Default and Claims Servicing Guide
Radian Default and Claims Servicing Guide
Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . 3
G. Eminent Domain or Condemnation . . . . . 8 H. Notifying Taxing Authorities . . . . . . . . . . 8
I. Reporting Delinquent Mortgages . . . . . 4 A. Reporting Requirements . . . . . . . . . . . . . 4 III. Sub-Prime Loan Servicing . . . . . . . . . . 9 (1) Early-Payment Defaults . . . . . . . . . . . 4 (2) Seasoned-Payment Defaults . . . . . . . 4 IV. Loan Workouts . . . . . . . . . . . . . . . . . . 10 (3) Current Loans “In Jeopardy” . . . . . . . . 4 A. Loan Workout Theory . . . . . . . . . . . . . . . 10 B. Format of Default Notices . . . . . . . . . . . . 4 (1) Loan Workout Specialist . . . . . . . . . . 10 (1) Pre-Printed Forms . . . . . . . . . . . . . . . . 4 (2) Early Intervention . . . . . . . . . . . . . . . 10 (2) Electronic File Transmission . . . . . . . . 4 (3) Asset Value . . . . . . . . . . . . . . . . . . . . 11 (3) Tape-to-Tape Reporting . . . . . . . . . . . . 5 (4) Borrower Contact . . . . . . . . . . . . . . . . 11 C. Monthly Reporting Requirements . . . . . . 5 B. Types of Workout Plans . . . . . . . . . . . . . 11 (1) Monthly Delinquency Report (MDR) . . 5 (1) Repayment/Forbearance Plan . . . . . . 11 (2) Monthly Electronic File Transmission (2) Partial Reinstatements . . . . . . . . . . . 12 or Tape-to-Tape Reporting . . . . . . . . . . 5 (3) Stipulation Agreement . . . . . . . . . . . 12 (4) Life Line Loan . . . . . . . . . . . . . . . . . . 12 II. Delinquent Loan Servicing . . . . . . . . . . 5 (5) Modification . . . . . . . . . . . . . . . . . . . 13 A. Contact the Borrower . . . . . . . . . . . . . . . 6 (6) Pre-Foreclosure Sale . . . . . . . . . . . . . 14 (1) Exhaust all Efforts . . . . . . . . . . . . . . . 6 (7) Assumption . . . . . . . . . . . . . . . . . . . . 15 (2) Obtaining Reason for Default . . . . . . . 6 (8) Deed-In-Lieu of Foreclosure (DIL)/ (3) Report Reason for Default . . . . . . . . . 6 Voluntary Conveyance . . . . . . . . . . . . 16 B. Non-Owner Occupied Property . . . . . . . . 6 (9) Note Purchase . . . . . . . . . . . . . . . . . 16 (1) Obtain Rental Income . . . . . . . . . . . . . 6 C. Loans in Jeopardy . . . . . . . . . . . . . . . . . 16 (2) Notify Borrower at Mailing Address . . 6 D. Bankruptcy and Workouts . . . . . . . . . . . 17 (3) Consider Pre-Sale to Tenant . . . . . . . . 6 E. Financial Forms/Documentation . . . . . . 17 C. Credit Reporting . . . . . . . . . . . . . . . . . . . 6 F. Deficiency Judgments . . . . . . . . . . . . . . 18 D. Foreclosure Proceedings . . . . . . . . . . . . . 7 (1) When to Begin Foreclosure . . . . . . . . . 7 V. Claims Procedures . . . . . . . . . . . . . . . 18 (2) Diligent Pursuit of Foreclosure . . . . . . 7 A. Claims Filing . . . . . . . . . . . . . . . . . . . . . 19 (3) Foreclosure Documents . . . . . . . . . . . 7 (1) When to File . . . . . . . . . . . . . . . . . . . 19 (4) Foreclosure Bid Price . . . . . . . . . . . . . 7 (2) Voluntary Conveyance . . . . . . . . . . . . 19 E. Bankruptcies . . . . . . . . . . . . . . . . . . . . . . 8 (3) Prior to Expiration of (1) Notification of Radian . . . . . . . . . . . . 8 Redemption Period . . . . . . . . . . . . . . 19 (2) Relief of Automatic Stay . . . . . . . . . . . 8 (4) Extensions . . . . . . . . . . . . . . . . . . . . 19 F. Appointment of Receiver . . . . . . . . . . . . . 8 B. Access to the Property . . . . . . . . . . . . . . 19
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Default and Claims Servicing Guide | Table of Contents
Radian Default and Claims Servicing Guide
C. Eviction of Tenants . . . . . . . . . . . . . . . . . 19 Appendix I – Forms . . . . . . . . . . . . . . . . . . 23 (1) Filing of Claim Before Eviction . . . . . . 19 A. Notice of Default (NOD) . . . . . . . . . . . . . 24 (2) Rents Received . . . . . . . . . . . . . . . . . 19 B. Monthly Delinquency Report (MDR) . . . . 25 D. Sale of REO Property . . . . . . . . . . . . . . . 20 C. Claim for Loss . . . . . . . . . . . . . . . . . . . . 26 (1) Listing the Property For Sale . . . . . . . 20 D. Delegated Pre-Foreclosure (2) REO Purchase Offers . . . . . . . . . . . . . 20 Sale Notice . . . . . . . . . . . . . . . . . . . . . . 28 E. Delegated Loan Modification Notice . . . . 30 VI. Components for a Claim for Loss . . . . 20 A. Documents Needed for a Appendix II – Exhibits . . . . . . . . . . . . . . . . 32 Complete Claim for Loss . . . . . . . . . . . . 20 A. Foreclosure Bidding Instructions . . . . . . 33 B. Alternative Mortgage Forms . . . . . . . . . 20 B. Promissory Note . . . . . . . . . . . . . . . . . . 34 VII. Limitation of Coverage . . . . . . . . . . . . 20 VIII. Exclusions from Coverage . . . . . . . . . . 21 IX. Claim Settlement . . . . . . . . . . . . . . . . 22 A. Timing of Claim Settlement . . . . . . . . . . 22 (1) Additional Documentation . . . . . . . . 22 (2) Access . . . . . . . . . . . . . . . . . . . . . . . 22 (3) Acquisition . . . . . . . . . . . . . . . . . . . . 22 (4) Late Payment . . . . . . . . . . . . . . . . . . 22
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Radian Default and Claims Servicing Guide
Default, Claim and Loan Workout Procedures and Guidelines
Introduction
Radian’s Default Servicing Guide outlines standard procedures for servicing Radian-insured first lien mortgage loans. These simplified procedures provide flexibility and ease of compliance for our customers, while ensuring sound servicing practices. Adherence to these procedures enables Radian to provide excellent quality default and claim servicing for you, our customer. The following information is intended only as a general guide for servicing delinquent Radian-insured loans. These guidelines may be amended from time to time in order to meet the changing needs of the mortgage servicing industry. Please refer to the appropriate provisions of the Master Policy of Insurance for a definitive explanation of the lender’s and Radian’s respective rights and responsibilities. Capitalized terms are defined in Condition One of the Master Policy. Radian’s Claims Department is available at 877 723.4261 to help you with any servicing questions.
