care Credit Risk Committee Meeting.
• Activities:
– Revising Project/Loan Review Template
– Revising Lender Review Template
• Initiatives:
– Delegated Underwriter Approval
Civil Money Penalties (CMP) Pilot for Owners/Properties with
Failing REAC Scores:
 Owners of FHA Multifamily Properties will have CMPs
assessed if they are found to provide substandard living
conditions to their tenants. This is a joint collaboration
between Multifamily Asset Management, DEC, and REAC.
 Owners who receive either under 30 REAC physical
inspection scores or under 45 REAC physical inspection
scores with other problems and are identified by the DEC
are eligible candidates (threshold subject to change when
Pilot becomes Program).
Chief Underwriter Delegation Approval Pilot:
• Multifamily Counterparty Oversight currently
approves all new MAP underwriter requests as well
as continuation of underwriter approval in the
event an underwriter moves to a new lender.
• The concept is to delegate underwriter approval to
chief underwriters that meet certain criteria,
holding the lender and chief underwriter
accountable and responsible for ensuring their
underwriters meet requirements.
• Oversight will be provided through the annual
review of the lender, the quality control plan and
the certification by the lender and chief
underwriter regarding compliance.
Financials in the hands of the lenders:
• Post 2011 Regulatory Agreements require owners to
provide lenders audited financial statements
• Pre-2011 there is no requirement in the loan
documents for owners to provide information
• To date HUD has taken the approach that sharing
financial information is subject to privacy rules
• OGC is again reviewing the privacy issue
• On a parallel track, we are asking REAC the feasibility
of sharing financial information via HUD systems.
Rating Lenders:
 Compiled the ratings criteria and methodologies utilized by the three major rating
agencies (Fitch, Moody’s and Standard and Poor’s) for banks and mortgage
Compiled the ratings definitions and elements used by the FDIC for the CAMELS
Developing the template for the Lender Review process that will incorporate the
following elements:
o Organizational assessment
 Business model
 Key management personnel
o Financial condition and performance of the lender
o Portfolio performance
 Individual asset rating
 Delinquency and default
o Servicing performance
Lender to Lender Transfers:
• When servicing of a troubled asset is
transferred from one servicer to another,
HUD would like the opportunity to consent
to these transfers given the troubled nature
of the asset.
This will work concurrently with HUD’s
efforts to compare watch lists and troubled
assets with servicers and ensure the
portfolio is managed to mitigate risk.
Strike Zone
Multifamily Delinquency and Default
Reporting System (MDDR)
Servicers have had the ability to enter their watchlist loans
into MDDR since February 28, 2014.
So far no issues have been experienced in entering data. In
fact few questions have been received on the process.
Training sessions have been offered, but the system is very
Lenders have been concerned about how HUD will use this
Team Work Makes The Dream Work!
Liaison Model Overview
• Lengthy processing times, inconsistency, and missing
information are often associated with Multifamily.
During this time of change and improvement, it is
vital that Multifamily address these concerns, to
ensure continued growth.
• Advocacy organizations and owners often reach out
to the DAS, Commissioner and Secretary to express
their feedback directly regarding what is working/not
working for them. With the
DAS’/Commissioner's/Secretary’s schedule stretched
tight, identifying alternate contacts for key
stakeholders will streamline the Department’s ability
to respond to concerns and resolve problems as they
Liaison Model Overview
• Shift to a customer based approach for all aspects of
Multifamily business (FHA Insurance, Assisted
properties, Policy partners, etc.).
• Stakeholders with liaisons will be as follows:
• The top five FHA MF lenders (holding 82 percent of
FHA MF’s Insured UPB).
• The top [thirteen] identified stakeholder groups
that will include umbrella organizations, trade
associations and advocacy groups.
• The top [three] [owners] in our assisted portfolio,
which have the most assisted 202 and 811
properties under their management.
• The program has launched and you may be hearing
from your liaison soon.
Pitch Out
Increasing Lender Responsibilities:
– Non-Critical Repair Escrows—Mortgagee Letter 2013-13
• Continue to receive applications.
– Reserve for Replacement Releases
• Mortgagee Letter and Housing Notice are in draft stages.
• Intend to have a similar structure to the Non-Critical Repair Escrows.
• OGC gave the green light to allow the lenders to voluntarily assume
responsibility for releases on retroactive and prospective deals.
– Considering other possible tasks the lenders might assume voluntarily:
• Partial Releases of Security
• Modified TPAs
Three Strikes!
Limited Denial of Participation (LDP)
Housing Notice 2014-5 was issued on March 25, providing guidance for extended
use of Limited Denial of Participation for borrowers who have caused a claim
against the FHA insurance fund
Issued “based on the best interests of the Federal Government” to reduce risk
LDP’s exclude individuals or entities from new business with the Department for a
period of 12 months
LDP’s can be issued by Hub or Program Center Directors as needed:
 Issue Show Cause letter outlining reasons for a possible LDP
 Recipient responds within 30 days
 HUB/PC Directors determine whether LDP should be issued
Spring Training
 Active Partners Performance System (APPS) 
OAMPO’s Team:
– We are training hard—learning from our competition
(Fannie and Freddie) and studying game tape (existing
regulations and the APPS system) to completely revamp
the APPS system and the 2530 Regulations.
– We have lofty gold medal goals including:
• Revise CFR Part 200 Subpart H to require 2530 to
mirror industry borrower vetting standards (looking at
the “decisionmakers” only).
• Revise APPS to mirror the new single family Lender
Electronic Assessment Portal (LEAP).
– We need to identify the right teammates and make
improvements all around to reach our goals and take home
the gold.
Spring Training
HB 4350.1 Rewrite – Status and Next Steps
– On February 1, 2013, the Office of Asset Management kicked
off the Re-write of Handbook 4350.1. Drafts of 40 of the 42
chapters have been submitted and are in various stages of
– Drafters of each chapter are meeting in Summits to review
comments received from reviewers and prepare the next draft
of their chapters. Several Summits have been held. Additional
summits will be held during February.
– Comments from industry partners will be considered and next
drafts prepared for the Departmental Clearance process.
Next Steps
– The Office is considering enlisting the service of a contractor to
perform basic copyediting services and to assure consistency
in voice, tone and readability throughout the chapters.
 Thank you for your time
 We are open to all questions. Please contact Mark B. Van Kirk, Director
Phone: ( 202 ) 708-3730 Ext. 2855
Email: [email protected]
 We take great pride in our work, but not to proud to make changes for the
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