Transcript Document

Let’s Play Ball!
Batting Order
1. Headquarters Batter Up!

Office of Asset Management and Portfolio Oversight
(OAMPO) Organizational Chart
2. Outfield


Asset Management Servicing Contract
Digitizing Our Records
3. Game Summary



Portfolio Snapshot
Insured Portfolio Rating
Insured Delinquencies
LQMD → Enhanced Counterparty Analysis
Civil Money Penalties (CMP)
5. Three Strikes


Limited Denial of Participation (LDP)
Section 230
6. Umpire




Rating Lenders
Lender to Lender Transfers
8. Strike Zone

Multifamily Delinquency and Default Reporting System
(MDDR)
9. Team work makes the dream work!

Liaison Model Overview
10. Pitch Out

Increasing Lender Responsibilities
11. Spring Training
4. Rookies


7. Infield
Chief Underwriter Delegation Approval Pilot
Financials in the hands of the lenders



Active Partners Performance System (APPS)
Owner Ratings
Handbook 4350.1 Rewrite
12. Playbook





Section 8(bb) Notice
Aggregated Asset Management
PBCA Awards
Section 8 Policy Renewal Guide
202 PRAC
13. Inside Baseball

2
Questions and Answers
Headquarters: Batter Up!
Office of Asset
Management and
Portfolio Oversight
(OAMPO)
OAMPO
Deputy Director
Multifamily Asset
and Counterparty
Oversight Division
Director
3
Assisted Housing
Oversight Division
Director
Business
Relationships
and Support
Contracts
Division
Director
Field Asset
Management and
Program
Administration
Division
Director
Property
Disposition
Division
Director
Outfield
Asset Management Servicing Contractor
Transformation Wave Support:
• We are working with Alpine to ease the logistical challenges
of offices going through the Transformation and moving to
the new Account Executive model.
Timing:
• The distribution of assets to the Contractor will be handled
by Headquarters.
• The Contractor is already servicing several hundred assets
out of the Fort Worth Hub and the Kansas City Satellite.
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Outfield
Digitizing Our Records
Standard Work:
•
Combined effort to update our retention & disposition schedules for the 1st time in 30+
years
•
Program Centers & Hubs will organize files based on defined lists and priorities.
Scanning:
•
The scanning contractor finished in Fort Worth and has moved on to Chicago.
•
The timing is not directly linked to Transformation Waves  We are sliding into home on
this initiative!
Impact:
•
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This effort will ease the transition of project information from one location to another.
Game Summary—Portfolio Snapshot (as of June 5, 2014)
Number of Non-Insured/ Insured Properties by
Region
Portfolio Summary
Non-Insured Properties
Insured UPB:
$67,138,671,229
Total assets: 10,448
Non-Insured Portfolio:
1,163,099 units
Total Assets: 18,479
Type
# of properties
Dollars/Units
221d4
1,353
$14.5 billion
223a7
3,652
$18.8 billion
223f
3,540
$24.6 billion
542b/ 542c
1,319
$6.8 billion
Other
632
$2.2 billion
Assisted Only
9,178
723,906 units
Assisted with CA/DL
7,851
256,847 units
Other
1,450
182,346 units
Southeast Region
2,672
assets $13.7 billion UPB
3,476
assets
1,603
$12.3 billion UPB
assets
3,414
assets
2,133
$11.7 billion UPB
assets
2,629
assets
1,919
$12.1 billion UPB
assets
Midwest Region
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Total
Projects
$ UPB
Percent
Projects
Percent
Projects
Percent
Troubled
(1-5)
504
$3.6
Billion
4.8%
848
4.6%
1,352
4.7%
Potentially
Troubled
(6-7)
2,761
$22.5
Billion
26.4%
4,631
7,392
25.6%
Not
Troubled
(8-10)
7,183
$41
Billion
68.8%
Total
10,448
$67.1
Billion
25.1%
Western Region
Insured Delinquencies
Projects
12,939
18,418*
70.2%
$17.3 billion UPB
3,577
assets
Northeast Region
Southwest Region
Non-Insured
5,382
assets
2,214
assets
Rating Summary
Insured
Insured Properties
20,122
28,866
69.7%
Amount
%UPB
DQ3 – 90 day
14
$152,388.307
0.23%
DQ2 – 60 day
3
$10,450,548
0.01%
Total
17
$163,838,854
0.24%
Game Summary—Insured Portfolio Rating (as of June 5, 2014)
Average REAC score for Troubled Properties by Hub