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I. Reporting Delinquent Mortgages
Timely and accurate reporting of delinquent mortgages is essential for effective default servicing and is also a condition precedent for a claim payment under the Radian Master Policy of Insurance.
A. Reporting Requirements (1) Early-Payment Defaults
If the borrower fails to make any of the initial 12 monthly payments, the loan is deemed an early default. When an early default occurs, a Notice of Default (NOD) must be reported to Radian within 15 days after the second payment is due.
(2) Seasoned-Payment Defaults
After the loan pays for one year, a NOD must be reported to Radian for any loan that is due for three months. This must be done no later than 15 days after the third payment is due.
(3) Current Loans “In Jeopardy”
While filing a NOD is not a requirement, Radian encourages NODs on current loans if it is believed that the loan is in immediate jeopardy of going into default. This should be done only after a careful review of the facts and circumstances surrounding the case.
B. Format of Default Notices
Defaults may be reported by submitting either a manually completed NOD form, electronic file transmission or via computer tape.
(1) Pre-Printed Forms
Radian recommends using a Radian NOD form to be certain that all important information is provided. A sample can be found in the form appendix of this guide. Radian will also accept the generic NOD form approved by the Mortgage Insurance Companies of America (MICA) and the Mortgage Bankers Association (MBA).
(2) Electronic File Transmission
Radian will accept NODs and Monthly Delinquency Reports (MDR) via electronic file transmission in the same MBA standard format as tape-to-tape reporting. For specific instructions for electronic file transmissions, please contact Radian’s Claims Department at 877 723.4261, ext. 3018.
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(3) Tape-to-Tape Reporting
Radian will accept NODs and MDRs via computer tape. For specific instructions before choosing this option, please call Radian’s Claims Department at 877 723.4261, ext. 3018.
C. Monthly Reporting Requirements
Radian must be kept informed of the status of the loan on a monthly basis. This status report should include, but is not limited to, the due date, specific reason for default, any contact efforts, and the specific results of any borrower contact. These monthly reports must continue until it has been reported that: (a) the borrower is no longer in default, (b) the proceedings have terminated or (c) the claim has been paid. As in the case of the NOD, the monthly updates may be reported via electronic file transmission, computer tape or by an individual report sent to Radian.
(1) Monthly Delinquency Report (MDR)
Once a NOD is submitted, Radian will send an MDR to the lender each month until the loan cures, pays off, or a claim is paid. The completed form should then be returned to Radian’s corporate Claims Department. A sample MDR can be found in the form appendix in this guide.
(2) Monthly Electronic File Transmission or Tape-to-Tape Reporting
If prior arrangements have been made with Radian to report loans in default by electronic file transmission or using a computer tape, Radian will not send MDRs to the lender. The lender will send an electronic file or computer tape each month to Radian’s corporate Claims Department. This electronic file or tape must include a status report on any Radian loan that has previously been reported in default until it has been reported that: (a) the borrower is no longer in default, (b) the proceedings have terminated or (c) the claim has been paid. This tape must be received by Radian no later than the 21st day of each month. For specific instructions before choosing this option, please call Radian’s Claims Department at 877 723.4261, ext. 3200.
II. Delinquent Loan Servicing
Communication with the borrower is of primary importance in servicing delinquent loans. Once contact with a borrower is established, the borrower’s specific reason for default needs to be determined. This is critical in deciding whether an alternative to foreclosure is feasible.
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A. Contact the Borrower (1) Exhaust All Efforts
Make every effort to contact the borrower before sending the loan to an attorney to begin foreclosure proceedings. Federal law requires that borrower counseling be offered. Be sure the borrower understands the consequences of failure to pay, including liability for a deficiency judgment, if applicable.
(2) Obtaining Reason for Default
During the initial contact with the borrower, a detailed description of the reason for default should be requested. The borrower should then be asked when they intend to make the delinquent payments.
(3) Report Reason for Default
Indicate the reason(s) for the borrower’s default on Radian’s NOD form or MDR.
B. Non-Owner Occupied Property
When the security for the loan is an investment property or the property has been converted to rental property, additional servicing steps must be taken. As stated more specifically below, the necessary steps must be taken to obtain the rental income. The borrower should also receive the proper collection notices.
(1) Obtain Rental Income
If the loan is in default and the property is tenant-occupied, action must be taken to obtain the rental income. (See paragraph F, Appointment of Receiver, in this section.)
(2) Notify Borrower at Mailing Address
Radian requires that notices of delinquency be sent to the address of the insured property as well as to the borrower’s mailing address.
(3) Consider Pre-Sale to Tenant
If the tenant is paying rent and likes the property, an assumption or sale to the tenant could resolve the default.
C. Credit Reporting
Reporting delinquent payment histories to the appropriate credit bureaus will give the borrower incentive to make timely payments. Once the loan is 75 days past due, Radian requires that the entire loan history be reported to the three major credit repositories.
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D. Foreclosure Proceedings
If no loan workout options are appropriate, foreclosure proceedings should be initiated promptly. (See available alternatives to foreclosure in Section IV Loan Workouts.) , Radian expects foreclosure to be completed according to the time parameters for each state, which are published in Fannie Mae’s Servicing Guide. While expedient foreclosure processing is important, foreclosure alternatives should still be considered throughout the entire process. If appropriate, Radian will authorize a postponement or even a cancellation of a foreclosure sale in order to mitigate losses.
(1) When to Begin Foreclosure
The servicer shall commence and diligently pursue appropriate foreclosure proceedings upon determining the borrower is not willing to bring the loan into a performing status. In all circumstances, the servicer must commence foreclosure proceedings within six months of being permitted to do so pursuant to the terms of the loan and applicable law.
(2) Diligent Pursuit of Foreclosure
Once foreclosure begins, its completion must be pursued diligently. If the borrower contests the foreclosure or files suit, Radian must be notified on the monthly default report (MDR).
(3) Foreclosure Documents
Radian may request copies of all documents with regard to foreclosure. This includes the pre-foreclosure title search, foreclosure complaints, and other notices and decrees.
(4) Foreclosure Bid Price
In the absence of bidding instructions from Radian, the insured must bid in accordance with the state guidelines as outlined in Exhibit A. For loans owned by Fannie Mae, Radian has agreed to the foreclosure bidding guidelines as outlined in Fannie Mae Announcement 02-04. However, in states which provide deficiency recovery rights, or if special circumstances warrant, Radian may specify a bid outside of the guidelines in Exhibit A.
a) Radian will not require a bid of less than the uninsured loan amount. If the
recommended bid per Exhibit A is less than the uninsured loan amount, the insured may bid the uninsured loan amount.
