Default and Claims Servicing Guidedocshare04.docshare.tips/files/21925/219254568.pdf · Claims Servicing Guide 2 Effective: September 17, 2012 Default and Claims Servicing Guide |

Effective September 17, 2012

Default and Claims Servicing Guide

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Effective: September 17, 2012

Default and Claims Servicing Guide | Revision notes

Revision notes

Revisions for September 17, 2012

The industry’s current focus on improving servicing practices for defaulted mortgage loans, specifically to address the Fannie Mae and Freddie Mac Servicing Alignment Initiative, presents an opportunity for Radian to adapt and update our Default and Claims Servicing Guide.

Updates to this Guide are intended to:

•Definetheterm“HighestStandardofServicingPerformance;”

•AlignRadian’sexpectationsfordefaultedloanservicingperformancewithstandard FannieMaeandFreddieMacpoliciesandprocedures;

•EstablishRadian’spositionandtheroleoftheServicerinthesuccessfulmanagement ofloanworkoutoptions;

•Clarifyclaimfilingandpaymentpractices.

ByaligningRadian’sexpectationsfordefaultedloanservicingperformancewiththeupdatedFannie Mae and Freddie Mac policies and procedures, Radian plans to consolidate and simplify informationcontainedwithintheGuide,andfocusonRadianspecificprocesses.Theformathasbeenre-designedtoincludenavigationtoolswhichallowforexactlocationofsubjectmatterreferences.

Bookmarks are displayed on the left side of the Adobe Acrobat Reader®. All eligibility topics can beaccessedbysimplyexpandingandclickingonthebookmarkofthesection,chapterorsubjectmatteryouwishtoreview.

In addition, hyperlinksareprovidedtotakeyoutoanotherareawithintheguidelineswhereyoucanfindadditionalinformationonaparticulartopic.Ifyouclickahyperlink,youmayreturn to your previous place bypressingdownthealt(Microsoft)orcommand(Macintosh)keyandthebackarrowkeyatthesametimeonyourkeyboard.

Should you have any questions about Radian’s default and/or claims servicing guidelines, please contact our Customer Care team at [email protected] 877.RADIAN1(723.4261) or your Radian representative.

Rev20121004


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Table of Contents

Revision notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Revisions for September 17, 2012. . . . . . . . . 2Navigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1 Servicing Standards . . . . . . . . . . . . . . . . . . . 6

A . Highest Standard of Servicing Performance . . . . . . . . . . . . . . . . 6

B . Servicer’s Basic Duties and Responsibilities . . . . . . . . . . . . . . . . . . 7

2 Default Servicing . . . . . . . . . . . . . . . . . . . . . . 8

A . Default Servicing . . . . . . . . . . . . . . . . . . . . 81. CommunicationwiththeBorrower . . . . 82. DelinquencyPrevention

and Management . . . . . . . . . . . . . . . . . 93. CollectionProcedures . . . . . . . . . . . . .104. BankruptcyProceedings . . . . . . . . . . .105. ForeclosureProceedings . . . . . . . . . . .10

3 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

A . Event Reporting . . . . . . . . . . . . . . . . . . . . 14

B . Loan Delinquency . . . . . . . . . . . . . . . . . . . 141. Initial Notification. . . . . . . . . . . . . . . . .142. Recurring Reporting Requirements . . .143. ReportDelivery . . . . . . . . . . . . . . . . . .15

C . Loan Workout/Modification Reporting . 15

D . Liquidation Reporting Requirements . . . 15

4 Loss Mitigation . . . . . . . . . . . . . . . . . . . . . . . 16

A . Radian Delegation . . . . . . . . . . . . . . . . . . 16

B . Retention Workout . . . . . . . . . . . . . . . . . . 161. Delegated Non-Modification Options .162. Delegated Modification Options . . . .173.Non-Delegated Modification Option . .18

C . Liquidation Workout . . . . . . . . . . . . . . . . 191. Delegated Liquidation Options . . . . . .192. Non-delegated Liquidation Options . .213. Terms/Conditions . . . . . . . . . . . . . . . .214. ComponentsofReview . . . . . . . . . . . .225. Evaluation Guidelines . . . . . . . . . . . . .22

D . Loan Charge Off . . . . . . . . . . . . . . . . . . . . 23

E . Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . 23

F . Deficiency Judgments . . . . . . . . . . . . . . . 23

G . Documentation/Financial Forms . . . . . . . 231. Streamlined Information Requirements .23

5 Claim Eligibility . . . . . . . . . . . . . . . . . . . . . . 25

A . The Terms and Limiting Conditions of Radian’s Master Policy . . . . . . . . . . . . 251. Limitations of Coverage. . . . . . . . . . . .252. ExclusionsfromCoverage. . . . . . . . . .253. InabilitytoEvaluateaClaim . . . . . . . .26

B . Loan Compliance to Underwriting Guidelines and Eligibility . . . . . . . . . . . . . 261. Delegated and Non-delegated

Underwriting . . . . . . . . . . . . . . . . . . . .262. Delegated Mortgage Insurance . . . . .26

C . Servicing Performance . . . . . . . . . . . . . . . 26

6 Initiation of a Claim . . . . . . . . . . . . . . . . . . 27

A . Claims Filing . . . . . . . . . . . . . . . . . . . . . . . 271. When to File . . . . . . . . . . . . . . . . . . . .272. Claims Filing Format . . . . . . . . . . . . . .283. AutomatedDocumentNotification . . .284. TimelineSummary . . . . . . . . . . . . . . . .28

7 Perfected Claim . . . . . . . . . . . . . . . . . . . . . . 29

A . Components of a Perfected Claim . . . . . 291. Required Documentation . . . . . . . . . . .292. Document Submission/Receipt . . . . . .30

B . Inability to Evaluate a Claim . . . . . . . . . . 31

C . Action During the Claim Filing Period . . . 311. Eviction of Tenants . . . . . . . . . . . . . . . .312. Filing of Claim before Eviction. . . . . . .31

D . Sale of REO Property/ Duty to Cooperate . . . . . . . . . . . . . . . . . . 311. ListingthePropertyForSale . . . . . . . .312. REOPurchaseOffers. . . . . . . . . . . . . .32

8 Claim Review/Evaluation . . . . . . . . . . . . . 33

A . Review Requirements . . . . . . . . . . . . . . . 33

B . Claim Review Timeline . . . . . . . . . . . . . . . 331. AccesstotheProperty . . . . . . . . . . . . .33

C . Claims Investigation . . . . . . . . . . . . . . . . . 331. Investigative Timeline . . . . . . . . . . . . . .332. InvestigationProcess . . . . . . . . . . . . . .33

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Default and Claims Servicing Guide | Table of Contents

9 Claim Disposition . . . . . . . . . . . . . . . . . . . . . 35

A . Factors in Rescissions . . . . . . . . . . . . . . . . 35

B . Appeal of Rescission . . . . . . . . . . . . . . . . 36

10 Claim Settlement . . . . . . . . . . . . . . . . . . . . . 37

A . Timing of Claim Settlement . . . . . . . . . . . 371. Additional Documentation. . . . . . . . . .372. Access . . . . . . . . . . . . . . . . . . . . . . . . .373. Acquisition . . . . . . . . . . . . . . . . . . . . . .374. SIUandDefaultServicing

Investigations . . . . . . . . . . . . . . . . . . . .375. LatePayment . . . . . . . . . . . . . . . . . . . .37

B . Timing of Claim Settlement Under Structured Pool Policies . . . . . . . . 37

C . Calculation of Claim Liability . . . . . . . . . . 381. ExplanationofBenefits(EOB). . . . . . .382. ClaimsAdjustments . . . . . . . . . . . . . . .383. ReturnofPaidClaimFunds . . . . . . . . .394. ClaimCurtailment . . . . . . . . . . . . . . . .39

Radian Default and Claims Contact Information . . . . . . . . . . . . . . . . 40

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . 41


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Introduction

This guide is intended to provide assistance designed to enable a loan servicer to meet the expectationsofRadianforservicingadelinquentordefaultedloanwithactiveRadianmortgageinsurance coverage.

TheServicingStandardsprovidedinthisguidedefineandoutlineRadian’sexpectationsforservicingperformance.Inordertopromoteefficiency,Radian’sexpectationsfordefaultedloanservicingperformancearecloselyalignedwiththoseofFannieMaeandFreddieMac,therefore,theGSEservicing guidelines should be considered a part of Radian’s guide. The information provided in the Default Servicing section highlights those requirements.

ThefocusofthisGuideistopresentRadian’spractices,requirementsandprocedureswhichareidentifiedindetailthroughouttheGuide.Thisincludesareviewof:

•Lossmitigationoptionsandcorrespondingdelegatedauthority;

•Factorswhichimpactandinfluencetheclaimsprocess,aswellasthedetailsnecessary to navigate this process.

InadditiontotheinformationinthisGuide,pleaseconsultRadian’sMasterPolicyandanyendorsementsorRadian’sPoolPolicyasapplicable,toidentifyspecifictermsandlimitingconditionsunderwhichRadianmortgageinsuranceisissued.Thesedocumentsprovideadditionaldetailsregarding the insured lender’s and Radian’s respective rights and responsibilities.

ThisGuideisreviewedandupdatedonaregularbasis.IntheeventapolicyorprocesschangeisimplementedpriortothenextscheduledGuiderevision,thedetailswillbecommunicatedintheformofaRadianServicerAlert.RadianServicerAlertscanbelocatedontheServicerpageofourwebsiteat www.radian.biz. As a courtesy, Radian maintains an active list of servicer contact information so that ServicerAlertscanbesenttokeypersonnelintheservicer’sorganization.Requestsforadditions,deletions or changes to Radian’s Servicer Alert email distribution list may be sent to our Customer Care team at [email protected].

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Default and Claims Servicing Guide | Servicing Standards

Servicing Standards1

RadianmortgageinsuranceisissuedunderthetermsandconditionsofRadian’sMasterPolicy.ThisPolicyspecificallyrequiresthatthoseresponsibleforservicingmortgageloansadheretothehigheststandardofservicingperformance.ThefollowingguidanceisintendedtoensureRadian’sservicingperformanceexpectationsaremet.

Highest Standard of Servicing PerformanceA .

Radiandefinestheterm“HighestStandardofServicingPerformance”as:

•ServiceroperationandperformanceincompliancewithallFannieMaeand/orFreddieMacrequirements as published in the Servicing Guides and related publications. This includes applicablerequirementsoftheFederalHousingFinanceAuthority’sServicingAlignmentInitiative, as they become effective.

•AdherencetoallrulesandregulationsspecifictomortgageloanservicingimposedbytheConsumerFinancialProtectionBureau(CFPB).

Impliedandexpressedwithin,istheservicerobligationto:

•ComplywiththetermsandrequirementsoftheapplicablePurchaseandSale,MasterServicer,ServicerorSub-Servicercontracts(“LenderContract”)underwhichloanservicingisperformed;and

•Utilizeindustrybestpractices.Implementandmaintainprocessesandproceduresusedthroughouttheindustrytominimizelossesandmaximizeopportunitiesforaborrowertoretain their home.

•Complywiththetermsandrequirementsofapplicablegovernment/Serviceragreementssuch as, but not limited to, the AG Settlement and resulting legislation.

Radian’sservicingperformanceexpectationsdonotexceedthoseestablishedbyGSEpublishedrequirementsand/orgovernmentmandates.ThereforeaservicerincompliancewithapplicablegovernmentmandatesandpublishedGSEservicingpolicywillmeetRadian’sMasterPolicyrequirementforHighestStandardofServicingPerformance.IntheeventFannieMae/FreddieMacrequirements differ, applicable GSE guidelines apply. Mortgage loans not purchased or securitized byeitherFannieMaeorFreddieMac,mayfollowtherequirementsofeitherGSE,solongastheyareconsistentlyfollowed.GSEpublishedservicingpolicyisreadilyavailableandisincorporatedherein by reference. This Guide does not duplicate this information in the discussion of Servicing Performance.HoweverGSEpolicyhighlightsareprovidedforsubjectmatterreference.


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Servicer’s Basic Duties and ResponsibilitiesB .

