RMIC s Delinquency and Claims Guide

Transcription

1 RMIC s Delinquency and Claims Guide RMIC protects its insured lenders against losses due to borrower default on mortgage loans. This guide describes the basic servicing on delinquent loans required by RMIC s Master Policy. Mitigating Losses RMIC would like to help resolve delinquencies without foreclosing. Our experienced personnel are ready to assist you with any alternatives to foreclosure or to reduce losses associated with foreclosure. In accordance with RMIC s Master Policy, the insured must cooperate actively in efforts to prevent or mitigate losses. There are many techniques RMIC has successfully used to mitigate losses. With RMIC s assistance and approval (when necessary) the following options are available: Loan Modifications Forbearance Plans Repayment Plans Advance Claim Payments Loan Assumptions Short Payoffs (when the property will not sell for enough to retire the debt) Deeds-in-Lieu of Foreclosure Pre-Sold Claims (when the lender actively markets the real estate owned [REO] property after obtaining title) Definition of Delinquency and Default Default (or delinquency) is the failure of a borrower to pay when due an amount equal to or greater than one monthly regular periodic loan payment. A loan is delinquent as of the close of business on the installment due date for which a scheduled payment has not been made. For example, a loan is four months delinquent if all of the consecutive monthly payments due from January 1 through April 1 remain unpaid as of the close of business on April 1. Notifying RMIC The timely submission of delinquency and claims forms is required by the Master Policy. The following forms are among those described in detail in the following sections: Notice of Delinquency (Exhibit 1) Monthly Delinquency Status Update (Exhibit 2) Notice of Foreclosure Sale (Exhibit 4) Claim for Loss (Exhibit 5)

2 Loss Mitigation Training Experienced RMIC professionals are available for training on many areas of loss mitigation and claims. The Foreclosure Alternatives session can be tailored to meet your needs. In addition to traditional workout plans, other creative strategies are discussed, such as: Advance claim payments Temporary indulgence Special or extended forbearance Loan modifications Short sales Deeds in lieu Our Introduction to Claims seminar focuses on the fundamentals of claims processing including: Claim filing Mitigation possibilities RMIC Claims Department organization Completion of an RMIC Claim for Loss form (or any other delinquency form) Delinquent Loans Notice of Delinquency (NOD) & Monthly Delinquency Status Update RMIC must be notified of all new delinquent loans. Notify RMIC: Within 45 days of the first missed payment on first payment defaults. No later than 10 days from the date the borrower s payment becomes four months overdue. When any proceeding occurs that affects the borrower s, insured s or RMIC s interest in the loan or property. Such proceedings include bankruptcies, lawsuits involving the loan or property, any repudiation of liability or threat of lawsuit, and condemnation proceedings. Timely submission of the NOD is essential to protect your right to file a claim. Delayed submission of the NOD may preclude RMIC from taking certain steps that may result in the cure of the delinquency or mitigate the loss. RMIC must receive the monthly Delinquency Status Update no later than the twentieth day of the month. Monthly reporting is required on delinquent loans until the default is cured or the Claim for Loss has been submitted. RMIC accepts the NOD and monthly Delinquency Status Update via electronic transmission. Alternatively, the fully completed forms may be faxed, mailed, or ed to RMIC. When RMIC receives the initial NOD form via fax, mail, or , RMIC provides a monthly Delinquency Status Update form on each delinquent loan. Exhibits 1 and 2 provide examples of the NOD and monthly Delinquency Status Update forms. Multiple Defaults RMIC must be notified with a new NOD for each new default by the borrower, even if the previous default was only recently cured.