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E. Bankruptcies
Some distressed borrowers seek protection under various chapters of the Federal Bankruptcy Act when faced with foreclosure. Radian requires notification of bankruptcy filings, and requires that appropriate action be taken to remove these cases from the protection of the bankruptcy court in order to proceed with the foreclosure and obtain title. In spite of bankruptcy filing, Radian has several special programs to avoid a foreclosure. Please refer to Bankruptcy and Workouts in Section IV paragraph D, , for techniques on mitigating losses from bankruptcies.
(1) Notification of Radian
If the borrower files for protection under the Federal Bankruptcy Act, Radian should be notified, when required in Section I, Reporting Delinquent Mortgages.
(2) Relief of Automatic Stay
Appropriate action must be taken to release the automatic stay in any bankruptcy filing if the borrower misses two post-petition payments, or immediately, in the case of a Chapter 7, no-asset filing.
F. Appointment of Receiver
The procedures and attendant costs for appointing a receiver vary with state law. Radian retains the right to require the appointment of a receiver. However, if costs exceed the benefit of such appointment, appointing a receiver is not necessary. Do not make an application for appointment of a receiver when the appointment would cause an undue delay in foreclosure proceedings. Also, when the expense of the receivership proceedings will be more than income from the property without commensurate advantage, appointing a receiver is not necessary.
G. Eminent Domain or Condemnation
In the event of taking a property through the exercise of eminent domain or condemnation (or sale instead of condemnation), the entire proceeds awarded must be applied toward reduction of the indebtedness of the loan.
H. Notifying Taxing Authorities
The Internal Revenue Service and any state or local taxing authorities that require reporting of any acquisition of mortgaged properties should be notified as required by law.
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III. Sub-Prime Loan Servicing
Sub-prime loans are generally higher risk than conforming loans. Therefore, these loans require extra diligence by loan servicers. The following are some of the minimum servicing practices appropriate for sub-prime loans. • Welcome letters for new loan originations and servicing transfers should be followed up by a personal phone call to establish a relationship with the customer and to educate the customer about their obligation. • Calls to delinquent borrowers should begin by the 5th day after a missed payment, depending on prior payment patterns, and in all cases by the 16th day after a scheduled payment remains unpaid. • Collection call frequency must continue approximately every third day on all cases involving no contact or no promise to pay, until a promise to pay is reached or until the case is removed from the calling queue due to justifiable reasons based on a response from the borrower. • Payment reminder notices or late charge assessment notices shall be sent by the 16th day after a scheduled payment remains unpaid. • Diligent collection efforts shall be undertaken to mitigate loss for any loan that is deemed uncollectible according to the existing terms of the promissory note. • In the absence of a pending resolution to the default, property inspections should be ordered on a monthly basis for any loan 45+ days past due. • For cases involving no contact with the borrower by the 45th day of delinquency, research for additional contact numbers and locations (in addition to the primary residence address and phone number) must be attempted. • Loss mitigation options including, but not limited to, forbearance agreements, loan modifications, pre-foreclosure sales or deed-in-lieu of foreclosure must be diligently solicited throughout the foreclosure process. • Initiation of foreclosure should begin by the 90th day of delinquency unless a firm resolution to the delinquency is in place.
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IV. Loan Workouts
A successful loan workout is a series of compromises by all parties to the transaction that avoids the least desirable result: mortgage foreclosure. Radian, under its Delegated Loan Workout Program, offers servicers the flexibility to implement qualifying foreclosure alternatives without requiring prior Radian approval. This streamlined approach to decision-making minimizes the time and cost of structuring workouts. It is essential to submit the proper documentation to Radian upon completing a workout, and designating any delegated documentation package as “Delegated.” The conditions by which a workout may qualify under the Delegated Program are specified in this section. Any workouts that do not meet these requirements must be submitted to Radian’s Claims Department for prior approval. Radian reserves the right to request any documentation related to delegated and non-delegated loan workout transactions for audit purposes. Radian also reserves the right to modify or discontinue approval authority under the delegated loan workout program at any time. Any workouts that do not meet the Delegated Loan Workout requirements must be submitted to Radian’s Claims Department for prior approval.
A. Loan Workout Theory (1) Loan Workout Specialist
Radian practices a collaborative and proactive loss mitigation philosophy in servicing its insured mortgages. Radian’s Loan Workout Specialist may communicate with borrowers, attorneys, accountants and investors to facilitate the most desirable result for all involved.
(2) Early Intervention
Early intervention is key in many successful workouts (see paragraph C, Loans in Jeopardy, in this section). Ideally, every loan should be reviewed for its workout potential, once it has been determined to be uncollectible and/or prior to referring it to foreclosure. Before a Loan Workout Specialist contacts a borrower, it helps to gather information about him or her to have an idea with whom they are dealing. By reviewing the original mortgage application, a servicer can learn a lot about the borrower before making a proposal. The application can also assist servicers in contacting hard-to-reach mortgagors, co-mortgagors or guarantors whose names may not be displayed on the loan servicer’s computer system.
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Every effort should be made to contact defaulted mortgagors. Skip-tracing through a credit report is often successful. Some credit reporting agencies provide limited reports specifically for locating mortgagors who cannot be found through conventional means. The advantage of this method is that it does not appear on the mortgagor’s credit report as an inquiry. For more information on this passive skip-tracing technique, contact the Radian Claims Department. Collectors, Foreclosure Processors, Bankruptcy Servicers and Customer Service Representatives should be trained to recognize loan workout opportunities. Procedural safety nets strategically placed through the default servicing process will catch viable loan workouts before they become REO losses. Generally, if a collector cannot either establish a promise of full reinstatement or a specific forbearance agreement with the borrower, and the loan is likely to produce a loss at the time it becomes REO, a loan workout should be attempted. Similarly, any request by a borrower for a deed-in-lieu (DIL), modification, assumption, pre-sale, or any other relief from the mortgage obligation should be evaluated to determine the appropriate resolution.
(3) Asset Value
The servicer should try to determine the value of the mortgaged property by obtaining a Broker’s Price Opinion and submitting it to Radian.
(4) Borrower Contact
Once a contact with the borrower is established, the servicer should determine the reason for default as well as the borrower’s basic financial circumstances. Servicers should discuss with the borrower all the ramifications of foreclosure including, but not limited to, credit and tax consequences and deficiency judgment liability, if state law allows.
B. Types of Workout Plans (1) Repayment/Forbearance Plan (Primary and Pool)
Radian encourages repayment plans or forbearance agreements in which partial payments are accepted over a specified period of time, after which the account becomes current. Conditions to approve under the delegated program: • Maximum term of repayment plan is 24 months. • Maximum past-due payments are six months PITI.
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Documentation to submit to Radian: • Notification via Monthly Delinquency Report (MDR). (See Section I, paragraph C.)
(2) Partial Reinstatements (Primary and Pool)
For loans in active foreclosure, where the borrower makes a payment to partially reinstate the loan, the foreclosure is rescinded and the balance is paid over a specified number of months in installments along with regular monthly payments. Conditions to approve under the delegated program: • Maximum arrears after partial reinstatement are six months PITI. • Maximum repayment of remaining arrears is 24 months. Documentation to submit to Radian: • Notification via Monthly Delinquency Report (MDR). (See Section I, paragraph C.)
