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Course Materials for CMG MI's Loss Mitigation Webinar on 8/11/2010
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MSA Property 2010 - 1st Half PAS Claims
Albuquerque, NM 2
Anchorage, AK 8
Appleton, WI 3Atlanta-Sandy Springs-Marietta, GA 2
Bakersfield, CA 1
Baltimore-Towson, MD 2
Bellingham, WA 2
Bremerton-Silverdale, WA 1
Bridgeport-Stamford-Norwalk, CT 1
Brunswick, GA 1
Cedar Rapids, IA 1
Cheyenne, WY 1
Cincinnati-Middletown, OH-KY-IN 1
Colorado Springs, CO 1
Columbus, OH 2
Dallas-Plano-Irving, TX 4
Denver-Aurora, CO 1
Denver-Aurora-Broomfield, CO 5
Des Moines-West Des Moines, IA 1
Detroit-Livonia-Dearborn, MI 1
Dubuque, IA 3
Eau Claire, WI 1
Edison-New Brunswick, NJ 1
El Paso, TX 1
Eugene-Springfield, OR 1
Fairbanks, AK 2
Fort Wayne, IN 1
Fort Worth-Arlington, TX 1
Ogden-Clearfield, UT 3
Oklahoma City, OK 2
Olympia, WA 1
Oshkosh-Neenah, WI 3
Palm Bay-Melbourne-Titusville, FL 1Pensacola-Ferry Pass-Brent, FL 1
Phoenix-Mesa-Glendale, AZ 1
Pittsburgh, PA 1
Portland-Vancouver-Beaverton, OR-WA 1
Portland-Vancouver-Hillsboro, OR-WA 2
Poughkeepsie-Newburgh-Middletown, NY 2
Providence-New Bedford-Fall River, RI-MA 3
Raleigh-Cary, NC 1
Rapid City, SD 1
Reading, PA 1
Richmond, VA 1
Riverside-San Bernardino-Ontario, CA 1
Roanoke, VA 1
Rome, GA 1
Sacramento--Arden-Arcade--Roseville, CA 1Saginaw-Saginaw Township North, MI 2San Diego-Carlsbad-San Marcos, CA 1San Jose-Sunnyvale-Santa Clara, CA 1
Savannah, GA 1
Seattle-Bellevue-Everett, WA 1
Sheboygan, WI 1
Spokane, WA 1
Springfield, MA 2
Springfield, OH 1
St. Louis, MO-IL 6Tampa-St. Petersburg-Clearwater, FL 4
Tulsa, OK 1
Tuscaloosa, AL 3Virginia Beach-Norfolk-Newport News, VA-NC 2
Warner Robins, GA 1Warren-Troy-Farmington Hills, MI 1Washington-Arlington-Alexandria, DC-VA-MD-WV 1
Waterloo-Cedar Falls, IA 2
Wichita, KS 3
Wilmington, DE-MD-NJ 1
Worcester, MA 3
Yuma, AZ 1
Green Bay, WI 1Hartford-West Hartford-East Hartford, CT 2
Honolulu, HI 1
Houston-Sugar Land-Baytown, TX 1
Idaho Falls, ID 1
Indianapolis-Carmel, IN 2
Jacksonville, FL 2
Janesville, WI 1
Jefferson City, MO 1
Kingsport-Bristol-Bristol, TN-VA 5
Kingston, NY 1
Knoxville, TN 2
La Crosse, WI-MN 1
Lima, OH 1Little Rock-North Little Rock-Conway, AR 1Los Angeles-Long Beach-Glendale, CA 1
Macon, GA 1
Madison, WI 1
Manchester-Nashua, NH 2Milwaukee-Waukesha-West Allis, WI 2Minneapolis-St. Paul-Bloomington, MN-WI 3
Mount Vernon-Anacortes, WA 1
none 15
Oakland-Fremont-Hayward, CA 1
CMG MORTGAGE INSURANCE COMPANYAugust 11, 2010
Claim Settlement & Property SalesManaging Risk
Las Vegas-Paradise, NV 98
Minneapolis-St. Paul-Bloomington, MN-WI 39
Detroit-Livonia-Dearborn, MI 37
Jacksonville, FL 31
Warren-Troy-Farmington Hills, MI 27
Tampa-St. Petersburg-Clearwater, FL 26
Riverside-San Bernardino-Ontario, CA 25
Orlando-Kissimmee-Sanford, FL 24
CMG Mortgage Insurance Company
Delinquency and Claims Manual
Title Transfer
Short Sale / Pre-Sale
or
Acquire Title - REO
Status Reports
Certificate Level
Portfolio Level
Chris’s Queries T / F
The most important factor of the foreclosure sale bidding decision is knowing the fair market value.