A Servicer is contracted to perform basic duties and accept specific responsibilities for proper servicing of a mortgage loan, to include the requirements of any other party that may have an interestinthewaythemortgageloanisserviced.Theserequirementsincludebutarenotlimited to:

•Employmentofproperlytrainedandknowledgeablestaff;

•Fullydocumentedandcurrentwrittenprocedures;

•Establishmentandmaintenanceofadequateinternalauditandmanagementcontrolsystemstoensurethatthemortgageloansareservicedinaccordancewithestablishedproceduresandwithsoundmortgagebankingandaccountingprinciples;

•Establishandmaintainpoliciesandprocedurestoguardagainstdishonest,fraudulent,ornegligentacts;

•Establishandmaintainpolicies,proceduresandinsurancecoveragetoguardagainsterrorsandomissionsbyofficers,employees,orothers;

•AdheretothelegalrequirementsofeachjurisdictioninwhichitoperatesandnotknowinglyorthroughnegligencebreachitsLenderContract;

•Useprudentprofessionaljudgmentintheperformanceofservicingduties;

•PerformallprofessionalfunctionsandtakeallnecessarystepstoprotectthecollateralsecuringthemortgageloaninsuredbyRadian;

•Implementandmaintainaviablebusinesscontinuityanddisasterplan.

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Default and Claims Servicing Guide | Default Servicing

Default Servicing2

The efficient and successful servicing of a delinquent loan may minimize the potential loss resulting fromaborrowerdefault.TherequiredstandardforDelinquentLoanServicingisestablishedbytheRadianMasterPolicywhichstates,inpertinentpart:

“EveryLoaninsuredunderthisPolicyshallbeservicedinareasonableandprudentmannerandconsistentwiththehigheststandardsofservicinginuseintheresidentialmortgageindustry.”

Claimeligibilityiscontingentuponexistenceofthefollowingcontrols/proceduresandexecutionofthefollowingtasksincompliancewiththeMasterPolicy,GSEguidelinesandcertaintimelinerequirements.

Default ServicingA .

InordertoachievetheHighestLevelofServicingPerformance,aservicermustemployawell-documentedcontrolsystemforthoseareasthatrepresentthegreatestriskexposureandpotentialforlosses.Thereforeaservicermustestablishasystem,compliantwithGSErequirements,forsuccessfullyservicingdelinquentmortgageloanstoinclude,ataminimum,thefollowing:

•Systemcontrolsthatprovideearlydetectionofdelinquentaccounts,andtheabilitytoalerttheappropriatedepartmentthatamortgageloanisdelinquentandinneedofattention;

•Acollectiondepartmentstaffthatistrained,competentandfamiliarwithallinvestorproceduralandreportingrequirementsaswellasfederalandstatecollectionlaws;

•Policiesandprocedurestoensuretheavailabilityofcounselingtoadviseborrowershowtoavoidorcuredelinquencies;

•Trainingandsystemcontrolsthatenabletimelyandaccurateanalysisofeachdelinquencyleadingtoearlyinterventiontomitigateloss;

•Instructionsandadequatecontrolsthatadheretofederalandstatelawsregardingconsumercontactwithrespecttodelinquencynotices,assessinglatecharges,returningpartial payments, maintaining and recording collection and default servicing activities, reportingdelinquenciestocreditbureaus,etc.;

•Regularandconsistentmanagementreviewofproceduresdesignedtoevaluatethecircumstances surrounding each default, potential loss mitigation opportunities, or the determinationtostartappropriateproceedings;

•Establishamethodtoregularlyreviewandaudittheservicer’sowndelinquencyandforeclosureratiosincomparisonwiththeindustrystandardpractices.

Communication with the Borrower1 . Direct,thoughtful,andrelevantcommunicationwiththeborrowerisidentifiedwithintheindustryas a best practice for servicing delinquent mortgages. Therefore the servicer must ensure that itsstaffistrainedandknowledgeableinallaspectsofcollectionandforeclosurepreventionstrategiesandabletoeffectivelycommunicatewithborrowersand/orrepresentativesandagentsauthorizedbyborrowers.Thisrequireshavingprocessesandproceduresinplaceto:

•Provideinitialandcontinuoustrainingandmonitoringofservicingpersonnel.


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•FollowQualityRightPartyContact(QRPC),auniformstandardforcommunicatingwiththeborrowerregardingtheresolutionofamortgagedelinquency.

•Respond,inatimelymanner,toallinquiriesreceivedfromborrowersabouttheterms oftheirmortgageloans,thestatusoftheiraccounts,andanyactionstakenornottakenin servicing their mortgage loans.

•Ensurethatborrowershaveaneffectivemeanstocommunicatewiththeserviceraboutdisputes and that procedures are in place to facilitate resolution of the dispute.

•Escalatecomplaintsordisputestoanindependentstaffthathasresolutionauthority.

•Identifyinefficienciesorproblemswithintheprocessandtakeappropriatecorrectiveaction.

a . Communication ObjectiveTheobjectiveofborrowercommunicationistoobtainordelivertheinformationnecessary to successfully resolve the default: This includes:

•Borrower’sabilityandwillingnesstopay;•Reasonfordefault;•Borrower’sintenttoretainordisposeoftheproperty;•Theexistenceofatemporaryorpermanenthardship;•Workoutoptions;•Consequencesofdefault;•Counselingservices.

b . Confidentiality of Radian Practices and ProceduresTheborrowerisnotapartyto,norabeneficiaryofthemortgageinsurancecontract(MasterPolicy).Itisnotappropriatetodisclosetoanyuninsuredthird-partytheconditionsunderwhichRadianiswillingtowaiveanyrightsestablishedundertheMasterPolicyand/ortoacceptaclaimviatheapprovalofarequestedworkout.Theborrower,realtors,borrower’sattorneyandotheruninsuredthirdpartiesarenottobeprovidedwithcommunicationsbetweenRadiananditsinsuredortheservicerrepresentingtheinsured.Radian’sfeedbackandcommunicationsareconfidentialandmeantfortheservicer and/or the insured only.

Delinquency Prevention and Management2 . Radiansupportsallreasonabledelinquencypreventionandmanagementeffortswhichhelptoavoidorcureadelinquencyasquicklyaspossible.ThesepracticesshouldalignwiththoseidentifiedbyRadianasprovidingHighestStandardofServicing.Keyeffortsareidentifiedbelow:

•Establishingqualityrightpartycontact(QRPC).•Assessinglatecharges.•AcceptingPartialPayments.•Usinganattorneytocollectpaymentsand/orestablishcontactwithaborrower.•Collectionunderanassignmentofrent.•ReapplyingPrincipalPrepayments.•ListingPropertyforSale/Rental.•ReferringtoCounselingAgencies.•OfferingEarlyDelinquencyCounseling.

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Collection Procedures3 . TheServicerisexpectedtofollowallapplicablecollectionproceduresallowedbylawandrequiredtomeetHighestServicingStandards.Theprimarygoalshouldbetobringdelinquentmortgageloanscurrentasquicklyaspossible.TheGSErequiredcollectionproceduresarespecific to each stage of delinquency and Radian supports those practices. For collection proceduredetailsandrequirements,pleaserefertotheGSEServicingGuide(s).

Bankruptcy Proceedings4 . Intheeventaborrowerfilesforprotectionunderbankruptcy,theservicermusttakeallactionsnecessarytoprotectthesecurityinvestment.Thisincludesanumberofstepsthatwillneedtobetakenoncenoticeisreceivedthatabankruptcyfilinghastakenplace,aswellasoverthecourseofthebankruptcyproceedings.

TheservicermustreporttoRadiantheinitiationofbankruptcyproceedingsinaccordancewithGSErequirementsafteritlearnsthattheborrowerhasfiledforbankruptcy(evenifthemortgageloaniscurrent).

Bankruptcy Management ProcessAservicermusthaveproceduresinplacetomanageChapter7,11,12and13bankruptcies,includingasystemtocontrolandmonitorbankruptcyproceedings.AservicermustdocumentinaccordancewithGSEpolicythatallrequiredactionsweretakentomanageaspecificbankruptcyinatimelyandappropriatemanner.Theseactionsinclude:

•ConfirmBankruptcyInformation.

•EstablishandmaintainfilestodocumentserviceractivityduringtheBankruptcy.

•ReferCasetoBankruptcyAttorney.

•SuspendDebtCollectionEfforts.

•NoticeofAppearanceFiling/BankruptcyNotices.

•ObtainandReviewStatements/Schedules/ReorganizationPlans.

•PrepareandFiletheProofofClaim.

•AttendInitialMeetingofCreditors.

•MonitorBorrowerPaymentsandCriticalDates.

•CommunicatewithBorrower’sattorneyregardingworkoutoptions.

Radian may request documentation to confirm the activities listed above.

Foreclosure Proceedings5 . Intheeventloanretentionorotherliquidationworkoutoptionsarenotappropriate,RadianexpectsthatforeclosureproceedingsbeinitiatedinaccordancewiththerequirementsoftheMasterPolicy,andnolaterthansixmonthsaftertheInsuredispermittedtodosoundertheloandocumentationandapplicablelaws. LinktoLossMitigation


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a. Foreclosure OverviewThe servicer shall timely commence and diligently pursue appropriate foreclosure proceedings in accordance with appropriate state laws and GSE guidelines. Once foreclosure has been initiated, its completion must be pursued diligently. If the borrower contests the foreclosure or files suit, Radian must be notified on the monthly delinquency report (MDR).

b. Foreclosure Expectations•Radianexpectsatimelyreferralafteraborrowerdefaults,aswellasasustainedand

reasonable effort to complete the foreclosure according to state requirements listed below.

•RadianrequiresthatitbenotifiedofanyextenuatingcircumstancesbeyondtheInsured/Servicer’s control which prevents a foreclosure action from being completed within the required time frame, a sample of which is provided below.

State Method of Foreclosure*

From LPI** to Foreclosure Sale

(# of Days)State Method of

Foreclosure*

From LPI** to Foreclosure Sale

(# of Days)

Alabama Non-Judicial 270 Nebraska Non-Judicial 330

Alaska Non-Judicial 300 Nevada Non-Judicial 360

Arizona Non-Judicial 300 New Hampshire Non-Judicial 270

Arkansas Non-Judicial 280 New Jersey Judicial 750

California Non-Judicial 300 NewMexico Judicial 450

Colorado Non-Judicial 330 New York City Judicial 990

Connecticut Judicial 690 New York Judicial 820

Delaware Judicial 480 North Carolina Non-Judicial 300

District of Columbia Non-Judicial 300 North Dakota Judicial 405

Florida Judicial 660 Ohio Judicial 450

Georgia Non-Judicial 270 Oklahoma Judicial 420

Guam Non-Judicial 500 Oregon Non-Judicial 330

Hawaii Judicial 500 Pennsylvania Judicial 480

Idaho Non-Judicial 440 Puerto Rico Judicial 720

Illinois Judicial 480 Rhode Island Non-Judicial 330

Indiana Judicial 480 South Carolina Judicial 420

Iowa Judicial 480 South Dakota Judicial 360

Kansas Judicial 330 Tennessee Non-Judicial 270

Kentucky Judicial 420 Texas Non-Judicial 270

Louisiana Judicial 390 Utah Non-Judicial 330

Maine Judicial 570 Vermont Judicial 510

Maryland Non-Judicial 485 Virgin Islands Judicial 510

Massachusetts Non-Judicial 350 Virginia Non-Judicial 270

Michigan Non-Judicial 270 Washington Non-Judicial 330

Minnesota Non-Judicial 270 West Virginia Non-Judicial 290

Mississippi Non-Judicial 270 Wisconsin Judicial 480

Missouri Non-Judicial 270 Wyoming Non-Judicial 270

Montana Judicial 360

*The Method of Foreclosure column reflects the preferred method of foreclosure for each jurisdiction. **Last Paid Installment

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c . Foreclosure MitigationWhile timely foreclosure processing is important, foreclosure alternatives should still beconsideredthroughouttheentireprocess.Ifappropriate,Radianwillauthorizepostponement or even cancellation of foreclosure sales to mitigate losses. Radian is flexibleinthetimeframesforcompletionoftheforeclosureproceedings,providedthattheInsured/Servicerpursueseffectiveandsustainedlossmitigationeffortsanddocumentshowthese efforts resulted in the foreclosure delay. If reasonable loss mitigation efforts and proper documentationarenotprovided,RadianwillenforcetheprovisionsoftheMasterPolicy.

d . Foreclosure DocumentationRadianmayrequestcopiesofalldocumentswithregardtoforeclosure.Thisincludesthepre-foreclosuretitlesearch,foreclosuredeed(whichneednotreflectrecordation),foreclosure complaints, and other notices and decrees. Radian may also request informationonwhethertheforeclosurewasjudicialornon-judicialandthenamesof all parties involved in the foreclosure.