(3) Stipulation Agreement (Primary and Pool)
For loans in active foreclosure, where the borrower makes a payment to partially reinstate the loan, the foreclosure is paused and the balance of the reinstatement is paid over a specified number of months in installments along with regular payments. In the event of a default on the agreement, the foreclosure action is resumed at the stage where it was paused. Conditions to approve under the delegated program: • Minimum partial reinstatement is attorney’s fees/costs and two months PITI. • Maximum repayment of remaining arrears is 24 months. • The agreement must specify that default of stipulation terms will result in the foreclosure action resuming at the stage where it was paused. Documentation to submit to Radian: • Notification via Monthly Delinquency Report (MDR). (See Section I, paragraph C.)
(4) Life Line Loan (Primary Only)
Radian’s Life Line Loan program may be used to facilitate a modification or assumption when the borrower cannot obtain the entire reinstatement amount, or it may be used to support a forbearance agreement. If a Life Line Loan proposal is approved, Radian will advance a partial claim payment to assist in reinstating the loan. The borrower may then repay Radian under lenient terms designed not to interfere with the continued payment of the first mortgage obligation.
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A Life Line Loan is an advance against any future claim. Any unpaid balance from a Life Line Loan is deducted from any future claim payment. Life Line Loans are not included in the delegated program. All Life Line Loan requests must be submitted to Radian for prior approval. Life Line Loan request packages should include the following documentation, if available: • Fannie Mae workout plan, Freddie Mac business plan, or other similar proprietary workout proposal plan. or • Current financial statements from each party to the mortgage. • Borrower letter explaining reason for default. • W-2s and tax returns (two years). • Two months’ prior pay stubs. • Broker’s price opinion. • Payoff breakdown.
(5) Modification (Primary and Pool)
A modification is the legal adjustment of any terms of the original loan agreed to by both the mortgagee and mortgagor. Modifications can be particularly effective in parts of the country where severe equity erosion makes pre-foreclosure sales less effective. When the borrower wants to retain ownership, lenders should consider changing some of the mortgage obligations/original terms. Some types of modifications are: • Lowering the interest rate either permanently or temporarily in order to reduce the monthly payments. • Implementing a step-rate modification, which allows for leniency in the first few years, and later steps up to a permanent rate. • Extending the term of the loan so the borrower can pay the arrearage in smaller installments. • Adding the delinquent amount to the unpaid principal balance (capitalization). Modifications that reduce the interest rate, eliminate negative amortization or change an adjustable-rate mortgage to a fixed-rate mortgage with a lower monthly payment do not require Radian’s prior written approval. However, Radian should be notified of the adjustment via a Delegated Loan Modification Notice form. (See Forms, Appendix I.) Radian’s prior written approval must be obtained for any loan modification that changes amortization from a fixed-rate loan to an adjustable-rate loan.
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Conditions to approve under the delegated program: • Capitalization is limited to 10% of the unpaid principal balance prior to modification, with a maximum of $15,000. • Radian’s coverage will include the capitalized amount up to the original loan amount. Any amount capitalized in excess of the original loan amount may not be included in any future claim for loss. • Maturity may be extended to a maximum of 480 months. • The interest rate may be increased up to a maximum of 1.5% over the existing interest rate. • Maximum modified P&I is 110% of prior P&I. Documentation to submit to Radian: • Copy of Radian Delegated Loan Modification Notice form. (See Forms, Appendix I.) This form should be submitted within 15 days after the modification agreement is executed.
(6) Pre-Foreclosure Sale
Also known as a short payoff, short sale or compromise sale, this is a sale of the property in which the net proceeds are not enough to satisfy the mortgage indebtedness. In other words, the property cannot sell for enough to pay off the loan. While this is one of the most common types of workout, it is not a cure-all and should be applied only if the facts and circumstances dictate. Servicers should contact and educate the borrower in these matters to obtain the most beneficial results for all concerned parties.
a) When the Borrower Cannot Afford Payment:
Evaluate the borrower’s reason(s) for default and the particular circumstances of the case. When it is clear that the borrower can no longer afford to keep the property, a private sale may be the only alternative.
b) Advise Borrower to List Property for Sale:
Advise the borrower to get a real estate broker to sell the property. The list price should be in line with the market value.
c) Contact Radian’s Claims Department:
Advise Radian that the property is listed for sale. Provide the list price and all agent information. In any proposed pre-foreclosure sale that does not meet the delegated loss mitigation program terms, a Radian Loan Workout Specialist may speak with the borrower about reducing the amount of the shortfall. We understand that time is critical in many of these cases, and that many borrowers cannot obtain funds to
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pay the entire shortfall at the settlement. However, we want the opportunity to mitigate the loss by negotiating with the mortgagors. Radian approaches these cases on a case-by-case basis, carefully weighing all variables, and is fully involved in these transactions. Conditions to approve under delegated program: (Primary only) Conforming loans, excluding sub-prime: • Minimum net proceeds to be no less than 90% of fair market value. • Radian’s claim payment under the delegated program is limited to 50% of percentage option (total allowable claim X % of coverage X .50%). • Maximum delegated claim payment is $30,000. • Borrower financial participation is strongly encouraged, but not required, in each pre-foreclosure sale. This may be in the form of cash, promissory note, or combination of the two. (See Exhibit B in Appendix II for a sample form of the promissory note.) Documentation to submit to Radian: • Radian Delegated Pre-Foreclosure Sale Notice form. • FNMA Workout plan, FHLMC Business Plan, or other similar proprietary workout proposal plan, which includes the reason for default and current borrower financial information. • Copy of the final HUD-1 settlement statement. • Copy of the payoff statement calculated through the date of closing. • Promissory note (if applicable).
(7) Assumption
Radian also will consider a request for an assumption, which is a sale of the property where the buyer takes over the note and mortgage from the sellers. This can be with or without release of the seller’s original liability. However, a release of the original borrower from liability requires Radian’s prior approval. To have a file reviewed for an assumption, the servicer must provide Radian with a credit package on the new borrower in addition to the information listed above for a pre-foreclosure sale. Conditions to approve under the delegated program (Primary and Pool): • Minimum down payment of 5% of the purchase price. • Existing borrower cannot be released from liability. • Loan must be brought current in conjunction with the assumption. • Assuming borrower must not have any outstanding judgments or liens. Documentation to submit to Radian: • Brief cover letter with supporting documentation, and copy of the borrower’s loan application form
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(8) Deed-In-Lieu of Foreclosure (DIL)/Voluntary Conveyance
In some cases, the best alternative to foreclosure is to have the mortgagor convey title of the property to the lender. Lenders should attempt to negotiate financial participation from the borrowers in the form of cash or a promissory note. We also suggest that lenders recommend that the borrowers list the property for sale for some period of time, preferably at least ninety days, before accepting a DIL. Lenders submitting a DIL request should ascertain whether there are additional liens or other clouds on the title that will prevent conveyance. Also, Radian should have the opportunity to negotiate a settlement with the mortgagors if the fair market value of the property is less than the total indebtedness. Conditions to approve under the delegated program: (Primary only) Conforming loans, excluding sub-prime: • Property must be listed at fair market value for a minimum of 90 days, unless the primary borrower is deceased. • All liable borrowers have been discharged from a Chapter 7 bankruptcy. • Non-owner occupied and investor properties are ineligible. • Maximum claim payment is $30,000. • Reported to credit repositories and IRS. Documentation to submit to Radian: • Brief cover letter with supporting documentation. • Fannie Mae Workout Plan, Freddie Mac Business Plan, or other similar proprietary workout proposal plan. • Promissory Note (if applicable).