Insured Troubled Ratings
Minneapolis
Columbus
Kansas City
Fort Worth
Greensboro
Atlanta
Baltimore
Detroit
Los Angeles
Philadelphia
Jacksonville
San Francisco
Boston
Chicago
New York
Denver
Seattle
504 projects
1
2
1.8% 1.6%
3
10.1%
4
10.5%
5
76.0%
88.63
88.50
86.92
84.54
84.50
84.23
84.07
83.10
79.95
79.14
78.62
76.53
76.17
75.30
74.92
74.79
69.00
Insured Portfolio Rating Takeaways:
•
Most Troubled properties are rated a 5
due to a DEC referral or DSCR issue
•
Average REAC scores for Troubled
properties do not show a consistent
quality problem. Seattle is low, but
had a very small number compared to
other Hubs.
•
June calls will focus on loans where
owner contributions are necessary
Ratings Migration Analysis
72.4%
71.9%
72.1%
72.5%
72.5%
70.3%
69.0%
68.5%
68.8%
69.3%
68%
69%
68.7%
67%
National
Average –
81.2
69.3%
69.7%
Not Troubled
(8-10)
17.5%
19.2%
8.9%
19.5%
8.0%
20.6%
8.1%
20.9%
20.6%
6.8%
6.9%
Feb-13 Mar-13 Apr-13 May-13 Jun-13
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21.3%
8.7%
Jul-13
Aug-13
21.5%
7.7%
21.7%
7.9%
Sep-13
22.4%
7.8%
Oct-13
6.2%
25%
25%
23%
6%
Nov-13 Dec-13
6%
Jan-14
26.4%
7%
25.8%
5.0%
25.6%
4.9%
Potentially
Troubled (6-7)
Troubled (1-5)
4.7%
Feb-14 Mar-14 Apr-14 May-14
•
Migration analysis of ratings will allow us to examine how our portfolio is performing over time and assist in predicting and avoiding claims.
•
The Fiscal Year 2014 MAP Goal is to reduce the Troubled and Potentially Troubled by 25 percent over the next three years.
Game Summary—Insured Delinquencies (as of May 28, 2014)
•
Delinquent Insured Loans DQ2 & DQ3:
Month
DQ2
DQ3
Delinquent Loans
Delinquent UPB
% Total UPB
May
14
15
29
$341,868,806
0.57%
June
13
15
28
$340,563,324
0.57%
July
16
13
29
$303,932,173
0.50%
August
14
15
29
$299,839,184
0.49%
September
10
18
28
$263,595,316
0.42%
October
13
18
31
$262,582,915
0.42%
November
8
18
26
$230,662,100
0.36%
December
10
15
25
$201,587,066
0.31%
January 2014
11
13
24
$316,037,260
0.49%
February
6
14
20
$172,215,419
0.27%
March
0
12
12
$128,430,564
0.20%
April
7
13
20
$211,351,794
0.32%
May
3
14
17
$163,838,854
0.24%
May Delinquencies by MROC Score
Red
DQ3
DQ2
7
2
•
Fannie Mae: 0.10%
•
FHA MF (May 2014): 0.24%
Delinquency Takeaways:
•
•
Delinquent UPB is holding
relatively steady with the
rating plan fully implemented
Delinquent UPB has decreased
from 0.68% in March 2013 to
0.24% in May 2014.
May Delinquencies by Rating
Total
9
TROUBLED
8
GSE 60+ Day Multifamily Delinquency
Rate as of March 31, 2014:
•
Freddie Mac: 0.04%
Rating
March
1-2
8
3-5
8
Green
4
1
5
POTENTIALLY TROUBLED
6-7
1
Total:
14
3
17
NOT TROUBLED
8-10
0
We have met with the Office of Evaluation about creating a
Multifamily Risk of Delinquency tool that would more
accurately track potential delinquencies.
Potentially Troubled was a small DQ2 that has since corrected.
Rookies
Lender Quality and Monitoring Division (LQMD):
– LQMD was officially brought over to the Office of Asset
Management in January.
– Weekly LQMD staff meetings are held with a Manager
participating.
– LQMD is an active participant in the Multifamily and Health
Care Credit Risk Committee Meeting.
• Activities:
– Revising Project/Loan Review Template
– Revising Lender Review Template
• Initiatives:
– Delegated Underwriter Approval
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Rookies
Civil Money Penalties (CMP) Pilot for Owners/Properties with
Failing REAC Scores:
 Owners of FHA Multifamily Properties will have CMPs
assessed if they are found to provide substandard living
conditions to their tenants. This is a joint collaboration
between Multifamily Asset Management, DEC, and REAC.
 Owners who receive either under 30 REAC physical
inspection scores or under 45 REAC physical inspection
scores with other problems and are identified by the DEC
are eligible candidates (threshold subject to change when
Pilot becomes Program).
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Three Strikes!
Limited Denial of Participation (LDP)