Foreclosure sales results are to be sent to Radian via email [email protected] within48hoursaftertheforeclosuresaleisheld.ForeclosuresalesresultsaretoincludetheRadian certificate number, bid amount, foreclosure sale date, and the successful bidder.

e . Foreclosure Bid PriceForRadian-insuredloansownedbyFannieMae,RadianhasapprovedFannieMae’sforeclosurebiddinginstructionsdated01/31/03andpresentedinFannieMae’scurrent Servicing Guide. For all other loans, and in the absence of specific foreclosure biddinginstructionsfromRadian,theinsuredmustbidinaccordancewiththefollowingstate guidelines.

a) Instateswhichprovidedeficiencyrecoveryrights,orifspecialcircumstanceswarrant,Radianmayspecifyabidoutsideofthestateguidelinesinordertopreserve deficiency rights.

b)Radianwillnotrequireabidoflessthantheuninsuredloanamount.Iftherecommended bid per state guidelines is less than the uninsured loan amount, theinsuredmaybidtheuninsuredloanamount.Thechartshownbelowprovidesa sample of current state permitted bid instructions.



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* The bid must not exceed total debt . If the bid calculated according to the table above exceeds total debt, then bid total debt . Radian will not require a bid of less than the uninsured loan amount .

Uninsuredloanamount=Totaldebt-(totaldebtx%coverage);Totaldebt=Totaldebt+attorney’sfeesandcosts.

State Bidding Amount

AK TotalDebt AL Total Debt AR FMV - Full value* AZ Total Debt CA FMV - Full value* CO Total Debt CT FMV - Full value* DC FMV - Full value* DE FMV - Full value* FL Open @ $100 up to full FMV* GA FMV - Full value* Guam Total Debt HI FMV-Fullvalue* IA Total Debt ID FMV - Full value* IL Total Debt IN FMV - Full value* KS TotalDebt KY FMV-Fullvalue* LA FMV - Full value* MA FMV - Full value* MD FMV - Full value* ME FMV - Full value* MI Total Debt MN Total Debt MO FMV - Full value* MS FMV - Full value*

State Bidding Amount

MT FMV - Full value* NC FMV - Full value* ND Total Debt NE FMV - Full value* NH FMV-Fullvalue* NJ Open @ $100 up to full FMV* NM Total Debt NV FMV - Full value* NY Open@$500uptofullFMV* OH FMV-Fullvalue* OK FMV-Fullvalue* OR FMV - Full value* PA Open@SheriffcostuptofullFMV* PuertoRico FMV-Fullvalue* RI FMV - Full value* SC FMV - Full value* SD FMV - Full value* TN FMV - Full value* TX FMV - Full value* UT Total Debt VA FMV - Full value* VT FMV - Full value* WA Total Debt WI FMV - Full value* WV FMV - Full value* WY TotalDebt


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Default and Claims Servicing Guide | Reporting

Reporting3

Event ReportingA .

ThefollowingoccurrencesaretobereportedtoRadianastheymayimpactthecollateralsecuring the insured loan.

•Borrowerdeath.•HazardInsuranceClaiminexcessof$10,000filedonsubjectproperty.•Substantialdestructionofcollateral.•Propertyvacancy.•Propertycondemnation.•Titleissueadverselyaffectingtheinsured’sfirstlienposition.

Intheeventanoccurrencecoincideswithloandefault,thisinformationisexpectedtobeincludedinthenormaldefaultreporting.Forthoseoccurrenceswhichdonotcoincidewithloandefault, the Servicer is to report the event to Radian via email at [email protected], upon discovery,nolongerthan30(thirty)daysafteritisknown.

Loan DelinquencyB .

Radian requires that the servicer report specific delinquent loan information in order to predict future claim filings.

Initial Notification1 . TheNoticeofDefault(NOD)istobeusedatthetimeofinitialnotification.LinktoNoticeofDefault

Default Status Initial Notification

Early-Payment DefaultsTheborrowerfailstomakeanyoftheinitial12 monthly loan payments.

ReportusingaNoticeofDefault(NOD)nolaterthanday45inthedelinquency.

Seasoned-Payment DefaultsTheborrowerfailstomakethreeconsecutive payments after the first year of timely loan payments.

ReportusingaNoticeofDefault(NOD)nolaterthanday 75 in the delinquency.

Current Loan in JeopardyInformation made available to the Servicerindicatestheloanisinjeopardyof imminent default.

ReportusingaNoticeofDefault(NOD)onlyafteracarefulreviewofthefactsandcircumstancessurroundingthecase.

Recurring Reporting Requirements2 . TheMonthlyDelinquencyReportDocument(MDR)istobeusedforallsubsequentand recurring reporting.

LinktoMonthlyDelinquencyReport

http://www.radian.biz/page?name=ServicingGuidesAndForms



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For all defaulted loans reported to Radian, the Servicer is required to provide thefollowinginformationonarecurringmonthlybasis:

•Theduedate;•Specificreasonfordefault;•Allcontactefforts;•Thespecificresultsofanyborrowercontact;•Anyactiontakenspecifictoaretentionworkout.

MonthlyDelinquencyReports(MDR)mustcontinueuntilithasbeenreportedthat:

a) Theborrowerisnolongerindefault; b) Theloanhasbeenpaidinfull; c) Theservicinghasbeentransferred(servicingtransfersshouldnotbereported

aspaidinfullorcures); d) Theborrowerhascompletedthemodificationtrialperiodandtheloanhas

beenbroughtcurrentasaresultofacompletedmodification; e) Applicablebankruptcy/foreclosureproceedingshaveconcluded;ortheclaim

has been paid.

Report Delivery3 . Initialnotification(NOD)andrecurringmonthlyreporting(MDR)maybedeliveredviaelectronic file transmission, computer tape or by an individual report sent to Radian.

ForNODsubmissionsotherthanEDI,anMDRfromRadianwillbeproducedandprovidedto the lender each month until the loan cures, pays off, or a claim is filed. The completed form should then be returned to [email protected].

IfpriorarrangementshavebeenmadewithRadiantoreportloansindefaultbyelectronicfiletransmission,RadianwillnotsendMDRstothelender.Thelendercanchoosetotransmitanelectronicfileeachmonth,[email protected], or drop the file in an inbounddesignatedfolderforFTPtransmission.ThisfilemustbereceivedbyRadiannolaterthan the last day of each month. For specific instructions before choosing this option, please contact Radian’s Default Reporting Department at [email protected].

Loan Workout/Modification ReportingC .

InOctober2011,RadianjoinedtheMortgageInsuranceCompaniesofAmerica(MICA)intheadoptionofanewstandardizedtemplateforservicerstoreportloanworkouts.ServicerswererequiredtobeginusingthistemplateinApril,2012and,followingatransitionperiod,willbenotifiedbyRadiantodiscontinueanylegacymethodsforworkoutsubmissions.ServicerscancontacttheirRadianRiskManagertoobtainadditionalguidanceonthecompletionandsubmissionrequirementsofthenewtemplate.

Linktomodificationreporting

Liquidation Reporting RequirementsD .

Linktoliquidationreporting

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Default and Claims Servicing Guide | Loss Mitigation

Loss Mitigation4

A timely evaluation of foreclosure prevention alternatives is to occur once the servicer determines a defaultisimminent.GovernmentmandatessuchastheAGSettlementmustbefollowedwhenapplicable;otherwise,theServiceristofollowtheestablishedGSEworkouthierarchy,whichdetailsthepreferredorder of consideration for the use of special relief measures and foreclosure prevention options. This includesaproceduretoobtainrelevantborrowerpersonalandfinancialinformationtodeterminetheappropriateworkoutsolution,whichincludesbothretentionandliquidationalternatives.Itisimperativethattheservicerexhaustallretentionworkoutoptionsbeforepursuingaliquidationworkout.ThefollowingstructurerepresentstheGSEandRadian’spreferredhierarchy:

Retention Workouts 1. Reinstatement2. RepaymentPlan3. Forbearance4. LoanModification

Liquidation Workouts 5. Pre-foreclosure(Short)Sale6. Deed-in-lieuofforeclosure7. Foreclosure Sale

Radian DelegationA .

Radian values and encourages any and all efforts by the Servicer to mitigate loss. To assist intheseefforts,Radianextendstotheservicercertaindelegatedauthority.

ThedelegatedauthorityidentifiedwithinthisGuideisextendedforthesolepurposeoffacilitatingtheservicer’sexecutionofworkoutoptions.Thisauthorityisexpresslylimitedtothoseworkoutoptionswhich:

•Meettheinvestor/insured’sguidelines;and•Providetheassistancenecessarytoresolveadefaultsituation.

Thisdelegationpermitstheservicertoexerciseindependentandprudentjudgmentinprovidingworkoutoptionstoborrower(s)andisnotlimitedtogovernmentsponsoredworkoutoptions,suchastheTreasury’sHomeAffordableModificationProgram(HAMP).

Retention WorkoutB .

Delegated Non-Modification Options1 . Radianextendstotheservicerfulldelegatedauthoritytoexecutethefollowingnon-modificationretentionworkoutoptions.Theseincluderepaymentsplans,forbearanceplans,partialreinstatements and stipulation agreements. Radian is to be notified of the completion of such efforts through standard default reporting requirements.Linktodefaultreportingrequirements


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Fully Delegated Retention Workout Options Coverage TypeRepayment Plan:Aplanbasedonaborrower’sfinancialsituationtospreadoutrepaymentofapast-duebalanceoveranextendedperiodoftime.Arepaymentplandoesnotchangetheoriginalterms of the Loan.

PrimaryandPool

Forbearance Plan:Providesatemporaryreductionorsuspensionofpaymentsonamortgageloan;anditistypicallyincorporatedinapaymentarrangementtocureanydelinquentpaymentaftertheunderlyinghardshiphasgoneaway.

Partial Reinstatement:ApaymenttransactionwhereintheBorrower(s)paysaportionoftheLoanarrearsandagreestoarepaymentplanforthebalanceowed.

Stipulation Agreement:Apostforeclosureinitiatedagreementunderwhichtheborroweragreestowaivealldefensestoaforeclosureactionandmakeacertainnumberofpayments,inordertobeconsidered for a loan modification or to reinstate the mortgage.

Delegated Modification Options 2 . Radiansupportsmodificationeffortswhenevertheservicerhasobtainedinformationsufficienttoascertainthattherepaymenttermsofthemodifiedloanareaffordablefortheborrower.RadianextendstotheServicerdelegatedauthoritytocompleteamodificationbasedonthefollowingconditions.

Treasury’s Home Affordable Modification Program (HAMP) – GSE Loans RadianagreestoprovideservicerswithRadianDelegatedauthorityinordertosupporttheexecutionofloanmodificationswithintheTreasury’sHomeAffordableModificationProgram(HAMP).Thesemodificationsmustmeetallguidelines/requirementsundertheapplicableGSEHAMPpolicy.

Delegated Retention Workout OptionsWorkout/Coverage Type Delegated Program Requirements

Modification

Modification terms: •Mustresultinapaymentthatisaffordablefortheborrower•DoesnotreleaseanyportionofthecollateralCoverage terms: •Coverageextendedtothemodifiedunpaidprincipalbalance(UPB)onallHAMPmodifications.•RadianwilllimitcoveragetothemodifiedUPBuptotheoriginalloanamountonallnon-HAMPmodifications.

ForcoverageonGSEnon-HAMPmodifications,pleasecheckcoveragelimitsforeachGSE.

Modification with Principal Forgiveness*

Loan Status: Loansmustbeatleast60daysdelinquent.Premium Payment(monthly/annual):CalculatedfromthemodifiedUnpaidBalance(UPB).Coverage terms: Includesanypartofprincipalthatwasforgivenpursuanttoaworkout,butexcludesanyinterest accumulated on the forgiven principal after the date of the modificationClaim Payment: In the event a loan modification involving principal forgiveness re-defaults and a claim is submitted, theclaimpaymentamountshallbereducedbytheamountofpremiumthatRadianwouldhavereceived on the forgiven principal from the date of modification through the date of default.

*PrincipalForgiveness:Radianwillnotterminatecoverageuponremovaloftheunderlyingloanfromthesecuritizationduetothemodification.RadianreservesanyrightsordefensesitmayhaveunderitsapplicableMasterPolicy.UndernocircumstanceswillRadiancoverprincipalforgivenesswhentheprincipalforgivenessiscourtorderedinsettlementofanylitigation or other administrative action involving the insured and/or servicer.