3 Notice of Foreclosure Sale (NFS) Form The NFS form gives RMIC notice of an approaching foreclosure sale, provides RMIC with important data and allows us the opportunity to confirm the insured s bid at the sale. Standard bidding guidelines that cover most foreclosures are included as Exhibit 3; however, if RMIC instructs a bid, your cooperation in bidding as instructed will ensure that applicable deficiency rights have been preserved and that you have complied with the provisions of RMIC s Master Policy. RMIC associates are always available to assist with the bid. If you do not hear from RMIC, use the anticipated foreclosure bid that you indicated on the form. Submit the NFS form (Exhibit 4) via fax, mail, or as soon as the foreclosure sale date is known, and no later than 15 days before the foreclosure sale. As stated in the RMIC Master Policy, it is your responsibility to preserve RMIC s right to a deficiency (if allowed by state law), unless RMIC waives that right in writing. Borrowers in Bankruptcy Your attorney must take every necessary action to have the property released from bankruptcy so that foreclosure proceedings can begin or continue. Mortgage Insurance Claims Submitting the Claim After acquiring title to the property, submit a claim by one of the following methods: Via the Internet at rmicdirect.rmic.com Via at ClaimsServicingTeam@rmic.com By fax or mail using any other computer-generated form that complies with RMIC s guidelines (Exhibit 5) On-line Claim Submission RMIC offers on-line claim submission via RMICDIRECT at Enter your Username and Password and select Submit to login. If you do not have a Username and Password, select New User Sign Up. If you need additional assistance logging into RMICDIRECT, please contact IS Support at ISSupport@rmic.com. Acquiring Title You may acquire title by either: Foreclosing under the laws of the state where the property is located; or Accepting a voluntary conveyance of title from the borrower in lieu of foreclosure or other proceedings, with RMIC s prior approval. For a claim to be valid, the CFL form must be submitted within 60 days of the date title is acquired through a voluntary conveyance (deed-in-lieu), through closing of an approved short-sale, or through foreclosure proceedings. A perfected claim means a claim received by RMIC which contains all information or proof required by RMIC and for which all requirements of RMIC s Master Policy applicable to payment of a claim are satisfied. Failure to supply all information necessary and reasonably requested by RMIC within 180 days of filing the CFL form eliminates RMIC s obligation to make any payment under the Master Policy. Incomplete Construction The property must be completed in accordance with the construction plans and specifications in order to be considered for a claim payment.

4 Physical Damage Pursuant to sections 4.6 and 4.7 of the Master Policy, restoration costs for physical damage to a property in excess of reasonable wear and tear are excluded from coverage. Completing RMIC s Claim for Loss Form The CFL form (Exhibit 5) must be completed in its entirety. Complete all items on the CFL form, unless an item is in no way applicable to the loan, in which case that item should be marked Not Applicable. Additional assistance is available from RMIC Claims associates. Highlights: Items that may be included in a claim submission Unpaid Principal Balance and Forbearance Amounts List the non-capitalized principal balance at the Default Date, excluding any interest, late charges, penalties, or escrow due. Unearned loan discount points will be deducted from the principal balance. Negative amortization is allowed when provided for by the premium plan selected. Accumulated Interest Accumulated interest is calculated as simple interest on the principal balance at the contractual rate (percentage rate on the Note) from the Interest Paid-To-Date to the Claim Date. Late charges and penalty interest are not claimable expenses. 28. Attorney s Fees List the amount charged by the attorney, not to exceed 3% of the total principal balance plus accumulated interest (line 27). 29. Property Taxes This space is for taxes paid by the servicer on the loan after the Default Date. Only those taxes which are due and paid after the default date are claimable. 30. Hazard Insurance Premiums List the net hazard and flood insurance premiums paid on the loan by the insured after the Default Date. The claimable portion (net of the anticipated refund) must be calculated in Section 54: Hazard Insurance Premium, on page 2 of the CFL form. 31. Condominium Fees Paid for Months After Default Date Show the monthly amount of condominium fees and the last month paid by the borrower. Condominium fees are only claimable for the months after the Default Date. 32. Property Preservation Costs This section includes the reasonable cost to the insured for securing and preserving property, i.e., winterizing and changing locks to secure the property. Costs to renovate the property are not claimable unless first approved by RMIC. The maximum amount to be paid for normal maintenance without written approval from RMIC is Statutory Disbursements List charges incurred by either the insured or the insured s attorney for obtaining title to the property, such as filing fees and publication charges. Attorney s fees are not to be included in this figure, but should be shown on Line Escrow Account Balance Any funds left in the escrow account at the Default Date are deducted from the claim. Items paid by the insured after the Default Date should be shown in the appropriate sections listed above.