Housing Notice 2014-5 was issued on March 25, providing guidance for extended
use of Limited Denial of Participation for borrowers who have caused a claim
against the FHA insurance fund

Issued “based on the best interests of the Federal Government” to reduce risk

LDP’s exclude individuals or entities from new business with the Department for a
period of 12 months

LDP’s can be issued by Hub or Program Center Directors as needed:
 Issue Show Cause letter outlining reasons for a possible LDP
 Recipient responds within 30 days
 HUB/PC Directors determine whether LDP should be issued
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Three Strikes!
Section 230 of the Consolidated Appropriations Act, 2014
12
•
This language codified the process for initiating and processing a Compliance,
Disposition, and Enforcement (CDE) Plan.
•
Sets forth the established path and eligible enforcement remedies.
•
HQ staff is working with DEC, REAC, and OGC to assess the impact this will
have on CDE plans and enforcement initiatives.
•
Currently drafting a Housing Notice on Section 230 that will outline necessary
guidelines and any changes from previous policy.
•
The Housing Notice will be released in the coming months.
Umpire
Chief Underwriter Delegation Approval Pilot:
• Multifamily Counterparty Oversight currently
approves all new MAP underwriter requests as well
as continuation of underwriter approval in the
event an underwriter moves to a new lender.
• The concept is to delegate underwriter approval to
chief underwriters that meet certain criteria,
holding the lender and chief underwriter
accountable and responsible for ensuring their
underwriters meet requirements.
• Oversight will be provided through the annual
review of the lender, the quality control plan and
the certification by the lender and chief
underwriter regarding compliance.
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Umpire
Financials in the hands of the lenders:
• Post 2011 Regulatory Agreements require owners to
provide lenders audited financial statements
• Pre-2011 there is no requirement in the loan
documents for owners to provide information
• To date HUD has taken the approach that sharing
financial information is subject to privacy rules
• OGC is again reviewing the privacy issue
• On a parallel track, we are asking REAC the feasibility
of sharing financial information via HUD systems.
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Infield
Rating Lenders:
 Compiled the ratings criteria and methodologies utilized by the three major rating
agencies (Fitch, Moody’s and Standard and Poor’s) for banks and mortgage
servicers

Compiled the ratings definitions and elements used by the FDIC for the CAMELS
rating