Delegated Loan Modification Program Reporting RequirementsThe status of a loan modification, including a trial plan, completion or cancellation must be reported to Radian using the Delegated Loan Modification Notice.LinktoDelegatedLoanModificationNotice


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ThisreportingrequirementappliestobothHAMPandnon-HAMPmodifications.Inaddition:

HAMPFor any loan deemed to be in imminent default under the provisions of the Treasury’s “MakingHomeAffordable”program,aNODmustbeforwardedtoRadian.

LinktoLoanDelinquency;InitialNotification

HARPA Notification of Mortgage Insurance Modification is to be completed and emailed toRadianatthetimethenewHARPloanisoriginated.SeeRadian’swebsiteforcomplete details.

LinktoHARPguideliness

PrincipalForgivenessRadianmustbenotifiedofallprincipalforgivenessworkoutplanswithin30daysofborrowerexecutionofthemodificationagreementusingtheDelegated Loan Modification Notice.

Non-Delegated Modification Option3 . a . MI Second Look ProgramThecompaniesoftheMortgageInsuranceCompaniesofAmerica(MICA)establishedtheMISecondLookPrograminMay2009tohelpavoidpotentialdisparatetreatmentofborrowerswithinsuredmortgageloansbyfacilitatingmodifications,forHAMP-eligibleloansintheirportfoliosthatfailtheTreasuryNPVtest.TheMICAcompaniesactedinFebruary2010toenhancesupportofHAMPandminimizeexceptionprocessingforservicersbyimplementingMISecondLook.

AllrequestsundertheMISecondLookprogrammustbesubmittedtoRadianidentifiedasanMISecondLookrequest.ServicersarerequiredtoconsiderMISecondLookasan option of last resort for aiding modifications on any Radian-insured loan that meets therequirementsbelowandmustdocumenttheirsystemstoreflectsuch.

•Theloanmustbe90daysormorepastdue.

•TheloanhasacurrentLTVgreaterthan90%establishedbyanappraisalorbrokerpriceopinion(BPO),interiorinspection,performedandreportedwithinthemostrecent120days.

•Theloanwasoriginatedpriorto01/01/2009.

•Non-GSEloansonly.

•Primarycoverageonly.

•Propertymustbethecurrentprimaryresidenceoftheborrower.

•Theborrowerisnotinbankruptcy.

•TheServicerhasexhaustedallotheravailablemodificationoptions.

•Therequestedadvanceamountdoesnotexceedthemaximumcoverageoftheloan,less any prior advances made.

•TheServiceragreesthatanadvancegreaterthan65%ofthemaximumclaimamountis deemed to be a commutation of the mortgage insurance coverage.



http://www.radian.biz/page?name=HASPSameServicerPerf


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b . MI Second Look Submission Process•ServicersmustsubmitallrequestselectronicallytoMISecondLook@radian.biz usingtheMISecondLookRequestTemplate.

LinktoMISecondLookRequestTemplate

•AfterreceiptofacompleteMISecondLookRequest,Radianwillrespondtotherequestwithin10businessdays.

•Servicerwillmaintainallofthesupportingdocumentationusedtosupporttherequest.Radian may request the servicer provide this documentation and additional documentationinordertomakeitsdecision.

•Ifanadvancerequestisapproved,itwillbefundedaftertheServicernotifiesRadianthemodificationhasbeenexecuted,reportedandtheloanhascured.

Liquidation WorkoutC .

Forcertainliquidatingworkouttypes(shortsales,assumptions,shortrefinancesanddeeds-in-lieu)Radianwillnotconsideraclaimunlesstheloanisindefault(60daysormorepastdue).Linktoliquidationoptions

ItisRadianpolicytowaiveitsrightofsubrogationtopursuethedeficiencyuponcompletionof an approved or delegated short sale or deed-in-lieu of foreclosure.

Delegated Liquidation Options1 . LinktoRadiandelegation

Radian may, at its sole discretion, grant delegated authority to provide liquidation options totheborrowerthathelptoresolveadefaultsituationasfollows:

•FulldelegatedauthorityforShortSaleandDeed-in-lieutransactionsunderagreementsreachedbetweenRadianandtheGSEsonGSEownedloans.TheServicerisexpectedtofollowtheliquidatedworkoutguidelinesandproceduresestablishedbytheagreementsfor all Loans insured by Radian.

•Delegatedauthority,accordingtothefollowingtermsandconditions,isavailable onallnon-FannieMaeownedloans,HAFA*loansand/orassumptions.

HAFAisafederalprogramthatauthorizesaparticipatingmortgagelender/servicertoconsenttoasaleofthepropertybytheborrower(shortsale)withpre-approvedtermsandconditions in order to avoid foreclosure. A deed-in-lieu of foreclosure may also be an option undertheHAFAprogramifsellingthepropertyisnotfeasible.

*HomeAffordableForeclosureAlternatives(HAFA)



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Delegated Program RequirementsShort Sale; Primary Coverage only

Loan: Loanis60daysormorepastdueasoftheservicer’sshortsalewrittenapprovaldate.

Borrower Participation: Serviceruseditsbesteffortstoobtainreasonableborrowerfinancialparticipation(ifappropriate).

Claim: •EstimatedRadianclaimpaymentdoesnotexceed$30,000.•Restorationadjustmentwaivedifrepaircostlessthan$7,500.•IftheestimatedlossfromthesaletransactiondoesnotexceedRadian’sprimarycoverageclaimpayment,thefollowingcriteriamustbemet:

–NetProceedstoPropertyValueratiomustbe82%ormore.

Documentation:•CreditReportobtainedsubsequenttotheShortSalerequestmustindicatethePrimaryBorrower’sFICO

is 580 or less.•InteriorBPO/Appraisaltobedated180daysorlesspriortotheservicer’sshortsalewrittenapprovaldate.•CopyoffinalHUD1settlementstatement.•Assessmentregardingborrowerparticipation.

Deed-in-lieu of Foreclosure; Primary Coverage only

Loan: •Loanis60daysormorepastdueatthetimetheDeed-in-lieuofForeclosuredocumentisexecutedbytheborrower.•Loanmusthavebeenoriginatedasowneroccupied,primaryresidence.•CompletedDeed-in-lieuofForeclosuremustbereportedtothemajorcreditrepositories.

Borrower Participation: Serviceruseditsbesteffortstoobtainreasonableborrowerfinancialparticipation(ifappropriate).

Property: •Propertymustbelistedatfairmarketvalueforatleast90daysunlessprimaryborrowerisdeceasedortheborrowerhasobtainedaChapter7bankruptcydischargeofmortgageliability.

•Priortoconveyance,titletothepropertymustbefreeandclearofallliensandencumbrances.

Claim: •EstimatedRadianclaimpaymentisnottoexceed$30,000.•CompletedDeed-in-lieuofForeclosuremustbereportedtothemajorcreditrepositories.•Fund(s)disbursedtoajuniorlienholdertofacilitatecleartitlearenotclaimableunlessapprovedinwriting

by Radian Loss Mitigation.

Documentation: •CreditReportobtainedsubsequenttotheDeed-in-lieuofForeclosurerequestmustindicatethePrimaryBorrower’s

FICO is 580 or less.•InteriorBPO/AppraisalDatemustbe180daysorlesspriortotheServicer’sDeed-in-lieuapprovaldate.

a . Liquidation Reporting RequirementsShortsaleandDeed-in-lieustatusisreportedtoRadianusingtheDelegatedPre-foreclosureSale Notice.DelegatedPre-foreclosureSaleNotice.

Short saleAt time of claim filing, notify Radian of sale results and submit all documents from the transaction.

Deed-in-lieuAt the time of claim filing, notify Radian that title has been acquired via Deed-in-lieu and submit all documents from the transaction.

AssumptionNotifyRadian’sCustomerCaredepartmentofassumptiontermsandnewborrowerinformation by emailing [email protected].




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Non-delegated Liquidation Options2 . All loans not meeting Radian’s Liquidation delegated authority, must be submitted by the Servicer prior to the liquidation event occurring. These events include:

Pre-Foreclosure;ShortSales;ShortRefinances;andDeeds-in-lieu of Foreclosure.

[email protected], 877.RADIAN1(723.4261) andaskfortheLiquidationteamifyouwishtodiscussorsubmitaliquidationworkoutrequest.LinktoDelegatedLiquidationOptions

ForHAFAloansnotmeetingdelegatedauthorityguidelines:

•TheServicermustobtainRadian‘swrittenapprovaltodetermineifHAFAprogramrequirementscanbemetbeforecommunicatingHAFAeligibilitytotheborroweror anythirdpartyassociatedwiththeLiquidatingWorkout.

•RadianreservesitsrightsanddefensesundertheMasterPolicyforclaimssubmittedsubsequenttoaHAFALiquidatingWorkout.CertainHAFA-relatedexpensesarenotclaimable(relocationassistance,forexample).

•InformationrequirementsforHAFALiquidatingWorkoutrequestsarestreamlined.TheServicershouldsubmitallLiquidatingWorkoutrequeststotheassignedRadianLossMitigationSpecialistviaemailnotingtherequestisspecifictoHAFA.

LinktoDocumentation;StreamlinedInformationRequirements

Terms/Conditions 3 . a . Delinquency StatusInorderforaliquidatingworkoutrequesttobeconsidered,aloanmustbe60daysor more past due unlessoneofthefollowingexceptionsapply:

•TheBorrowerhasbeendischargedfrommortgageliabilitythroughChapter7Bankruptcy(confirmedbyrecentcreditreportoracopyofthebankruptcydocument).

•TheBorrowerisdeceased(copyoftheDeathCertificaterequired).

•InvoluntaryEmploymentRelocation(requiredsupportingdocumentationmayincludea signed and dated letter from the prior and/or current employer confirming an employmentchangeorlayoffthatrequiredrelocation).

IntheeventnoneoftheaboveexceptionsappliesandtheServicerbelievesitappropriatetomoveforwardwiththetransaction,Radianmayconsideranegotiatesettlementandacceptaclaim.PleasecontactaRadianLoanWorkoutSpecialistatclaims.department@radian.biztodiscussaworkoutofthisnature.

b . Waiver of Policy Rights/RequirementsInconsideringaLiquidatingWorkout,RadianisbeingaskedtowaivethefollowingrightsunderitsMasterPolicy:

•Therequirementthattheinsuredobtaintitletotheproperty(PrimaryCoverage);

•TherequirementthattheinsuredobtaintitletothepropertyandselltheREO(PoolCoverage);


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•Therightofsubrogationwithrespecttodeficiencies;

•Therighttoacquiretitletotheproperty.

RadianreservesallrightsanddefensesundertheapplicablePolicyofInsurancenottacitlywaivedbyitsapprovalofaLiquidatingWorkout,includingtherighttorescindcoverage or deny claims.

Components of Review4 . Radian’sreviewofaliquidatingworkoutrequirestheServicerobtainandsubmitspecificdocuments and information.

LinktoDocumentation/FinancialForms

ThisinformationwillbeusedbyRadiantoevaluatethefollowingfactors:

•Whethertheborrowerhastheabilitytopayalloraportionoftheamountowed;

•Theborrower’soriginaloccupancyintentandcurrentoccupancy;

•Theestimatedproceedsfromtheliquidatingworkoutrelativetotheproperty’sfairmarketvalueandsellercosts;

•WhethertheServicerofferedappropriateLossMitigationservicestotheborrower;

•WhethertheproposedLiquidatingWorkoutisanarm’s-lengthtransaction;

•AnyotherfactorbearingontheproprietyoftheproposedLiquidatingWorkout.

RadianwillconductallofitscommunicationsrelatingtoliquidatingworkoutsexclusivelywiththeServicer.AnycommunicationsfromaninterestedthirdpartytoRadianwillbereferredtotheServicer.TheServicerwillbesolelyresponsibleforanyandallcommunicationswiththeborrowerand/oranyinterestedthirdparties.

Evaluation Guidelines 5 . For primary and/or modified pool coverage where the estimated loss exceeds Radian’s maximum coverage amount:

RatherthanrefuseaLiquidatingWorkoutrequest,Radianwillreviewtherequestand,ifappropriate,communicateaproposedclaimpaymentadjustment(reduction)alongwithanyothertermsandconditions.AnyproposedadjustmentisspecifictotheLiquidatingWorkoutrequest.

Theproposedclaimpaymentadjustmentwillvaryrelativetothefactssurroundingtherequest.IntheeventRadianprovidesbothprimaryandmodifiedpoolcoveragetheadjustmentwillbebased on the total estimated loss to Radian under both coverages.

