Seller/Servicer Memorandum 21-02
Date: June 14, 2021
From: Jan Miyagishima
Director, Mortgage Operations
Servicing Guide revisions: Contact Servicing
Insurance Requirements and Insurance Loss Settlements
(Revised Section 12000.02 – 12000.03)
Section 12000.02 has been revised by the following:
REO property insurance cancellation reference has been clarified to reference the corresponding Section 15000.02A of the Servicing Guide for specific insurance requirements.
The deductible has been increased to $1,000 or 2% of the coverage amount, whichever is greater.
Addition of Servicer force-placed insurance if unable to validate borrower’s property insurance coverage.
Acceptance of alternative private flood insurance that meets the terms and conditions of the National Flood Insurance Programs, provided the insurer meets AHFC requirements.
Section 12000.03.B. Reportable Loss procedures have been expanded and reorganized to clearly state the requirements for reporting, monitoring, and closing reportable insurance losses. The form used for this function, Report of Hazard Insurance Loss (Form SER-76), has been reformatted to match the flow of this reorganized Guide section and is now fillable.
(Revised Section 12000.11)
Multi-Family loans are no longer excluded from principal curtailment modifications.
Assistance Provider Interest Rate Reduction (APIRR)
(Revised Section 12004)
This section has been updated to provide clarification on the annual loan requirements. The form used for this function, Certification of Status (Form SER-95), has been reformatted and is now fillable.
(Revised Section 13000.11 D)
Outdated reference to “HUD-1” replaced with “Closing Disclosure.”
(Revised Section 13000.12)
Reference of ‘Borrower files for Bankruptcy’ has been replaced with ‘Voluntary Petition for Bankruptcy’.
Foreclosures and Repossessions
(Revised Section 13001)
Has been retitled from “Procedural Documentation” to “Community Notification”
Provides direction to notify a community of an upcoming foreclosure sale, when the foreclosure sale of a property will take place in another location.
Section 13001.10 – The limit for attorney's fee outlined in Reimbursable Fees and Costs (Form SER-86) has been increased from $1,200.00 to $1,600.00 for a routine Non-Judicial Foreclosure of a 1-4 Family Unit.
Section 13001.12 – Requirement added that AHFC is to be notified within 2 business days if Servicer is considering rescinding a trustee’s sale.
(Revised Section 15000.03)
Requirement added that Servicers notify AHFC of an eviction proceeding within 5 business days of referral to attorney, and provide AHFC an update at least every 30 days until eviction is completed.
Mortgage Insurance Settlement Procedures
(Revised Section 16001.02)
Requirement added that Servicers notify AHFC of potential MI acquisition.
Multi-Family Insurance Loss Settlements
(Revised Section 21000.02)
This section has been replaced with the following statement: Refer to Section 12000.03 for hazard insurance loss requirements.
Escrow for Completions and Equity Extractions
(Revised Section 21000.04.D.)
Notification requirement added to include a status update to AHFC 30 days before the expiration date of the corresponding agreement.
(Revised Section 21000.06)
Section now includes a reference to 12000.11 for a curtailment modification after prepayment.
Form SER-76 Report of Hazard Insurance Loss
Form SER-86 Reimbursable Fees and Costs
Form SER-95 Certification of Status
Form SER-101 Recommendation for Disbursement of Rent-Up or Operating Reserves