(9) Note Purchase
If circumstances warrant, Radian may purchase the mortgage for the unpaid principal balance plus accrued interest and any of other claimable items.
C. Loans in Jeopardy
A loan in jeopardy is one that may not be in default, but where the mortgagor has requested assistance and/or has advised the lender of an imminent default. Radian does not wish to encourage or assist borrowers who have the means and ability to resolve their own mortgage problems. However, we want to be receptive to mortgagors who have managed to maintain their mortgage obligations while experiencing a sincere and legitimate hardship. Many foreclosures can be avoided if we work with borrowers, even if the loan is current. If a borrower with a current loan submits a sales agreement, hardship letter, or other indications of a problem, send in a Notice of Default (NOD) form marked Loan in Jeopardy to Radian’s Claims Department.
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Radian Default and Claims Servicing Guide
D. Bankruptcy and Workouts
Many of the largest foreclosure losses are from loans that were in bankruptcy prior to and/or during the foreclosure. While often overlooked as potential workout candidates, bankruptcy workouts can lead to substantial savings. A Chapter 7 bankruptcy is a liquidation of the debtor’s assets and erases unsecured debt. Therefore, borrowers who defaulted on their mortgage because they were overextended may be in a good position to maintain the mortgage after filing a Chapter 7 and being discharged from all other debts. It could be as simple as contacting the borrowers or their attorney to determine if they desire to keep the property, then obtaining financials and setting them up on a repayment plan to get caught up. If necessary, this approach can be combined with a modification or a Life Line Loan. The servicer’s attorney may recommend a reaffirmation agreement, but one is not necessary to complete the workout. In a situation where the debtor does not intend or desire to keep the property, a pre-foreclosure sale may mitigate the loss. Chapter 11 and 13 bankruptcy filings are a reorganization of debt using a repayment plan. These, of course, can work as originally intended by the courts and allow the debtors to bring their accounts current. Unfortunately, not much can be done if they do not. In spite of this, the debtors or their attorney should still be approached for possible alternatives. At the very least, constant monitoring of bankruptcy cases and filing prompt notices for relief can prevent the total indebtedness from increasing unnecessarily.
E. Financial Forms/Documentation
Radian accepts any financial forms that include the mortgagors’ income, expenses, assets and liabilities. If the investor is Fannie Mae/Freddie Mac, then the Fannie Mae workout plan or Freddie Mac Business Plan should accompany workout proposals. For delegated transactions, see documentation requirements for the specific workout type. (See Section IV paragraph B.) Non-delegated workouts that are sent to Radian’s , Claims Department for review should include the following: • Fannie Mae Workout plan, Freddie Mac Business Plan, or other similar proprietary workout proposal plan. If the above is unavailable, the following documentation should be submitted: • Current financial statements from each party to the mortgage. • Borrower letter explaining reason for default. • W-2s and tax returns (two years). • Two months’ prior pay stubs. • Broker’s price opinion.
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• Payoff breakdown. • For pre-foreclosure sales, include a copy of the sales contract and estimate of seller’s closing costs. Even if complete documentation is not available, Radian is willing to consider loss mitigation opportunities based on the facts that are available.
F. Deficiency Judgments
In the context of residential mortgage servicing, a deficiency is the difference between the amount of the mortgage indebtedness and any lesser amount recovered by the mortgagee from the foreclosure sale. Deficiency laws vary according to the property’s state. It is important that Loan Workout Specialists, as well as Collectors and Foreclosure Representatives, be conversant on the impact of local deficiency laws. This may be the strongest leverage a servicer has to encourage a borrower to either reinstate or cooperate in a loan workout. In states where deficiency is permitted, a deficiency should be established, and depending on the financial profile of the mortgagor, consideration should be given to pursuing the mortgagor for a personal judgment. Radian subrogates to the lender’s rights to pursue a deficiency. That means that on Radian-insured loans, we reserve the right to pursue borrowers directly where allowed by state law. These rights should be preserved and protected by the lender when instructed to do so by a Radian representative.
V. Claims Procedures
When it becomes necessary to file a claim, it is imperative to comply with the following procedures. All claims must be filed at Radian’s corporate office. A sample Claim for Loss form can be found in the form appendix in this guide. The generic Claim for Loss form approved by the Mortgage Insurance Companies of America (MICA) and the Mortgage Bankers Association (MBA) may also be used. Claims may also be filed electronically if you have established an account to use Radian’s MI-Online. For information on setting up an account for MI-Online, contact Radian’s eCommerce Department at 866 654.6364. Timely and accurate filing is essential to expedite the claims payment process. Radian strives to work with lenders to settle claims promptly and fairly, and to protect lenders from financial loss.
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Default and Claims Servicing Guide | Loan Workouts | Claims Procedures
Radian Default and Claims Servicing Guide
A. Claims Filing (1) When to File Primary Insurance
A Claim for Loss should be filed with Radian within 60 days after title is obtained through a foreclosure sale. If there is a redemption period, the 60-day filing requirements will begin when the redemption period expires.
Pool Insurance
A Claim for Loss should be filed with Radian within 60 days after closing on the sale of the REO property. A copy of the settlement statement from sale of the REO property must be included with the Claim for Loss.
(2) Voluntary Conveyance
If the title was acquired through a voluntary conveyance, the 60-day period will begin when the borrower signs the deed.
(3) Prior to Expiration of Redemption Period
A claim may be filed prior to the expiration of the redemption period.
(4) Extensions
An extension of the 60-day claim filing period may be requested. Submit the request in writing to Radian’s corporate Claims Department before the 60-day period expires.
B. Access to the Property
If requested, Radian representatives must be allowed access to the property to determine the property condition and value.
C. Eviction of Tenants
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.
(1) Filing of Claim Before Eviction
A Claim for Loss may be filed before getting physical possession.
(2) Rents Received
Rents received before and after foreclosure mitigate loss for all parties, and therefore shall be deducted from any Claim for Loss filed.
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Radian Default and Claims Servicing Guide
D. Sale of REO Property
During the 60-day claim-filing period, every effort should be made to sell the property.
(1) Listing the Property For Sale
The listing agreement should contain a clause precluding payment of a real estate sales commission if Radian exercises its options to purchase the property as more fully described in Condition Twelve-A, paragraph 1 of Radian’s Master Policy.