The Servicer may, in its sole discretion:

•AcceptRadian’sconditionalapprovalandproceedwiththetransaction;

•Offertoreducetheproposedclaimpaymentbyadjustingthenetproceedsrequirement;

•ProvideRadianwithadditionaldocumentationthatsupportsaneliminationorreductiontotheproposedclaimpaymentadjustment;

•Declineourconditionalapprovalandcontinuetoservicetheloaninaccordancewiththe requirements of Radian’s Default and Claims Servicing Guide.



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Loan Charge OffD .

A charge off isaresolutionavailabletotheinsuredwheretheoutstandingdebtofadelinquentmortgageloaniswrittenoffasalosswithouttheServicertakingtitletothesubjectproperty.

Radian has no liability to accept or pay a claim on a charged off account under any policy of coveragewhentheInsuredhasnotacquiredcleartitletotheproperty.RadianreservesallofitsrightsanddefensesundertheapplicablePolicyofInsurance,includingtherighttorescindcoverageordenyclaims.Withoutwaivinganyofitsrights,Radianmay,underappropriatecircumstances,considerreducedpaymentsinexchangeforcancellationofcoverageoncharged off loan accounts.

[email protected], 877.RADIAN1(723.4261) andaskfortheLossMitigationteamifyouwishtodiscussacharge-offsituation.

ForeclosureE .

Loss Mitigation Methods and Strategies

It is the responsibility of the Servicer to:

•Performathoroughreviewofthecircumstancessurroundingthedefaultandtheresultsof prior servicing activities prior to commencing foreclosure proceeding.

•Offerorencouragedelinquentborrowerstoseekfreeorlow-costconsumercreditcounseling services.

•Establishabusinessprocesstoensurethatallcasesarereviewedbeforereferraltoforeclosureand that all reasonable steps have been diligently pursued to avoid the need for referral.

•Complywith,allfederal,state,andlocallaws(includingstatutes,regulations,ordinances,administrativerulesandordersandjudicialrulingsandopinionsthathavetheeffectoflaw)thatapplytoanyofitsorigination,selling,servicingorotherbusinesspractices(includingtheuseoftechnology)thatmayhaveamaterialeffectontheresultsofservicingactivities.Amongotherthings,thismeansthattheservicermustcomplywithanyapplicablelawthataddressesfairhousingandequalcreditlaws.

•Complywithconflictofinterest/confidentialityresponsibilities.

Deficiency JudgmentsF .

Radiansubrogatestothelender’srightstopursueadeficiency.OnRadianinsuredloans,wereservetherighttopursueborrowersdirectlywherepermittedbystatelaw.Theserightsmustbe preserved and protected by the Insured/Servicer.

Documentation/Financial FormsG .

Streamlined Information Requirements1 . Radianunderstandsthattimeisoftheessencewhenpursuingandevaluatinglossmitigationopportunities. This is particularly true for time-sensitive liquidatingworkout.


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PleasebeawarethatthefollowinginformationmustbesubmittedtoRadiantoconfirmServicereffortsregardingliquidatingworkouts:

1st Lien – Loss Mitigation Streamlined Short Sale Information Requirements

Submit,viasecureemail,toaRadianLossMitigationSpecialistthefollowinginformation:

•YourLoanNumber

•RadianCertificateNumber

•Borrower(s)LastName(s)

•NextPaymentDueDate

•UnpaidPrincipalBalance(UPB)

•TotalMortgageDebt(UPB,pastdueinterest,costs,advances,etc.)

•ForeclosureSaleDate(ifapplicable)

•PropertyValue,ValueDateandValueType(BPO,Appraisal,AVM,etc.)

•RecommendedListPrice/PurchaseAmount

•EstimatedNetProceeds

•AnticipatedClosingDate(ifknown)

•ReasonforDefault(ifknown)

•Anymaterialinformationthatyoubelieveshouldbedisclosedtofacilitateadecision. (HAFAprogramforexample)

•Nameandphonenumberofsubmitter

1st Lien Product – Loss Mitigation Streamlined Deed-in-lieu of Foreclosure Information Requirements

SubmittoaRadianLossMitigationSpecialistviasecureemailthefollowinginformation:

•YourLoanNumber

•RadianCertificateNumber

•Borrower(s)LastName(s)

•NextPaymentDueDate

•UnpaidPrincipalBalance(UPB)

•EstimatedTotalMortgageDebt(UPB,pastdueinterest,costs,advances,etc.)

•PropertyValue,DateandType(BPO,Appraisal,AVM,etc.)

•IsthePropertylistedforSale?Ifyes,whatisthecurrentaskingprice?

•Reasonfordefault(briefdescription)

•Nameandphonenumberofsubmitter

•Anymaterialinformationthatshouldbedisclosedtofacilitateadecision (HAFAprogramforexample)



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Claim Eligibility5

The eligibility of a Claim is determined by:

1.) TheTermsandLimitingConditionsofRadian’sMasterPolicy

2.) CompliancewithUnderwritingGuidelinesandEligibilityCriteria

3.) ServicingPerformance

The Terms and Limiting Conditions of Radian’s Master PolicyA .

Limitations of Coverage1 . Priortoanyofthefollowingactionsbeingtaken,itisnecessarytocontactaRadianLossMitigation Specialist to obtain Radian’s prior consent in order to ensure continued coverage of the loan. Failure to obtain Radian’s prior consent may result in termination of coverage pursuanttothetermsofRadian’sMasterPolicy.

•AnymaterialchangeormodificationofthetermsoftheLoanincluding,butnotlimitedto,theUPBinterestrate,termoramortizationschedule,exceptingonlysuchmodificationsspecificallyprovidedforintheLoandocuments,andpermittedwithoutfurtherapprovalor consent of the Insured.

LinktoDelegatedModificationOptions

•Anyreleaseofaborrowerfromliabilityfortheloan,includinganyloanprincipalforgiveness.

Certain specific principal forgiveness modifications may be completed using delegated authority.

LinktoPrincipalForgivenessdelegation

•Anyassumptionofliabilityfortheloanwithreleaseoftheoriginalborrowerfromliability.

•Anyreleaseofthecollateraloranypartialreleaseofthecollateral.

•Anychangeinthecharacteroruseoftheproperty(forexample,theconversionofa single-familyhomeintoacommercialproperty).

•Anytransferorsaleoftheservicingoftheloantoacompanynotapproved*byRadian.

*ApprovalrequirestheServicertohaveanactiveMasterPolicywithRadian.

Exclusions from Coverage2 . Radian’scoverageislimitedtothenormalriskofadefaultcausedbyachangeintheborrower’seconomiccircumstances.InsurancecoverageundertheMasterPolicydoesnotextendtocertainrisks.Theoccurrenceofanyofthefollowingmayresultindenialofcoverageor curtailment of claim payment.

LinktoRadian’sMasterPolicy

•Anylossresultingfromthelenderexercisingitsrighttoacceleratetheloanbasedonaballoonpaymentclauseintheloandocument.However,iftheborrowerrefusestoacceptanextensionorrenewalofthemortgagetermsatmarketratesfromthelender,thisconditionwillnotapply.

Default and Claims Servicing Guide | Claim Eligibility

http://www.radian.biz/page?name=MasterPolicy

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•AnylossonaloanwhichwasdelinquentpriortoRadianissuinginsurancecoverageon that loan.

•Anylossastheresultofincompleteconstructionoftheinsuredproperty.

•AnylossresultingfromfraudormisrepresentationofamaterialfactuponwhichRadianbaseditsdecision,inwholeorinpart,toinsuretheloan.

•Anylossormaterialincreaseinriskoflossresultingfromnegligenceintheoriginationof the loan or servicing of the loan prior to or after default.

•AnycostorexpensetorepairanyphysicaldamagetotheProperty,includingbutnotlimited to physical damage arising from:–Contaminationbytoxicwasteorhazardouswater;–Earthquake,flood,orotheractofGod;–Civilwarorriot;– Any defects in construction not identified in the Application for Insurance.

Inability to Evaluate a Claim3 . In order for a Claim to be eligible, Radian must be in receipt of all requested documentation whichitconsiders,initssolediscretion,tobereasonablynecessarytoevaluateliabilitywithrespect to the Claim.

FailuretosubmitaPerfectedClaimwithinthetimeperiodspecifiedbythepertinentpolicyshallrelieveRadianofanyobligationorliabilitywithrespecttotheunderlyingCertificateof Insurance.

LinktoPerfectedClaim

Loan Compliance to Underwriting Guidelines and EligibilityB .

Delegated and Non-delegated Underwriting1 . For both delegated and non-delegated mortgage insurance, Radian relies on the lender’s representationandwarrantythattheloanclosedincompliancewiththetermsandconditionsunderwhichtheloanwasunderwrittenandapproved.AdherencetothisrequirementisreviewedbyRadianwhenamortgageinsuranceclaimissubmitted.

Delegated Mortgage Insurance2 . For delegated mortgage insurance, Radian further relies on the lender’s representation andwarrantythattheloanfileandapplicationformortgageinsurancehavebeenpresentedaccuratelyandunderwritteninaccordancewiththeagreeduponinsuranceunderwritingstandards.Adherencetotheunderwritingstandardsbehindthelender’srepresentationsandwarrantiesisreviewedbyRadianwhenamortgageinsuranceclaimissubmitted.

Servicing PerformanceC .

FailuretoadheretotheHighestLevelofServicingPerformancemayresultinthedenialorcurtailment of claims.

LinktoClaimCurtailment

Default and Claims Servicing Guide | Claim Eligibility


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Initiation of a Claim6

Whenitbecomesnecessarytofileaclaim,itisimportanttocomplywiththefollowingprocedures.Timely,accurateclaimfilingwillexpeditetheclaimsettlementprocess.RadianstrivestosettleclaimspromptlyandfairlyincompliancewiththetermsoftheagreementsbetweenitanditsInsuredsandinsurancelaws.

Claims FilingA .

Radian’sMasterPolicyprovidestimelinesforbothRadianandtheServicertorequestandsubmitdocuments.RadianexpectsClaimstobefiledwithin60(sixty)daysoftheInsured’sacquisitionofBorrower’sTitle.OncetheClaimfilinghasbeenreceived,Radianwillrequest,within20(twenty)days, the documents necessary to perfect the Claim directly from the Servicer.

When to File1 . a . Primary InsuranceRadianrequeststhatallClaimsbefilednolaterthan60daysaftertitleisobtainedthroughaforeclosuresale.Ifthetitlewasacquiredthroughavoluntaryconveyance,the60-dayperiodbeginswhentheborrowersignsthedeed.

Aclaimmaybefiledpriortotheexpirationoftheredemptionperiod;however:

•Theclaimfilingperiodwillnotbeginuntiltheexpirationoftheredemptionperiod.

•Radianwillnotcoveranyexpensesincurredafterclaimshavebeenfiled.

Supplemental ClaimAsacourtesy,RadianwillprocesssupplementalclaimsforallowableAdvancesandexpensesnotavailableatthetimeofclaimfiling,providedthesupplementalclaimisreceivedwithin60daysoftheoriginalclaimpayment.Pleaseemailsupplementalclaimrequests to [email protected].

b . Pool InsuranceAsaguideline,aclaimistobefiledwithRadiannolaterthan60daysafterclosingonthesaleoftheREOProperty.AcopyofthesettlementstatementfromthesaleoftheREOpropertymustbeincludedwiththeclaim.PleaserefertoSpecialRiskpolicycovering the certificate for the specific claim filing deadline.

c . ExtensionsAnextensionofthe60-dayclaimfilingperiodmayberequested.SubmittherequestinwritingtoRadian’sClaimsDepartmentbeforethe60-dayperiodexpiresat [email protected].

Default and Claims Servicing Guide | Initiation of a Claim

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Claims Filing Format2 . a . Radian’s MI Online

Claims can be filed electronically through MI Online, Radian’s secure self-service Web-basedportal.IfyouhavenotestablishedanaccountwithRadian’sMI Online, visitourwebsiteatwww.radian.biz for registration instructions.

Filing a claim through MI OnlineallowsServicersto:

•Receiveconfirmationofaclaimfiling.

•ReviewClaimStatusforoneormultipleclaims.

•ViewanddownloadanExplanationofBenefits(EOB).

•ReviewandPrintRevisedClaimandOriginalClaim.

•Reviewstatusofdocumentssubmitted.

•Savepartiallysubmittedclaimsforcompletionatalatertime.

b . Additional Options•Industrystandard260transaction.

•Emailnotificationofaclaimfilingviasecureemailtonodreport@radian.biz.