5 38. Pledged Savings, Buydowns, or Other Funds Held for Insured Other accounts or funds on the loan s behalf (including, but not limited to, the remaining portions of buydowns or pledged accounts, insurance refunds, and any rent received by the insured). 40. Other Deductions If the property has been sold, deduct the net proceeds of the sale from the claim amount. RMIC s approval of the sale is required. Pre-Sold Claims Marketing the REO Property In accordance with RMIC s Master Policy, RMIC requires you to market the subject property to mitigate the loss. Claim Settlement Upon acceptance of a complete and perfected claim, RMIC will, at its option, either: Purchase the property Relinquish all rights to the property and pay the optional guaranty Pay the lesser of the optional guaranty or the lender s shortage if the lender sells the property with RMIC s approval Customer Service Please contact the RMIC Claims Group with any questions. RMIC Claims Department 101 North Cherry Street Winston-Salem, NC P.O. Box 2514 (27102) Phone: (800) 884-RMIC (7642); Select 1 for Claims & Loss Mitigations FAX: (336) (Loss Mitigation) FAX: (866) (Delinquencies & Claims) for Claims Submissions: ClaimsServicingTeam@rmic.com Republic Mortgage Insurance Company Republic Mortgage Insurance Company of Florida Republic Mortgage Insurance Company of North Carolina 101 North Cherry Street Winston-Salem, NC RMIC (7642)

6 Exhibit 1 NOTICE OF DELINQUENCY First Lien MORTGAGE INSURANCE CO. MI CERTIFICATE NUMBER: SERVICER LOAN NUMBER: SERVICER NAME: SERVICER ADDRESS: STREET CITY STATE ZIP INVESTOR (Check One): FHLMC FNMA OTHER MORTGAGOR NAME: FIRST MIDDLE LAST MORTGAGOR SOCIAL SECURITY NUMBER CO-MORTGAGOR NAME: FIRST MIDDLE LAST CO-MORTGAGOR SOCIAL SECURITY NUMBER PROPERTY ADDRESS: STREET CITY STATE ZIP MAILING ADDRESS IF DIFFERENT: STREET CITY STATE ZIP TELEPHONE NUMBERS: Home ( ) Work ( ) Ext. CURRENT PRINCIPAL BALANCE (exclude all delinquent interest, etc.) BANKRUPTCY TOTAL DELINQUENT AMOUNT: File Date: / / LOAN DUE FOR DATE: MONTH DAY YEAR Chapter: REASON FOR NON-PAYMENT (Check One) Unemployment Temporary Loss of Income Dissatisfaction with Property Is this a First Payment Default? Marital Problems Bankruptcy Energy/Environment Cost Yes No Illness Excessive Use of Credit Servicer Problem (Explain below) Death Casualty Loss OCCUPANCY STATUS (Check One) Business Failure Moved/Vacant MORTGAGOR DATE OF LAST MORTGAGOR CONVERSATION MONTH DAY YEAR TENANT VACANT SERVICER S NEXT ACTION WILL BE (Check One): Loan Modification/Workout Foreclosure Pending Refinance Recommend Mortgagor List for Sale Negotiate Payment Plan Offer to Take Voluntary Conveyance (DIL) Promise to Pay Date: If available / / DESCRIBE SERVICER S COLLECTION EFFORTS: SERVICER CONTACT: SERVICER TELEPHONE NUMBER: ( ) Ext. Date: / / RMIC FORM CF-0008 (10/99)