(2) REO Purchase Offers
Any offer for sale of the insured property must be submitted to the Radian corporate Claims Department.
VI. Components for a Claim for Loss
In order to process the Claim for Loss, certain information is necessary. A complete Claim for Loss contains all the information and proof reasonably required by the company to evaluate its liability in the particular case. The information must be on a properly approved form, as set forth in Section V .
A. Documents Needed for a Complete Claim for Loss
• The Company will request any additional documentation required to complete the claim review. • If the Company elects to purchase the property, evidence that the lender has acquired and can convey Merchantable Title.
B. Alternative Mortgage Forms
If the claim is for any mortgage instrument other than the standard level payment amortizing type, including those with adjustable rates, a copy of the mortgage note must accompany the Claim for Loss form along with an explanation of the repayment feature.
VII. Limitation of Coverage
Radian’s coverage is limited to the normal risk of a default caused by a change in the borrower’s economic circumstances. It does not extend to other risks, such as those from casualty, title problems or fraud.
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Default and Claims Servicing Guide | Claims Procedures | Components for a Claim for Loss | Limitation of Coverage
Radian Default and Claims Servicing Guide
The lender should contact a Radian Loan Workout Specialist to obtain Radian’s prior consent for any of the following: • Any release of any borrower from liability for the loan. • Any assumption of liability for the loan with release of the original borrower from liability. • Any release of the collateral or any partial release of the collateral. • Any change in the character or use of the property (for example, the conversion of a single-family home into a commercial property). • Any transfer or sale of the servicing of the loan to a company not approved by Radian. If any of the above conditions occur without Radian’s prior consent, Radian may terminate coverage without notice, subject to the terms of the Master Policy.
VIII. Exclusions from Coverage
The occurrence of any of the following conditions will result in exclusion of coverage: • Any loss resulting from the lender exercising its right to accelerate the loan based on a balloon payment clause in the loan document. However, if the borrower refuses to accept an extension or renewal of the mortgage terms at market rates from the lender, this condition will not apply. • Any loss on a loan which was delinquent prior to Radian issuing insurance coverage on that loan. • Any loss as the result of incomplete construction of the insured property. • Any loss resulting from fraud or misrepresentation of a material fact on which Radian based its decision to insure the loan. • Any loss resulting from negligence in the origination or servicing of the loan. • Any cost or expense to repair any physical damage resulting from: - Contamination by toxic waste or hazardous water. - Earthquake, flood, or other act of God. - Civil war or riot. - Any defects in the construction not identified in the Application for Insurance.
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Default and Claims Servicing Guide | Limitation of Coverage | Exclusions from Coverage
Radian Default and Claims Servicing Guide
IX. Claim Settlement
Under Radian’s Master Policy of Insurance, Radian has several options in calculating its liability. In addition, there are various time limits within which the lender must provide information, and within which Radian must process the Claim for Loss. Once a claim has been filed, any questions regarding its status must be directed to Radian’s corporate Claims Department.
A. Timing of Claim Settlement
Radian will pay a claim within 60 days after all required documentation is submitted, subject to the following conditions and requirements:
(1) Additional Documentation
Radian may request additional documentation within 20 days of the filing date of the initial claim. Until Radian receives the additional documentation, the 60-day limit will be suspended.
(2) Access
If Radian seeks access to the property, the 60-day period will be suspended until access is made available.
(3) Acquisition
If Radian elects to acquire the property, the 60-day period shall be extended insofar as necessary for there to be 10 days remaining after the insured tenders Merchantable Title to Radian.
(4) Late Payment
If Radian does not pay the claim within 60 days, subject to the above conditions, simple interest will be paid at the note rate accruing from the settlement due date.
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Default and Claims Servicing Guide | Claim Settlement
Radian Default and Claims Servicing Guide
Appendix I – Forms
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Default and Claims Servicing Guide | Appendix I
Notice of Default
Radian Guaranty Inc. · 1601 Market Street · Philadelphia, Pennsylvania · 19103 215 238.9850 · 877 723.4261
Radian’s Master Policy contains certain requirements regarding the submission of this Notice of Default. Failure to comply with the submission requirements of your Master Policy may preclude or diminish a subsequent claim. After submission of the initial Notice of Default, monthly reports concerning the status of the loan and servicing efforts are required. Lender Name
Radian Lender I.D. number
Street address
Street Lender loan number State Zip code
City, state and zip
City
Borrower(s) Full name(s)—as shown on title
Last First Middle Radian certificate number Primary Borrower’s Social Security number County State Zip code
Address of insured property
Street
City, county, state and zip
City
Description Current unpaid principal balance Delinquent taxes, insurance, etc. Total amount of delinquency Next payment due
$ $ $ Occupancy status Condition of property Vacant Poor Owner Fair Yes Tenant Excellent No
0.00
Day Day Year Year
If tenant occupied, has rent been assigned?
Month
Date of last inspection
Month
Reason for delinquency 01. 04. 07. 10. 13. 14. How can foreclosure be prevented? Death Unemployment Bankruptcy Moved/Vacated Auto repairs 02. 05. 08. 11. 15. Illness Business failure Excessive use of credit Dissatisfied with property See comments 03. 06. 09. 12. 16. Marital problems Temporary loss of income Casualty loss Energy/Environment cost Internal/Servicer problems Recast loan Forebearance agreement
Other________________________________________________________________________________
Waive principal payments temporarily Recommend borrower list property for sale
Short term assistance program from Radian Voluntary conveyance
Foreclosure should begin — no resolution possible Borrower contact Servicer attempts to contact
Date(s)
Borrower’s phone numbers
Area code Phone number (Home) Area code Phone number (Business)
Conversation with borrowers
Results
If C0-Borrower is on title, was contact attempted?