Automated Document Notification3 . Radian’s automated notification system initiates email contact after a claim has been filed. Requestsformissingdocumentationandthestatusofdocumentationreviewaresystemgeneratedand sent via a secure server using the Radian email address [email protected]. The email should include Radian’s Certificate Number and the Servicer’s Loan Number.

Timeline Summary4 .

Servicer Claim Filing 60daysafteracquiringBorrower’sTitle.

Claim Filing Extension Radianwillconsideruponrequestpriorto60daysexpirationperiod.

Radian Request for Documents from the Servicer

Within 20 days of the receipt of Claim filing.

Servicer Response to Radian Document Request

90 days after receipt of Radian’s document request.

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Perfected Claim7

A Claim must be perfected, meaning the filing must include all of the information and proof Radian, in its sole discretion, considers to be reasonably required to evaluate Radian’s liability. Once a claim has beenfiled,Radianwillrequestallrequireddocumentationnecessarytoperfecttheclaimdirectlyfromthe Servicer.

Components of a Perfected ClaimA .

Required Documentation1 . Thefollowingfullyexecuteddocumentationisrequiredpriortoclaimreview:

Incertaincases,Radianmayhaveanagreementwiththeservicer/insuredtorequesttheloan origination and closing documents upon notification that a foreclosure sale has been scheduled.Inthiscase,requiredServicingdocumentswillberequesteduponclaimfiling.

a . Loan Origination Documents include, but are not limited to:•LoanApplication:Fullyexecuted1003—originaland/orfinal.

•Assets—Anyandalldocumentationnecessarytoevidencesufficientfundstomeetdownpayment and reserve requirements, according to the terms of the loan program.

•Income—Anyandalldocumentationnecessarytoevidenceincomefromanacceptablesource in an amount sufficient to meet program ratio requirements.

•Credit—creditreport,tradelinehistories,creditreferencesand/ordocumentationnecessary to evidence indebtedness and satisfy loan program credit history requirements.

•PropertyAppraisal/Valuation—acceptableevidenceofcollateralvaluation.

•PurchaseAgreement,asapplicable—completeandfullyexecutedcontractofsaleincluding all addenda.

•DU,LPorProprietaryAUSFindingsReport,ifapplicable.

•UnderwritingApprovalDocument—toidentifyloanprogramandallapplicableunderwritingandclosingconditions.

b . Closing Documents include, but are not limited to:•FinalHUD-1

•Copyofthemortgagenote–Explanationoftherepaymentfeatureforanymortgageinstrumentotherthanthestandardlevelpaymentamortizingtype,includingthosewithadjustablerates.

c . Servicing documents include, but are not limited to (where applicable):•PaymentHistory;evertodate

•BankruptcyDocumentation,identifydatefiled;datedischarged

•ModificationAgreement;notetheUnpaidPrincipalBalance(UPB),priortothe modification

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•ShortSaleorPostSaleHUD,propertyvalueattimeofsale;ApprovalLetter

•Deed-in-lieu

•ForeclosureInformation/Timeline,intheeventofforeclosuredelay LinktoForeclosureDocumentation

•BPO/Appraisal,asis;repaired

•SheriffsDeed/TrusteeDeed

•CertificateofTitleorSale

•Coverage:Taxinformation/Homeownersinsurance;submitcoveragedates fortaxesandinsurancebeingclaimed

•PrimaryExplanationofBenefits(EOB),HUD-1,poolloans

d . Servicing, Collection and Loss Mitigation Notes•Callrecord•Actiontakenlog•DefaultNotes•CommunicationswithBorrower•FinancialpackagescollectedsubjecttoTreasuryPrograms

Document Submission/Receipt2 . a . Submission

Once a Claim is filed, the Servicer can submit the required documentation through one oftheavenuesidentifiedbelow.ThepreferredmethodisFTP(FileTransmittalProtocol).

•FTP(SFTP,FTPS,orFTPw/PGPEncryption)•[email protected]•CD’s•Paper

LinktoRadian’sMIOnline

b . Document ReceiptUsers of MI Onlinecanaccessthe“DocumentStatus”tabtoviewthestatusofdocument requests. All claim-related documents received by Radian are housed in Radian’s Loss Management document imaging system. Benefits include:

•Receipt,indexandstorageofalldocuments;

•Abilitytoidentifythestatusofclaimfilingsandworkoutefforts;

•Documentlocationtracking.

AtthepointClaimdocumentationisreceived,Radianwillreviewforcompleteness.Thisreviewmakescertainalldocumentationrequestedhasbeenreceivedbutdoesnotreviewdocumentcontent.

AClaimisnotreviewedandevaluateduntilallrequestedinformationhasbeenreceived in its entirety.

c . Documentation Submission TimelineServicershave90(ninety)daystorespondtoanydocumentationrequests.


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Oncesucharequesthasbeenmade,nofurtheractionwillbetakenontheclaimuntilthe requested documents, or acceptable alternative documents, have been received. Subsequentrequestsandupdateswillbesentifthecompletefilehasnotbeenreceivedbythe20th,40thand60thdayaftertheclaimhasbeensubmitted.

d . Missing Documents Claim DenialIntheeventtheclaimsubmissionreachesninetydays,withouttherequireddocumentationbeingreceivedbyRadian,thesystemwillreferthedenialtoaRadianClaimsAnalyst.ServicershavetherighttocureadenialandreinstatetheclaimwithinthetimelimitsimposedbythetermsofRadian’sMasterPolicy. LinktoClaimFiling

Inability to Evaluate a ClaimB .

If apparent defects in the foreclosure process create sufficient uncertainty that Radian cannot reasonablyevaluateaclaim,RadianreservesitsrightundertheapplicablePolicytoclassifytheclaimasunperfectedandtowithholdadecisionontheclaimuntiltheapparentdefectshavebeen finally resolved. If foreclosures are overturned after Claim payments have been made, Radianagainreservesitsrightsandwilladdressissuesonacase-by-casebasis.

Action During the Claim Filing PeriodC .

Eviction of Tenants1 . In some cases, holdover tenants or mortgagors may still be occupying the property after foreclosure sale. In these cases, the lender must start legal proceedings to evict them in accordancewiththerequirementsofstatelaw.

Filing of Claim before Eviction2 . A Claim for Loss may be filed prior to obtaining physical possession of the property.

Sale of REO Property/Duty to CooperateD .

Duringthe60-dayclaim-filingperiod,everyeffortshouldbemadetoselltheproperty.Servicers have an obligation to promptly list the REO and shall include diligent efforts to marketanypropertyoncetheyhaveobtainedREOtitle. See Claim Curtailment

Listing the Property For Sale1 . After obtaining title, the Insured must submit for approval any offer that might be acceptable to Radian.FailuretosubmitanofferforapprovalmayresultinanadjustmentoftheClaimforLoss.

In order to protect its interests, the Insured’s listing agreement should contain a clause precludingpaymentofarealestatesalescommissionifRadianexercisesitsoptionstopurchasethepropertyasmorefullydescribedinConditionTwelve-A,paragraph1ofRadian’sMasterPolicy.

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REO Purchase Offers2 . PrimaryInsuranceAny offer for sale of the insured property must be submitted to the Radian’s REO Administration Department. These submissions can be emailed to [email protected].

LinktoREOApprovalTemplate

PoolInsuranceRadianmustapprovetheREOmarketingplan,includinglistingprice,adjustments,etc.AnymodificationtothemarketingplanmustbeapprovedbyRadian.Submissionsforpoolinsuredloans can be emailed to [email protected]. The final sale must be approved along withverificationofconsistencywiththepriorRadianapprovedREOmarketingplan.

LinktoREOMarketingRequestTemplate





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Claim Review/Evaluation8

ThepurposeoftheClaimreviewprocessistoconfirmClaimeligibilityanddeterminetheamountof Loss incurred as a result of the default.

LinktoClaimEligibility

Review RequirementsA .

•TheServicerhasfiledatimelyandaccurateClaim.•TheClaimisperfected.

LinktoPerfectedClaim

Claim Review TimelineB .

Radian’sreviewoftheClaimmaytakeuptosixty(60)days.Thistimelinemaybeexpandedif a Claims investigation occurs.

Access to the Property1 . Ifrequested,Radianrepresentativesmustbeallowedaccesstothepropertytodeterminethepropertyconditionandvalue.IfRadianseeksaccesstotheproperty,the60-dayperiodwillbesuspendeduntilaccessismadeavailable.

Claims InvestigationC .

AspartoftheClaimreviewprocess,RadianmayperformaforensicauditoftheLoanfilein order to ascertain:

•AdherencetoapplicableeligibilityandunderwritingguidelinesinplaceatthetimetheLoanwasoriginallyinsured.

•AdherencetoLoanServicingRequirementsandPerformanceExpectations.

Investigative Timeline1 . Radianmaytakeuptoa120(onehundredtwenty)daystoconductaClaimsinvestigation.

Duringthisreview,RadianmayrequestadditionaldocumentationandisreliantupontheLender’s timely submission of these documents. A Claim can be denied if the additional documentationrequestedbyRadianisnotreceivedwithin90daysofrequest.

Investigation Process2 . Radian’sreviewandinvestigationoftheLoanfileincludesthefollowingelements:

•Reconfirmationoftheborrower’sinformationincludingphonenumberandaddressprovidedonthe1003.

•Verificationoftheborrower’sincome,assets,employment,occupancyandhistoryof housing payments.

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•ForStatedincomeLoans;determinationofthestatedincome’sreasonablenesswithrespecttotheBorrower’semploymentandjobtitle.

•Reviewofthecollateralincludingareviewoftheoriginalappraisal,aretroactiveAVM,BPO,fieldreviewand/ordrive-byappraisal.

•Reviewofanyassociatedcreditreportstodeterminetheborrower’sdebtsandobligationsat the time of Loan origination/closing.

•Questioningofanydiscrepanciesand/or“redflags”notedwithinthefiledocumentationwhichshouldhavebeenaddressedbytheLenderduringtheoriginalunderwritingprocess.

Radianmayconductaninterviewoftheborrower,contacttheborrower’semployertoconfirmemploymentorincome,reviewbankruptcyfilingsorothercourtdocumentsavailabletothepublic,andreviewanyadditionalpublicinformationsuchasonwebsites,whichmayprovideinformation that is material to Radian’s investigation.

DuringtheinvestigativereviewRadianwillnot:

•Incentorotherwiseencourage,investigatorstodeterminethataLoanwasineligiblefor coverage.

•Incentorotherwiseencourage,investigatorstopressuretheborrowertodiscusstheLoaniftheyareunwillingtodoso.

•UtilizeanexpiredIRSForm4506Ttoconfirmincome.

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Claim Disposition9

AsaresultoftheClaimreviewand/orinvestigationoneofthreeactionsaretaken:

1.) ClaimFulfillment The Claim proceeds for normal processing.

2.) AnIntenttoDenyisIssued. Radian intends to deny the Claim because it is not eligible and/or crucial documents requested aspartofthereview/investigationhavenotbeensubmittedinatimelymanner(90days).

a. Appeal of an Intent to DenyServicershavetheremainderoftheClaimfilingperiod,or30days,whicheverisgreater,toresubmittheirClaimwiththeproperdocumentationand/orsupportinginformationafteranIntenttoDenyisissued.Radianwillcontinuetoacceptdocumentsduringthistime,andwillretractapreviousIntenttoDenyandperformare-evaluationiftherequesteddocumentsarereceivedwithinthistimeline.Allappealsaretoberemittedthrough [email protected].

LinktoClaimFilingPeriod

3.) AnIntenttoRescindCoverageisIssued. IftheClaiminvestigationrevealsinaccuraciesintheapplicationforinsurance,underwriternegligence,orotherdeficienciesintheunderwritingprocess,Radianmayconcludethatrescissionofcoverageiswarranted.IntheeventRadiandeterminesarescissioniswarranted,a letter of Intent-to-Rescind is sent to the lender providing a description of the facts supporting the decision.

TheIntent-to-Rescindletterprovidesaperiodoftime(usually60days)forarebuttalresponseprior to the rescission being finalized.

LinktoAppealofRescission

Factors in RescissionsA .

RadianwillestablishagoodfaithbeliefthattheInsuredortheInsuredagent(s)participatedin,wereawareof,or,intheexerciseofreasonablediligence,shouldhavebeenawareof,thedeficienciesuponwhichrescissionofthemortgageinsurancecoverageisbased.RadiandoesnotshifttheburdentotheLendertoproveabsenceoffraud.Missingdocumentation,onitsown,generallywillnotwarrantrescissioniftheinformationisnotdeemedmaterial,anddoesnotpreventRadianfromassessingtheoverallriskthatwasinsured.