Claim Settlement is may be adjusted if the MI company discovers the property is substantially in disrepair, not in marketable condition.
In order to file a MI claim the credit union will need to take title to, and have sold the REO property so that an exact loss is presented at time of filing.
After 60 days following the credit union taking title through foreclosure and REO sale does not need MI approval.
It is a good practice to foreclose on a 2nd lien, because the Credit Union remains in 1st position on the new title, and it is less expense to foreclose on the 2nd.
The borrower hardship is always important to document in a short sale or Deed in Lieu submission.
MI claim settlement allows the credit union to recover all standard foreclosure costs, lost interest, unpaid taxes, unpaid HOA dues, and a portion of the loss in market value.
Accepting a DIL on a property without a thorough title or abstract search completed might be a recipe for an extraordinary loss to the credit union.
A non-mitigating short sale is the best outcome for the Credit Union in nearly all scenarios.
Non-Claimable
_ Principal Loss
_ Cost from 2nd lien
– Judgments/Liens
– Penalty Interest
– Negative amortization
– HOA late charges
– Capital improvements & repairs exceeding
– $500 preservation allowance
– Tax Penalties
Deductible from Claim
– Escrow Balances
– Hazard Insurance Proceeds not Spent on Repair / Restoration
– Pledged Accounts
– Buy-down funds or other offsets
– Receivership
Claim Settlement• Percentage Option Settlement (default date to the claim filing date)
– % Coverage multiplied by claim amount, then adjusted by coverage options on certificate
• Pre-Approved Sale (PAS)
– Short sale, Pre-sale and post-foreclosure (REO); Need MI approval
• Acquisition
- MI company acquires property; mitigates loss through selling the property
• Negotiated Settlements
– Special Situations
• Closed Without Payment
- Could Not be Perfected – May be reopened
- Sale Proceeds Exceed Claim
*Terms of the applicable master policy apply
Property Disposition – Avoid Foreclosure
*Terms of the applicable master policy apply
Section 2 N – Mitigating Loss
Section 4 F - Conditions for payment of claim
1. Hardship Letter2. Income/expense sheet3. 2 recent paystubs4. Last 10405. Credit report6. BPO or Appraisal7. Sales contract (short sale)
Severe hardship
• No practical workout possible;
• List property of sale
• GSE & MI Approval Needed
Pre-sale sale avoids delinquency, foreclosure cost and delay
• Short Sale is a partial payoff at closing.
• Sale reflects Fair Market Value
• Hardship shown. GSE & MI Approval Needed
Documentation
Short Sale or Pre-Foreclosure Sale
Deed In Lieu of Foreclosure
Short Sale – Decision
• Member presents a short sale offer at
fair market value - 50% below UPB
• Loan is 150 days delinquent. Credit
score 585, Two 3 X 60, One 1X90
accounts.
• Income statement shows loss of job,
unemployment income and some PT
work. DTI is 140%.
• Hardship – Loss of Income, Recovery
Not Possible
Loss Mitigation Decision – Short Sale
• Short Sale presented at fair market
value; 26% below UPB.
• Loan is current. Credit report shows no
delinquent accounts or charge off.
719 score. Member on same job 5
years. Wife has lost 45% of income.
• Current PITI is 48%, Total DTI 76%.
• Hardship is based on equity loss in
area; 5-7 year recovery expected
Loss Mitigation – Deed In Lieu
• Borrower Has SS Income – Terminal Illness.
• Credit Union Holds a Savings Account; will
offset part of loss.
• Credit Union then decides to accept MI Claim
Settlement – let heirs take over property – No
FC, No Sale.
• There is a lis pendis on title due to
encroachment .
• Credit Union Accepted a DIL. No pre-
approval from CMG MI or Fannie.
• Sold Property in REO Sale – recovered
$27,500 of $105,000 Loss on Sale.
• File MI claim for Optional Settlement of
$86,500 Certificate.
• Research shows no delinquency.
Borrower hardship not established.
Good credit & reserves at time of DIL.
• Appraisal and BPO show REO Sale was
>15% below fair market value
*Terms of the applicable master policy apply
Modification Team – CMG MI Underwriters Fax - 888-763-2264
Mark Carbajal - Sales / Loss Mitigation #2537
Karen Dohrman – Claim Specialist #2581
Trey Matkin - Claim Specialist #2522
Karen Horvot – Claim Specialist # 2542
Nahima Quintana – Claim Specialist #2510
Nick Bray – Supervisor #2531
Chris Eckenroad – Manager #[email protected]
Scott RomesburgDirector, Underwriting, Operations & IT #2605
Delinquency, Claim & Loss Mitigation Team
800-909-4264
Thank You!
Preserving Homeownership
Mitigating Loss
CMG MI Team to Support Your Efforts