Yes
No
Lender’s authorized representative
Name and title (please type or print) Signature Area code Date
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Phone number
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Default and Claims Servicing Guide | Notice of Default
MONTHLY DELINQUENCY REPORT 1601 MARKET STREET DATE: MAY 01, 2000 PHILADELPHIA, PENNSYLVANIA 19103 (215) 564-6600 NATL. WATS (1-877-723-4261) 12345000 ATTN: John Doe First Bank Mortgage P.O. Box 33456 Louisville, NY 12452-1324 ————————————————————————————————————————— THE FOLLOWING IS OUR REPORT OF A LOAN PREVIOUSLY REPORTED BY NOTICE OF DEFAULT: BORROWER: Majors, Robert YOUR LOAN NUMBER 124263 Majors, Laura RADIAN CERTIFICATE NUMBER 76110243 914 Volcano Street RADIAN DEFAULT NUMBER 08.9585 Helena, MT 34267 1. ACCOUNT STATUS 4. PROPERTY CONDITION DUE DATE __________ OCCUPANCY STATUS: AMOUNT OF MONTHLY PAYMENT __________ OWNER TENANT VACANT __________ PRINCIPAL BALANCE __________ DATE OF LAST INSPECTION __________ TOTAL AMOUNT DELINQUENT __________ CONDITION OF PROPERTY: LAST PAID DATE __________ POOR GOOD EXCELLENT __________ FAIR MARKET VALUE __________ 2. FORECLOSURE DATE ACCOUNT REFERRED TO 5. BORROWER CONTACT ATTORNEY __________ DATE COMPLAINT FILED __________ LAST CONTACT WITH BORROWER __________ DATE SUBSTITUTE TRUSTEE _____________________________________ APPOINTED __________ HAVE STEPS BEEN TAKEN TO CONTACT DATE JUDGMENT ENTERED __________ CO-MORTGAGOR________________________ SALE DATE SCHEDULED FOR __________ _____________________________________ SALE HELD __________ HAVE ALTERNATIVE MEASURES BEEN USED TO CURE DELINQUENCY _________________ _____________________________________ 3. BANKRUPTCY _____________________________________ DATE PETITION FILED __________ CH 13, 11, 7 __________6. REO INFORMATION IF CH 13 DATE POST PETITION REO APPRAISED VALUE $_______________ PAYMENTS BEGIN __________ REALTORS NAME _____________________ STATUS OF POST PETITION TELEPHONE # _____________________ PAYMENTS __________ ADDRESS _________________________ MOTION TO LIFT STAY FILED __________ _________________________ MOTION TO LIFT STAY GRANTED__________ LIST PRICE ______________________ 7. ADDITIONAL COMMENTS IF NECESSARY
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Claim for Loss
Radian Guaranty Inc. · 1601 Market Street · Philadelphia, Pennsylvania · 19103-2337 Please type or print below. Insured lender 1.
Name Master Policy number Address Street City State Zip code Master Policy number Street City Radian certificate number First City Middle State Zip code State Zip code
800 523.1988 · 215 564.6600
Loan servicer
(if different from above) Address
Loan and Policy numbers 2.
Lender’s loan number
Name of borrower 3.
Last
Property address 4.
Street
Date through which mortgage interest is paid
Preservation of property and disbursements
Month Day Year Date Description
G
Amount
$ $ $ $ $ $ $ $ $ Total $
Per diem rate used Balance due (principal only) as of the above date Straight interest from above date to date filing claim _____________% Subtotal A Attorney’s fees or 3% of subtotal A, whichever is less *Property taxes paid
(enclose paid bills)
$ $ $ $ $ $ $ $ $ $ Is Property
G
G
G
G
G
G
*Insurance premiums advanced
(circle these amounts on Ledger Cards)
G
**Preservation of property
(utilities, normal maintenance, etc.)
G
**Other disbursements
(expenses appropriate to obtaining title)
0.00
Subtotal B Less: (when applicable)
Vacant
Occupied
Post default receipts Rent or other income Cash retained (escrows, hypothecated
funds, pledged accounts, etc.)
$ $ $ $ If occupied, name of occupant Key to the property may be obtained from
Total claim Less: (when applicable) Net proceeds from authorized sale
(prior approval by Radian required)
$ $
*Do not include portion paid from escrow funds **Itemize in “Detail” section
Adjusted claim
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The following must be submitted with this claim
1. Foreclosure Deed 2. Current evidence of merchantable title 3. Receiver’s account, if receiver appointed during foreclosure proceedings 4. Copies of mortgage ledger cards from inception of loan 5. Receipts for any disbursements 6. Paid tax bills (if advanced by mortgagee) 7. On adjustable-rate mortgages, the following are needed: • Original note and index it is tied to • Frequency and change rates • Initial starting and accrual rates
REO information REO appraised value/date Realtor’s name/telephone
Name Area code Phone number
$
Month Day Year
List price
$
Signature
On behalf of the insured named above, I certify that the foregoing is a true and correct statement of all items which may be claimed; that this claim for loss is in accord with the terms and conditions of the Master Policy; and that said insured has acquired merchantable title and hereby tenders same to the Company.
Lender’s authorized representative
Area code
Phone number
Date
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Delegated Pre-Foreclosure Sale Notice
Radian Guaranty Inc. · 1601 Market Street · Philadelphia, Pennsylvania · 19103-2337 Please type or print below. Lender Name 800 523.1988 · 215 564.6600
Lender ID number
Loan number
Radian certificate number
Street address
Street
City, state and zip
City State Zip code
Investor Name
Investor number
Borrower Name
Last First Middle
Street address
Street
City, state and zip
City State Zip code
Sale Terms Sales price Original appraised value Net proceeds Closing date BPO value Borrower contribution Total debt at closing (excluding late fees) Additional information Program Guidelines Primary Insurance only Minimum net proceeds to be no less than 90% of fair market value. Radian claim payment limited to 50% of percentage option (total allowable claim x coverage % x .50). Maximum delegated claim payment is $30,000. Reported to credit repositories and IRS. Borrower participation not required; however, it is strongly encouraged in each pre-foreclosure sale. Required documentation to accompany this notice: • Copy of the final HUD-1 settlement statement • Copy of the payoff statement calculated through the date of closing • FNMA Workout Plan, FHLMC Business Plan or other similar proprietary workout proposal plan • Executed Promissory Note (if applicable) Cash: BPO date: Note:
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Signatures
The undersigned lender represents and certifies that the above information is correct and complete and acknowledges that continuation of mortgage insurance coverage by Radian is provided in reliance upon the representations noted above.
By
Lender’s authorized representative Date
Print name
Area code
Phone number
Lender’s fax number
Acknowledged by
Radian Workout Specialist Date
Print name
Area code
Phone number
Specialist’s fax number
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Delegated Loan Modification Notice
Radian Guaranty Inc. · 1601 Market Street · Philadelphia, Pennsylvania · 19103-2337 Please type or print below. Lender Name
800 523.1988 · 215 564.6600
Lender ID number
Loan number
Radian certificate number
Street address
Street
City, state and zip
City State Zip code
Investor Name
Investor number
Borrower Name
Last First Middle
Street address
Street
City, state and zip
City State Zip code
Modification Terms P&I PITI Loan balance Interest rate Term Loan type (ARM Fixed) Effective date of modification First modified payment due date Borrower contribution BPO value Additional information (reason for default, etc.) Program Guidelines
Existing loan
Modified loan
●
●
●
●
●
●
BPO date:
Delegated loan modification authorization allows for capitalization of the equivalent of up to 10% of the outstanding balance, not to exceed $15,000. Any future claim will be based on the outstanding principal balance up to, but not to exceed the original loan amount. This form should be submitted within 15 days after the modification agreement is executed.
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Signatures
The undersigned lender represents and certifies that the above information is correct and complete and acknowledges that continuation of mortgage insurance coverage by Radian is provided in reliance upon the representations noted above.
By
Lender’s authorized representative Date
Print name
Area code
Phone number
Email address
Lender’s fax number
Acknowledged by
Radian Workout Specialist Date
Print name
Area code
Phone number
Email address
Specialist’s fax number
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Radian Default and Claims Servicing Guide
Appendix II – Exhibits
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Default and Claims Servicing Guide | Appendix II
Exhibit A
Foreclosure Bidding Instructions by State
For Radian-insured loans owned by Fannie Mae, Radian has approved Fannie Mae’s foreclosure bidding instructions as outlined in Fannie Mae Announcement 02-04. For all other loans, and in the absence of specific foreclosure bidding instructions from Radian, the insured must bid in accordance with the following state guidelines.