Belowaregeneralevaluationguidelines.Thislistisnotcomprehensiveandisforillustrativepurposes.Manyofthesefactorswillnot,ontheirown,warrantrescissionaction.However,ifmultiplefactorswarrantingrescissionalsoarepresent,Radianwilltakethis“layering”ofadditionalfactorsintoaccount.IfaLenderrebutsRadian’sdecisionwithinformationwithinthevariancethresholdbutoutsidetheunderwritingoreligibilityguidelinesfortheLoan,therescissiondecisionwillnotbeoverturned.

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Value•Aninflateddiscrepancyintheappraisedvalueby≥20%oftheamountstatedin

the application for insurance.

Debt-to-Income Ratio•Arecalculateddebt-to-incomeratiowhichis≥5%aboveallowableguidelines.•Undiscloseddebt≥5%aboveallowableguidelines.

Assets•Theamountofassetsverifiedisshort≥$500forfundstocloseand/or≥$1,000for

reserve funds. •MaterialmisrepresentationofVerificationofDeposit(s)whendiscoveredwillwarrant rescission.Visiblyalteredassetdocumentationsuchasabankstatementwillbeconsiderednegligencebytheunderwriter.

Occupancy•ForOwnerOccupiedoriginatedLoanstheburdenfallstoRadiantoprovethat theborrowerneveroccupied.

Appeal of RescissionB .

The Servicer has the option to appeal a rescission decision by submitting a rebuttal to Radian’s Dispute Resolution group at siurebuttals@radian.biz.TheappealreviewmayincorporatemanyofthesametechniquesutilizedduringtheClaiminvestigation,suchasborrower/employerinterviewsandreviewofpublicrecords.IfRadian’sDisputeResolutiongroupagreeswiththelender’sposition, or if the lender provides additional information sufficient to alter the original decision, coveragewillcontinueorbereinstatedandtheclaimwillresumeonanormalcoursetowardspayment.Iftheappealdoesnotsupportthelender’sposition,thelenderwillreceiveacomprehensiveletterofdeterminationexplainingthebasisforthedenialoftheappeal.Intheevent Radian reinstates a rescinded Certificate and honors the claim, the final claim payment willbeadjustedtoreflectanypremiumrefundcheckthatmayhavebeendisbursed.

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Claim Settlement10

RadianstrivestopayClaimsinafairandpromptmanner.UnderRadian’sMasterPolicyofInsurance,andvariousstructuredPoolPolicies,Radianhasseveraloptionsincalculatingitsliability.

Timing of Claim SettlementA .

Radianwillpayaclaimwithin60daysafterallrequireddocumentationissubmitted,subjecttothefollowingconditionsandrequirements:

Additional Documentation1 . Radianmayrequestadditionaldocumentationwithin20daysofthefilingdateoftheinitialclaim.UntilRadianreceivestheadditionaldocumentation,the60-daytimeperiodforclaimpaymentwillbesuspended.

Access2 . IfRadianseeksaccesstotheproperty,the60-dayperiodwillbesuspendeduntilaccessis made available.

Acquisition3 . IfRadianelectstoacquiretheproperty,the60-dayperiodshallbeextendedinsofarasnecessary for there to be 10 days remaining after the insured tenders Merchantable Title to Radian.

SIU and Default Servicing Investigations4 . If the claim is chosen for a quality assurance compliance audit relating to loan origination and/ordefaultservicing,thetimelineforpaymentoftheclaimshallbeextendedbyanadditional 120 days from the date of perfection.

Late Payment5 . IfRadiandoesnotpaytheclaimwithin60days,subjecttotheaboveconditions,simpleinterestwillbepaidatthenoterateaccruingfromthesettlementduedate.SimpleInterestislimitedtothoseclaimscoveredundertheMasterPolicy,andthoseselectPoolPoliciesthat refer to the payment of Simple Interest.

Timing of Claim Settlement Under Structured Pool PoliciesB .

The Insured should refer to its applicable policy for terms on claim settlement under structured PoolPolicies.Questionsonstatusandtermsmaybedirectedtocustomer.care@radian.biz.

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Calculation of Claim LiabilityC .

Explanation of Benefits (EOB)1 . AnExplanationofBenefits(EOB)isprovidedbyRadiantotheServicer/InsuredforeachClaim paid, and is available via MI Online.

TheEOBprovidesacategorizeditemizationofaclaimpayment.IftheclaimwasfiledviaEDI260orviaRadian’sMI Onlineapplication,theEOBwillbeinaside-by-side(Submittedvs.Authorized)formatdetailingthelossesrequestedintheInsured’sclaim,comparedtotheamount for each loss authorized by Radian.

Ifthepolicyincludesadeferredpremium,orifanypremiumisowedtoRadian,includingpremium on principal forgiveness or premium sent to servicers on over turned rescissions, thefinalclaimpaymentwillbenetoftheoutstandingdeferredpremiumamount.

Claims Adjustments2 . a . The following advances are allowed to be included in a Claim calculation:

•Hazardinsurancepremiumspaidafterdefault,pro-ratedto60daysafterforeclosure.

•Realestatetaxesaccruedorpayableafterdefaultandpriortoforeclosure,pro-ratedto60daysafterforeclosure.

•Reasonableandnormaldisbursementsincurredinforeclosure(attorneyfeesarelimitedto3%ofUPBandinterest).

•Reasonableandnormalpropertypreservationexpensesincurredafterdefaultand60daysfromforeclosure.

•Reasonableandnormalevictionexpenses(cashforkeysislimitedto$1,500withoutpriorapproval).

•Condominiumfeesaccruedwillbepro-ratedfromthelastpaidinstallmentto60daysafter foreclosure sale.

•Ifapropertyissubjecttoaredemption/confirmationperiod,advanceswillbepro-ratedtothedateoftheclaimor60daysafterredemption/confirmation,whichevercomesfirst.

b . The following advances are not allowed to be included in a Claim calculation:

•Insurancepremiumsandrealestatetaxesaccruedandpayablepriortodefaultandafter60daysfromtheforeclosuresale.

•Propertypreservationexpensespriortodefaultandafter60daysofforeclosure.

•Tripcharges.

•MIpremiums.

•Penaltiesandinterestowedonpastduetaxes,condominiumfees,andmunicipalcharges.

•Non-approvedchangestothetermsonanapprovedsaleresultinginanunreasonablereduction in net proceeds.

c . Other Claim Calculation Rules/Adjustments:

•Interestiscalculatedtoamaximumof60daysafterthelenderhasacquiredtitletotheproperty,nottoexceedtwoyearsfromthedefaultdateaspertheMasterPolicy.

•Onshortsales,interestiscappedtodateofshortsale.

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•Onpoolpoliciesandinfluencesales,interestiscappedtodateofsaleoftheproperty.

•Onthirdpartysales,interestiscalculatedtodateofsettlementonthirdpartysale;ifsettlementdateisnotavailable,interestwillbecalculatedonforeclosuresale.

d . Rents Received

Rents received before and after foreclosure mitigate loss for all parties, and therefore shall be deducted from any Claim for Loss filed.

Return of Paid Claim Funds3 . Ifforanyreasonapropertyisrevertedbacktothehomeownerafteraclaimhasbeenpaid(invalidforeclosure,post-foreclosurelossmitigation),itisexpectedthattheservicer/insuredwillreturntheclaimfundstoRadianinorderforthecoveragereinstatementprocesstobegin.

Claim Curtailment4 . Radian’sMasterPolicyestablishesservicingperformancestandardsofRadianinsuredloans.

LinktoHighestStandardofServicingPerformance

When a servicer fails to service a loan insured by Radian in a reasonable and prudent mannerandconsistentwiththehigheststandardsofservicinginuseintheresidentialmortgageindustryasrequiredbythetermsofRadian’sMasterPolicy,RadianmayadjustthelosstoreflecttheharmithassufferedintheformofincreasedLossorriskofloss.IdentifieddeviationsfromservicingbestpracticesareexaminedinordertodeterminewhethertheyresultedinharmtoRadianintheformofanincreasedriskoflossormissedopportunity to mitigate loss. If it is determined that an identified deficiency did not result in harm, it does not result in a curtailment.

OnlyinthoseinstanceswhereRadiancanreasonablycalculatetheamountbywhichthedeficiencyinservicingincreasedtheLossascalculatedunderthepolicyisitrequiredtoadjustlosses. In all other cases Radian has the contractual right to deny coverage for the entire loss. Ratherthandenyclaimsforwhichdeficientservicinghasbeenidentified,butforwhichtheresultantlosscan’tbecalculatedwitharithmeticcertainty,Radianmakeseveryefforttoaccuratelyestimatetheharmithassufferedintheformofincreasedliabilityexposureorlossofopportunitytomitigateorabrogateloss.Insomeinstances,however,deficienciesmaybeso egregious as to require denial of the entire claim.

a . Appeal of CurtailmentServicers can appeal a curtailment decision by submitting a rebuttal to Radian’s Dispute Resolution Group at [email protected].

CurtailmentdecisionsarebaseduponRadian’sreviewofservicingnotesandrelateddocuments provided to Radian by the Insured at the outset of the claim process. Generally, if a required servicing activity is not documented it is deemed not to have occurred. If it is determined that there are missing notes or additional information not previouslyprovidedtoRadianwhichdocumentactivity,suchadditionalinformationwillbeconsideredonappealsubjecttotheLimitationsofActionsclauseandothertimeconstraintswithintheMasterPolicy.

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Default and Claims Servicing Guide | Radian Default and Claims Contact Information

Radian Default and Claims Contact Information

Default Reporting

[email protected]

Claims

General inquiries/status: [email protected]

Claims documents: [email protected]

Appeals/Rebuttal

[email protected]

Loss Mitigation

Todiscussnon-delegatedloanretentionworkoutsandliquidationoptions, please contact your dedicated Loan Specialist.

REO Acquisitions

PrimaryInsuredLoans:[email protected]

PoolInsureLoans:[email protected]

Glossary

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Default and Claims Servicing Guide | Glossary

Deed-in-lieu of Foreclosure Atransactionwheretheborrowervoluntarilyconveystitletothemortgageelender as an alternative to foreclosure. Any Deed-in-Lieu transactions involving a releaseoftheBorrower(s)fromliabilityundertheLoanrequireRadianapproval.

Default ThefailureoftheBorrowertopaywhendueanamountequaltoorgreaterthanone(1)monthlyregularperiodicpaymentinaccordancewiththeterms of a Loan.

Deficiency AllamountsdueandowingunderaLoanonwhichaDefaulthasoccurred,andremainingaftertheconclusionofAppropriateProceedings,pursuanttoapplicablestatelaw.

Denial of Coverage The cancellation of coverage as of a date after issuance of the Certificate of InsuranceresultingfromexclusionsintheapplicablePolicyofinsurance,servicererrorornon-complianceofthetermsofservicing.(Premiumsarenotrefunded,orrefundedonlyofthosecollectedafterthedateofnon-compliance).

Early Default ThefailureoftheBorrowertomakeanyoftheinitialtwelve(12)monthlypaymentsinaccordancewiththetermsofaLoansothatsumsequaltotheaggregateoftwo(2)suchmonthlypaymentshavenotbeenpaidwhendue.

Early Payment Default Occurswhentheborrowerfailstomakeanyoftheinitial12monthlypayments,theloan.Whenanearlydefaultoccurs,aNoticeofDefault(NOD)mustbereportedtoRadianwithin15daysafterthesecondpaymentisdue.

Early Stage Default DefaultsinsomestagebetweenReferraltoAttorneydateandtheForeclosureScheduledDate—atime-lapsethatvariesonastatebystatebasis(i.e.,inAlabama3monthstimelapseisallowedbetweenthetwodateswhereasinMaine,10monthstimelapseisallowedbetweenthetwo).

Effective Date With respect to an insured Loan, the effective date of mortgage insurance coverage—generallytheclosingdateofsuchLoan,or,suchlaterdateasmayberequestedbytheInsuredandapprovedinwritingbyRadian.

EOB (Explanation of Benefits) AcategorizedbreakoutofaClaimpaymentcontainedinaside-by-sideformatdetailing the losses requested in the Insured’s Claim, compared to the amount for each loss authorized by Radian. An EOB is provided by Radian to the Servicer/Insured for each Claim paid.