7 Exhibit 2 Republic Mortgage Insurance Company Republic Mortgage Insurance Company of Florida Republic Mortgage Insurance Company of North Carolina P.O. Box 2514 Winston-Salem, NC North Cherry Street Winston-Salem, NC Toll-Free (800) DELINQUENCY STATUS UPDATE Servicer ID Certificate INSURED S NAME AND ADDRESS BORROWER S NAME AND PROPERTY ADDRESS INSURED S LOAN NUMBER: BORROWER S SOCIAL SECURITY NUMBER INVESTOR: Freddie Mac Fannie Mae Other INVESTOR S LOAN NUMBER: UNPAID PRINCIPAL BALANCE: LOAN DUE FOR DATE: BANKRUPTCY FILE DATE: CHAPTER NUMBER: OCCUPANCY STATUS: Mortgagor Unknown BANKRUPTCY RELEASE DATE: Tenant Vacant Cured Indicate Reason Current Paid Off Transferred Transferred To Remains Delinquent REASONS FOR DELINQUENCY: Servicer Problem Illness Bankruptcy Business Failure Casualty Loss Moved/Vacant Death Loss of Income Unemployment Environmental Dissatisfaction with Property Unknown Excessive Use of Credit Marital Problems FORECLOSURE SALE DATE: DATE TITLE ACQUIRED: CLAIM FILED DATE: COMMENTS: SERVICER CONTACT NAME: PHONE NO.: DATE: / / FAX NO.: Please return this form with any updated information to RMIC by the 20th day of the current month. DP-0039 (Rev. 10/00)

8 Foreclosure Bidding Guidelines General: The current market value and the total indebtedness are needed to establish a foreclosure bid. The current market value can be established by a Broker s Price Opinion (BPO) or a comparable market analysis or appraisal. Use the as is value for establishing the bid, unless the property has suffered damage (fire, vandalism, natural causes). In that case, use the repaired value. RMIC s claim payment will not exceed the optional guaranty percentage of allowable claim for loss. RMIC s Instructions: If the property s value is higher than the total indebtedness, begin bid at total indebtedness. If a third party enters the bidding process, then bid competitively. If the property value is less than the total indebtedness, the minimum bid will be the percentage of value shown below. Consult the investor for the maximum bid requirements. For loans insured by Fannie Mae or Freddie Mac, the Servicer is instructed to bid in accordance with the bidding guidelines as described in the Fannie Mae or Freddie Mac Servicing Guide. If questions arise, please contact RMIC at Property State RMIC Pursues % of Current RMIC Pursues % of Current Property State Deficiencies? Value to Bid Deficiencies? Value to Bid Alabama No A Montana No A Alaska No A Nebraska Yes 90% Arizona No A Nevada Yes 1 90% Arkansas Yes B New Hampshire Yes 1 90% California No A New Jersey No Colorado Yes 90% New Mexico Yes 90% Connecticut Yes 1 90% New York No A Delaware Yes 90% North Carolina Yes 90% D.C. Yes 90% North Dakota Yes 90% Florida Yes Ohio No A Georgia C 100% Oklahoma Yes 90% Hawaii Yes 90% Oregon No A Idaho Yes 90% Pennsylvania No A Illinois No A Rhode Island Yes 90% Indiana Yes 90% South Carolina Yes 1 90% Iowa No A South Dakota Yes 100% Kansas No A Tennessee Yes 90% Kentucky Yes 1 90% Texas No A Louisiana C 90% Utah Yes 90% Maine Yes 1 90% Vermont Yes 1 90% Maryland Yes 90% Virginia No A Massachusetts Yes 90% Washington No A Michigan Yes 1 90% West Virginia Yes 90% Minnesota No A Wisconsin No A Mississippi Yes 1 90% Wyoming No A Missouri Yes 90% A Consult the investor for their bid requirements or bid 100% of value or total debt, whichever is less. B Bid should be 90% of value but not less than 2/3 of indebtedness due at time of sale. C Contact RMIC to discuss preservation of delinquency rights. In Louisiana, foreclosure must be with benefit of appraisement. 1 Need property appraisal. 2 Unless there is competitive bidding, in which case bid 100% of value or total debt, whichever is less. Republic Mortgage Insurance Company Republic Mortgage Insurance Company of Florida Republic Mortgage Insurance Company of North Carolina 101 North Cherry Street Winston Salem, NC RMIC (7642)