State AK AL AR AZ CA CO CT DC DE FL GA Guam HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS
Bidding Amount Total Debt Total Debt FMV - Full value* Total Debt FMV - Full value* Total Debt FMV - Full value* FMV - Full value* FMV - Full value* Open @ $100 up to full FMV* FMV - Full value* Total Debt FMV - Full value* Total Debt FMV - Full value* Total Debt FMV - Full value* Total Debt FMV - Full value* FMV - Full value* FMV - Full value* FMV - Full value* FMV - Full value* Total Debt Total Debt FMV - Full value* FMV - Full value*
State
Bidding Amount
MT FMV - Full value* NC FMV - Full value* ND Total Debt NE FMV - Full value* NH FMV - Full value* NJ Open @ $100 up to full FMV* NM Total Debt NV FMV - Full value* NY Open @ $500 up to full FMV* OH FMV - Full value* OK FMV - Full value* OR FMV - Full value* PA Open @ Sheriff cost up to full FMV* Puerto Rico FMV - Full value* 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 Total Debt
*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. If the recommended bid, per the table above, is less than the uninsured loan amount, the insured should bid in accordance with investor guidelines, not to exceed the uninsured loan amount. Uninsured loan amount = Total debt - (total debt x % coverage); Total debt = Total debt + attorney’s fees and costs. For questions concerning any proposed bid outside these guidelines, please call 877 723.4261, ext. 3200.
Please fax the foreclosure sales results, within 48 hours after the foreclosure sale is held, to Radian at 215 627.5624. The foreclosure sales results are to include the Radian certificate number, bid amount, foreclosure sale date, and the successful bidder.
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Default and Claims Servicing Guide | Foreclosure Bidding Instructions by State
Exhibit B Promissory Note
Radian Guaranty Inc. · 1601 Market Street · Philadelphia, Pennsylvania · 19103-2337 Note Radian number
800 523.1988 · 215 564.6600
Dated:
Month Day Year
Principal amount Borrower
Last Street City State Zip code First Middle
1. Meaning of Some Words
The words “I”, “me” and “my”, mean anyone signing this Note as a Borrower. The words “you” and “your” mean Radian Guaranty Incorporated or anyone this Note is transferred to and who is entitled to payment under this Note. In consideration for certain waivers of your rights under the insurance policy you issued on my mortgage loan, I am obligated and promise to pay U.S. $___________ (this amount is called principal) plus interest to you. Interest will be charged on unpaid principal until full amount of principal has been paid. I will pay interest at the yearly rate of _______%.
2. Borrower’s Promise to Pay
3. Interest
4. Payments
A. Time and Place:
I will pay principal and interest by making monthly payments on the 1st day of each month beginning on __________. I will pay the specified payment amount every month until I have paid all of the principal and interest and any other charges described below that I might owe. My monthly payment will be applied to interest before principal. If on ____________ I still owe amounts under this Note, I will pay the amounts in full on that date. I will make monthly payments at the address listed above.
B. Amount of Monthly Payments:
I will pay ___ payments in the amount of U.S. $_________. My ________ payment will be in the amount of U.S. $___________, plus any outstanding charges or other amounts described herein.
5. Borrower’s Right to Prepay
I have the right to make payments of principal at any time before they are due. This payment of principal only is known as “prepayment”. When I make a prepayment, I will notify you in writing that I am doing so. I may make a prepayment without paying any penalty. You will use all of my prepayments to reduce the amount of principal. If I make a prepayment other than that expressly addressed above, there will be no changes in the due date or in the amount of my monthly payment unless you agree in writing to those changes. Prepayments will reduce the number of monthly payments I must make, or the amount of my final monthly payment.
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Promissory Note (continued)
6. Default A. The following are each “Defaults”:
(i)
I fail to make any payment within fifteen (15) days after the due date;
(ii) I or any of the Co-signers provide you with false information or signatures at any time; (iii) I die or become legally unable to manage my affairs or any of the Co-signers die or become legally unable to manage their affairs; (iv) I or any of the Co-signers file for bankruptcy or become subject to a proceeding which seeks relief from debt; (v) I or any of the Co-signers are unable to pay any debts as they come due; or (vi) I or any of the Co-signers violate a requirement of this Note or any agreement between you and me existing now or in the future.
B. Notice of Default
If a Default occurs, you can declare all amounts owing under this Note immediately due without telling me.
C. No Waiver by You
If I am in Default and you do not require me to pay immediately in full, you will still have the right to do so if I am in Default at a later time.
D. Payment of Your Costs and Expenses
If you require me to pay immediately in full, I will reimburse you for all your costs and expenses in collecting the amount I owe. Those expenses include, for example, attorney’s fees.
7. Late Charges
If I fail to pay within 15 days of any monthly payment due date, I agree to pay a late payment charge of twenty (20) percent of said payment. You can do any of the following without telling me or losing any rights against me: (i) Accept a check or other payment marked “paid in full” or with similar language as a partial payment under this Note;
8. No Notice or Risk of Loss
(ii) Give me additional time for payment of any amount owing under this Note; or (iii) Add or release any person obligated under this Note.
9. Change of Address
I will notify you at the address listed above, if I or any Co-signers change address within thirty (30) days of the change. Each person signing or co-signing this Note is individually fully responsible for payment of this obligation. If there is Default, you can sue any one of the people signing or co-signing this Note even if you do not sue anyone else. This means that any one of the people signing or co-signing this Note may be required to pay all of the amounts owed under this Note. If permissible under state law, you may also garnish the wages of any person signing or co-signing this Note. Any legal questions about this Note will be decided according to the laws of the Commonwealth of Pennsylvania. Any lawsuit concerning this Note will be brought in Philadelphia, Pennsylvania in the Court of Common Pleas of Pennsylvania or the United States District Court for the Eastern District of Pennsylvania.
10. Obligations of Persons Under the Note
11. Law
12. Consent to Suit
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Promissory Note (continued)
13. Credit Reports
I authorize you to periodically obtain credit reports on me. You will be responsible for the costs of obtaining the credit reports. If any part of this Note is found to be invalid, the rest will remain in effect. I and each Co-signer of this Note agree that any lawsuit concerning this Note may be conducted before a judge and without a jury. I accept and agree to all the requirements of this Note. Each person signing below has received a completed copy of this Note without any blanks.
14. Validity of Agreement
15. Waiver of Jury Trial
Borrower
Co-Borrower
Printed name
Printed name
Date
Date
Forwarding address
Forwarding address
City
State
Zip
City
State
Zip
Phone number
Phone number
Social Security number
Social Security number
Driver’s license number / State issued
Driver’s license number / State issued
Signatures Must Be Notarized.
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Default and Claims Servicing Guide | Promissory Note
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