Fair Market Value WithregardtotheamountbidforanyPropertyataforeclosuresale,theProperty’svalueattheapproximatetimeoftheforeclosuresaleasdeterminedbyappraisal,ifavailable,orinaccordancewithcustomaryservicingpractices(whichmayincluderelianceoninformationprovidedbyalocalrealestatebroker),subjecttoapplicablelawgoverningforeclosure.

Forbearance Plan A forbearance provides a temporary reduction or suspension of payments on amortgageloan;anditistypicallyincorporatedinapaymentarrangementtocureanydelinquentpaymentaftertheunderlyinghardshiphasgoneaway.

Foreclosure Bid Price Foreclosure bid price typically reflects the minimum bid acceptable to the lender and normally includes the loan balance, all accrued interest, plus attorney’s fees andanycostsassociationwiththeforeclosureprocess.Thefinaldeterminateforforeclosure bid price is dependent on regulatory requirements and/or investor bidding instructions/guidelines.

HAFA HomeAffordableForeclosureAlternativesisafederalprogramwhereaparticipatingmortgagelender/servicerauthorizetheborrowertoselltheproperty(shortsale)forapre-approvedamounttoavoidforeclosure.ADeed-in-lieu of foreclosure may also be an option if selling the property is not viable. The federal government provides monetary incentives to the mortgage servicerandtheborrowertoparticipateintheprogram.


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HAMP The HomeAffordableModificationProgram is designed to help financially strugglinghomeownersavoidforeclosurebymodifyingloanstoalevelthatisaffordableforborrowersnowandsustainableoverthelongterm.Theprogram provides clear and consistent loan modification guidelines that the entiremortgageindustrycanuse.Borrowereligibilityisbasedonmeetingspecificcriteriaincluding:(1)borrowerisdelinquentontheirmortgageorfacesimminentriskofdefault;(2)propertyisoccupiedasborrower’sprimaryresidence;(3)mortgagewasoriginatedonorbeforeJanuary1,2009andunpaidprincipalbalance must be no greater than $729,750 for one-unit properties. After determiningaborrower’seligibility,aservicerwilltakeaseriesofstepstoadjustthemonthlymortgagepaymentto31%ofaborrower’stotalpretaxmonthlyincome:First,reducetheinterestratetoaslowas2%,Next,ifnecessary,extendtheloantermto40years,Finally,ifnecessary,forbear(defer)aportionoftheprincipaluntiltheloanispaidoffandwaiveinterestonthedeferredamount.(Note:ServicersmayelecttoforgiveprincipalunderHAMPonastand-alonebasis or before any modification step in order to achieve the target monthly mortgagepayment)

HNC (Handle Normal Course)

HandleNormalCourse.TermusedtodescribeaClaimthatisbeingprocessedinaccordancewithRadian’sguidelinesandprocesses,subjecttodenialoradjustmentbaseduponRadian’srightsandprivilegesundertheapplicablePolicyofinsurance

Imminent Default JudgmentmadebytheServicerwhenaborrowerthatisnotyetindefaultisfacedwithcircumstancesthatmakedefaultalikelyoccurrence.

Insured ThenamedInsuredoranyparty:(1)towhomcoveragehasbeengrantedbyRadian;or(2)thatisasubsequentassigneeortransfereeownerofaLoanthathasrequestedtobecometheinsured.Ifhowever,Radianhasnotbeennotifiedinwritingofsuchassignmentortransfer,ortheapplicablePolicydoesnotallowtransferoftheLoan,Radian’ssoleobligationhereundershallbetothe named Insured.

Late Stage Default Defaultswhereaforeclosuresalehasbeenheldorscheduledorthepropertyassociatedwiththeloanhasbeensoldorlisted.

Liquidating Workout AtransactionthatresultsinaneliminationoftheLoan.Workouttypesincludeshortsales, deeds-in-lieu of foreclosure and short refinances. A LiquidatingWorkout willgenerallyrequireRadianapprovalinordertobethebasisforfilingaClaimundertheapplicablePolicyofmortgageinsurance.

Loan TheindebtednessoftheBorrowertotheInsuredintheamountandforthetermspecifiedonthefaceoftheCertificateofInsurance,whichisevidencedbyawrittenobligationandsecuredbyamortgage,deedoftrustorotherinstrument,whichisafirstlienorchargeontheProperty,andwhichisinsuredundertheMasterPolicyorotherapplicablePolicyorintendedtobeinsuredinaccordancewiththetermsofaCommitmentofInsurance.

Loan Modification Represents a change in the terms of a mortgage contract to incorporate past-due amountsandreducemonthlypayment,extendterm,reduceinterestrateoranycombination thereof. A recorded loan modification is a legal change to the terms of the loan and involves obtaining approval from the lender or investor and mortgage insurer.

Loss The amount of loss suffered or incurred by the Insured determined pursuant to the provisions of Condition ElevenoftheMasterPolicy.Ingeneral,theLossforprimarymortgageinsurancecoveragewillnotincludetheproceedsofthesaleoftheREO,whereas,theLossforPoolmortgageinsurancecoveragewillincludea credit for the net proceeds of the sale of the REO.

MDR (Monthly Delinquency Report)

Monthly report produced and provided to the lender each month until the loan cures, pays off, or a claim is filed.

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Default and Claims Servicing Guide | Glossary

Merchantable Title TitletothePropertywhichisreadilysalableandfreelytransferable,andwhichisfreeandclearofallliens,defectsandencumbrancesincluding,withoutlimitation,rightsofpartiesinpossessionandrightsofredemption(unless,ineitherorbothcases,RadianwaivesinwritingitsrighttotakethePropertyfreeofsuchrights),exceptingonly:(1)Thelienofcurrentgeneralrealestatetaxesandotherpublicchargesandassessmentsnotyetdueandpayable;(2)Easementsforpublicutilities,buildingrestrictionsandtheeffectofbuildinglawsorregulationswithwhichtheimprovementsonthePropertycomply,whichdonotimpairtheuseofthePropertyandtheimprovementsthereonfortheirintendedpurposes;(3)TenantsunderleasesapprovedinwritingbyRadian;and(4)SuchminorimperfectionsoftitleaswouldnotimpairtheuseandenjoymentofthePropertyasaresidence.MerchantableTitledoesnotexistifthereisalienonthePropertypursuanttofederalorstatelawprovidingforliensinconnectionwiththecleanupof environmental conditions, or if notice has been given of commencement of proceedingswhichcouldresultinsuchalien.

Modified Pool Insurance AcustomizedversionofPoolinsurance,ModifiedPool coverage provides coverage to reimburse a lender from its bottom-line loss after the sale of the REO withaperLoanlevellosslimitbaseduponadesignatedpercentageofcoverageset forth in the ModifiedPool policy.

Negative Equity (Underwater) AsituationwherethevalueofthepropertyusedassecurityonthemortgageLoan is less than the outstanding balance on the loan. Negative Equity loans arealsoknownasbeing“underwater”or“upsidedown.”

NOD (Notice of Default) Notification provided by a Servicer to the mortgage insurer advising that the borrower(s)hasnotmadetheirpaymentsasscheduledandarecurrentlyindefaultstatus(60dayspastdue).TheServicerisrequiredtoupdatetheinsurerof the Loan status monthly until the loan has either cured or gone to a Claim.

Partial Reinstatement APartialReinstatementisapaymenttransactionwhereintheBorrower(s)pays a portion of the Loan arrears and agrees to a repayment plan for the balanceowed.

Perfected Claim A Claim containing all of the information and proof reasonably required by Radiantoevaluateitsliabilitywithrespectthereto.

Physical Damage AnytangibleinjurytotheProperty,whethercausedbyaccident,naturaloccurrenceorotherwise,excludingnormalwearandtear.

Pool Insurance Mortgageinsurancethatinsuresmultiplemortgages(ofteninasecuritization)ina single transaction. Radian insures the individual Loans in a mortgage portfolio uptoaspecificlevelofcoverage.PoolinsurancemanytimesisdesignedtoinsurespecificlayersofriskthroughtheuseofPolicydeductiblesandAggregateLossLimits(stoplosses)—whichrequiretheInsuredtobeartheriskoflossuptoacertain dollar amount and also capping Radian’s liability at a specific dollar limit. UnlikePrimarycoverage,PoolcoverageinsuresagainsttheInsured’sultimatebottom line loss after the sale of the REO property.

Pre-Foreclosure (Short) Sale Asaletransactionwheretheproceedsarenotsufficienttosatisfytheoutstandingmortgagebalance.SinceallPoliciesrequiretheacquisitionofBorrower’sTitle(and/orsaleoftheREO)inordertotriggeraClaim,RadianapprovalofanyPre-ForeclosureSaleisaconditionprecedenttofilinganyClaimwhereaShort Sale has occurred.

Primary Mortgage Insurance Mortgageinsurancethatiswrittenonanindividualloanbasis.Alsoknownas“flowbusiness,”thisoptionispricedandappliedonaper-Loanbasis.Radianprovides coverage by agreeing to pay the Insured a certain percentage of its LosswhenaBorrowerdefaults.


Radian

Default and

Claims Servicing

Guide

45 Default and Claims Servicing Guide | Glossary

Property The residential real property, designed for occupancy by not more than four(4)families,identifiedonthefaceofaCertificateofInsurance,andshallincludeallappurtenances,rightsofaccessandimprovementsthereonwhichsecure the Loan.

REO (Real Estate Owned) PropertythatalenderhastakentitletothroughAppropriateProceedingsofaDeed-in-Lieu.TitletotheREOispassedRadianifitexercisesitsrighttopaythefullclaimandtaketitle.

Repayment Plan Representsapaymentarrangementplanbasedonaborrower’sfinancialsituationtospreadoutrepaymentofapast-duebalanceoveranextendedperiod of time. A repayment plan does not change the original terms of the Loan.

Rescission of Coverage The cancellation of the Certificate of Insurance evidencing coverage, effective as ofitsinception,duetoanuninsurableriskexistingfromthedateoftheissuanceofsuchCertificate,identifiedduringthecourseofaudit(premiumscollectedonthecertificatearefullyrefunded).

Reserves Those liabilities an insurance company is legally required to maintain on its balancesheetwithrespecttotheexpectedfutureclaimpaymentsofthecompany.

Retention Workout Atransactionthatresultsinthecureofadefaultwiththeborrowermaintainingownershipoftheirhome.Aretentionworkoutmaybeeitherarepaymentplan(withorwithoutforbearance)oraloanmodificationandresultsintheborrowerretaining their property. Barring a subsequent default on the Loan, a Retention WorkoutwillnotresultinaClaimunderanyPolicy.

Seasoned-Payment Default Occurswhenaloanentersdefaultafterthefirstyearoftimelyloanpayments.A Notice of Default(NOD)mustbereportedtoRadianforanyloanthatisduefor three months or more. This must be done no later than 15 days after the third payment is due.

Serial Fraud Agroupofinvestigationswithsimilarcharacteristics,reviewedasalargescaleinvestigation based on associated data.

Servicer The entity servicing a Loan on behalf of the Insured. The Servicer is deemed to betherepresentativeoftheInsuredforpurposesoftheMasterPolicyandanyapplicablePolicyunderaSpecialRiskagreement.

Settlement Due Date Thedatesixty(60)daysafterreceiptofaClaimbyRadian,subjecttotheextensionsoftimesetforthinCondition ThirteenoftheMasterPolicy.

Stipulation Agreement A Stipulation Agreementisapostforeclosureinitiatedagreementwhichtermsrequiretheborrowertowaivealldefensestoaforeclosureactionandfortheborrowertomakeacertainnumberofpayments,inordertobeconsideredfora loan modification or to reinstate the mortgage.

Supplemental Claim AClaimfiledbytheInsuredwhichincludeslossesnotavailableatthetimeoffiling of the initial Claim. A Supplemental ClaimwillbehonoredbyRadianifitcontainslossesinexcessof$25.00andifitisfiledwithin60daysofpaymentof the original Claim, a Supplemental Claim is not mandated under Radian’s policies of insurance.

Third-Party Misrepresentation or Fraud

A misrepresentation or fraud by anyone other than the Insured, its employees or agents. For purposes of this definition, the Insured’s agents shall include any mortgagebrokerand/orintermediaryoriginatingtheLoan,oranyoneundercontractwithsuchpersonsinconnectionwiththeoriginationoftheLoan,suchasanappraiserorescrowagent.

UPB (Unpaid Balance) The total unpaid principal balance of a mortgage or note. This term may or may not include capitalized interest depending on applicable regulatory requirements.

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Radian Guaranty Inc.

1601MarketStreetPhiladelphia,Pennsylvania19103-2337

800.523.1988215.231.1000