9 Exhibit 4 Notice of Foreclosure Sale This form must be received by RMIC no fewer than 15 days before the Foreclosure Sale Date. Insured/Servicer Information Loan Information Insured/Servicer Name: RMIC Cert # (10 digits): Address: Insured/Servicer Loan #: City: State: Zip: Borrower Name(s): Contact Person: Property Address: Phone Number: City: State: Zip: Borrower s Indebtedness at Foreclosure Sale Property Value: Date as of: Principal: Please provide RMIC with a copy of your most recent Interest: appraisal or your Realtor s Market Analysis. Legal Fees (estimate, if necessary): Foreclosure Sale Date: Special Assessments: Anticipated Foreclosure Bid Amount: Delinquent Taxes: This bid includes deficiency rights. Past Due Homeowners Association Fees: No deficiency bid required by RMIC. Other (please explain): If RMIC has instructed you to bid a deficiency, be certain you have taken the necessary steps to preserve RMIC s rights to Total Indebtedness: recovery. Investor: FHLMC FNMA Other: Name/Title of Authorized Representative: Signature of Authorized Representative: Address: Date: Republic Mortgage Insurance Company Republic Mortgage Insurance Company of Florida Republic Mortgage Insurance Company of North Carolina 101 North Cherry Street Winston Salem, NC RMIC (7642) CF 0056 (10.99)

10 Republic Mortgage Insurance Company Republic Mortgage Insurance Company of Florida Republic Mortgage Insurance Company of North Carolina 101 North Cherry Street Winston Salem, NC Claim for Loss 1. Insurance Type: Primary Pool 2. Claim Type: Initial Supplemental Other: 3. Mortgage Insurance Company Name 4. Date This Claim Submitted Republic Mortgage Insurance Company 5. Mortgage Insurance Company Address 6. Mortgage Insurer Telephone Number 101 North Cherry Street, Ste 101, Winston Salem, NC Insured s Name 8. Insured s Loan Number 9. Address 10. Certificate Number 11. City State Zip Code 12. Master Policy Number 13. Borrower Name(s) 14. % Coverage 15. Type Coverage 16. Property Address (Including City, State and Zip Code) 17. Servicer Name (If Different than Insured s Name) 18. Servicer Loan Number 19. Servicer Address (Including City, State and Zip Code) (If Different than Insured) 20. Payee Name (If Different than Insured s Name) 21. Payee Loan Number 22. Payee Address (Including City, State and Zip Code) (If Different than Insured) 23. Investor Name (If Different than Payee s Name) 24. Investor Loan Number Claimable Items 25. Unpaid Principal Balance (Amortizing UPB) Accumulated Interest: (From / / to / / = %) (From / / to / / = %) (From / / to / / = %) 26. Partial Forbearance Unpaid Principal Balance Accumulated Interest: (From / / to / / = %) 27. Sub Total Principal and Interest (Line 25 Plus Line 26) Expense Information 28. Attorney s Fees 29. Property Taxes (Paid through / / ) 30. Hazard Insurance Premiums (Paid through / / ) 31. Condominium Fees Paid for Mos. after Default Date (Monthly fees ; Paid through / / ) 32. Property Preservation Costs 33. Statutory Disbursements 34. Other Disbursements 35. Sub Total Claimable Items (Total Lines 27 Through 34) Deductible Items 36. Escrow Account Balance 37. Net Rental Proceeds 38. Pledged Savings, Buydowns, or Other Funds Held for Insured 39. Insurance Proceeds 40. Other Deductions (Attach Explanation) 41. Sub Total Deductible Items (Total Lines 36 Through 40) 42. Total Claim Amount (Line 35 Minus Line 41) 43. Less Adjustments, if any (Attach Explanation) 44. Adjusted Claim Amount (Line 42 Minus Line 43) 45. Comments Claim Authorization I hereby certify that the statements contained herein are true and correct. All items which will be claimed under this stated insured loan number have been included, unless itemized in writing on a separate attachment to this Claim for Loss form. I further certify that the above named lender/servicer has acquired and retains merchantable title to the property. The security and evidence of merchantable title, if not enclosed herewith, will be transmitted to RMIC immediately upon request. I further understand that a claim will not be complete until all required documents have been received by RMIC. Any person who knowingly and with the intent to defraud any insurance company or other person files an application for insurance or a statement of claim containing any materially false information, or conceals, for the purpose of misleading, information concerning any fact material thereto, is subject to criminal and civil liability under state and/or federal law. (Not applicable in OR and VT.) Important disclosures, page Authorized Signature: 47. Contact Name (Print): 48. Title/Department: 49. Phone: CF 0005 (1.10) Exhibit 5

11 51. ARM Interest Rate Information Unpaid Principal Balance (from line 25) Rate From To Number of Days Amount 1. % / / / / 2. % / / / / 3. % / / / / 4. % / / / / Total (enter on Line 26) Expense Information Type Date Paid Description Amount 52. Attorney s Fee Total (enter on Line 28) 53. Property Taxes Total (enter on line 29) 54. Hazard Insurance Premium Total (enter on Line 30) 55. Property Preservation Costs Total (enter on Line 32) 56. Statutory Disbursements Total (enter on Line 33) 57. Other Disbursements Total (enter on Line 34) 58. Required Enclosures: Evidence of Good and Merchantable (or Marketable) Title Loan Payment History Expense Documentation Copy of Original Note Copy of Original HUD 1 Statement Copy of Documents Commencing Foreclosure Additional Enclosures (if applicable): Rent or Receiver Account History Bankruptcy Documents Buydown Agreement Assumption Agreement Closing Statement From Most Recent Sale Documents Pertaining to Preservation and/or Establishment of Deficiency Judgment Copy or Primary MI Claim for Loss and Settlement Check 59. Property: Vacant Occupied If occupied, please state name of occupant: Is the property listed for sale? Yes No Current List Price: Current Value: Date / / Key to property may be obtained from: Phone: 60. Title Acquired By: Deed in Lieu Foreclosure 3 rd Party Sale Signed / / Sale Date / / 61. Bankruptcy: File Date / / Discharge Date / / NY: WARNING: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information, or conceals, for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime and shall also be subject to a civil penalty not to exceed five thousand dollars and the stated value of the claim for each such violation. AZ: For your protection Arizona law requires the following statement to appear on this form. Any person who knowingly presents a false or fraudulent claim for payment of a loss is subject to criminal and civil penalties. CA: 556. Fraudulent claims; penalties (a) It is unlawful to: (1) Knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss under a contract of insurance. (2) Knowingly file multiple claims for the same loss or injury with more than one insurer with intent to defraud the insurer. (3) Knowingly prepare, make or subscribe any writing, with an intent to present or use the same, or to allow it to be presented or used in support of any such claim. (b) Every person who violates any provision of this section is punishable by imprisonment in the state prison for two, three, or four years, or by fine not exceeding ten thousand dollars (10,000), or by both. ME, TN, VA, WA: It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties include imprisonment, fines and denial of insurance benefits. LA, NV: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison. OH: Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud. FL, NH: Any person who knowingly and with intent to injure, defraud, or deceive any insurance company files a statement of claim containing any false, incomplete, or misleading information is guilty of a felony of the third degree. D.C.: WARNING: It is a crime to provide false or misleading information to an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits if false information materially related to a claim was provided by the applicant.