Developing the template for the Lender Review process that will incorporate the
following elements:
o Organizational assessment
 Business model
 Key management personnel
o Financial condition and performance of the lender
o Portfolio performance
 Individual asset rating
 Delinquency and default
o Servicing performance
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Infield
Lender to Lender Transfers:
• When servicing of a troubled asset is
transferred from one servicer to another,
HUD would like the opportunity to consent
to these transfers given the troubled nature
of the asset.
•
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This will work concurrently with HUD’s
efforts to compare watch lists and troubled
assets with servicers and ensure the
portfolio is managed to mitigate risk.
Strike Zone
Multifamily Delinquency and Default
Reporting System (MDDR)
•
•
•
•
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Servicers have had the ability to enter their watchlist loans
into MDDR since February 28, 2014.
So far no issues have been experienced in entering data. In
fact few questions have been received on the process.
Training sessions have been offered, but the system is very
intuitive.
Lenders have been concerned about how HUD will use this
information.
Team Work Makes The Dream Work!
Liaison Model Overview
Background:
• Lengthy processing times, inconsistency, and missing
information are often associated with Multifamily.
During this time of change and improvement, it is
vital that Multifamily address these concerns, to
ensure continued growth.
• Advocacy organizations and owners often reach out
to the DAS, Commissioner and Secretary to express
their feedback directly regarding what is working/not
working for them. With the
DAS’/Commissioner's/Secretary’s schedule stretched
tight, identifying alternate contacts for key
stakeholders will streamline the Department’s ability
to respond to concerns and resolve problems as they
arise.
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Liaison Model Overview
Proposal:
• Shift to a customer based approach for all aspects of
Multifamily business (FHA Insurance, Assisted
properties, Policy partners, etc.).
• Stakeholders with liaisons will be as follows:
• The FHA MF lenders with the largest portfolios.
• The top [thirteen] identified stakeholder groups
that will include umbrella organizations, trade
associations and advocacy groups.
• The top [three] [owners] in our assisted portfolio,
which have the most assisted 202 and 811
properties under their management.
• The program has launched and you may be hearing
from your liaison soon.
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Pitch Out
Increasing Lender Responsibilities:
– Non-Critical Repair Escrows—Mortgagee Letter 2013-13
• Continue to receive applications.
– Reserve for Replacement Releases
• Mortgagee Letter and Housing Notice are in draft stages.
• Intend to have a similar structure to the Non-Critical Repair Escrows.
• OGC gave the green light to allow the lenders to voluntarily assume
responsibility for releases on retroactive and prospective deals.
– Considering other possible tasks the lenders might assume voluntarily:
• Partial Releases of Security
• Modified TPAs
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Spring Training
 Active Partners Performance System (APPS) 
OAMPO’s Team:
– We are training hard—learning from our competition
(Fannie and Freddie) and studying game tape (existing
regulations and the APPS system) to completely revamp
the APPS system and the 2530 Regulations.
– We have lofty gold medal goals including:
• Revise CFR Part 200 Subpart H to require 2530 to
mirror industry borrower vetting standards (looking at
the “decisionmakers” only).
• Revise APPS to mirror the new single family Lender
Electronic Assessment Portal (LEAP).
– We need to identify the right teammates and make
improvements all around to reach our goals and take home
the gold.
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Spring Training
 Owner Ratings:
– A rating system will be developed to rate borrowers and
assisted housing owners.
– Coordinated with the revamp of the APPS system and the
2530 regulations.
– Will facilitate risk mitigation by preventing continued
business with “bad borrowers.”
– Expected completion—>2015
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Spring Training
HB 4350.1 Rewrite – Status and Next Steps
•
Status
– On February 1, 2013, the Office of Asset Management kicked
off the Re-write of Handbook 4350.1. Drafts of 40 of the 42
chapters have been submitted and are in various stages of
completion.
– Drafters of each chapter are meeting in Summits to review
comments received from reviewers and prepare the next draft
of their chapters. Several Summits have been held. Additional
summits will be held as needed.
– Comments from industry partners will be considered and next
drafts prepared for the Departmental Clearance process.
•
Next Steps
– The Office is considering enlisting the service of a contractor to
perform basic copyediting services and to assure consistency
in voice, tone and readability throughout the chapters.
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Playbook
Section 8(bb)
24
•
Section 8(bb) provides the Department with a tool
for preserving Section 8 budget authority.
•
Under Section 8(bb), if a project-based Section 8
contract is terminated or expires and is not renewed,
HUD is required to transfer any remaining budget
authority to another contract (either new or
existing).
•
A Housing Notice outlining the requirements for a
Section 8(bb) transfer should be released within the
next few months.
•
Please continue to submit viable transactions for
approval in the interim.
•
Please encourage utilization of the Section 8(bb) tool
by Owners that are considering an opt-out.
Playbook
Aggregated Asset Management Pilot
•
A tool for owners to manage at the portfolio level and
realize operational savings.
•
The goal is for owners to share operational savings
with HUD through reduced Section 8 HAP contract
outlays.
•
A Housing Notice will be released in the coming
months describing how an owner can become
involved in the pilot to manage many assets as one
portfolio.
–
•
We will also release a federal register notice on
managing a portfolio of assets under one mortgage.
–
25
This will not require financing under one mortgage or combining
contracts (although like contracts can be combined).
Soliciting comments and ideas on how to facilitate this type of
consolidation from both internal and external stakeholders.
Playbook
PBCA Awards
•
Update on PBCA Funding:
–
•
•
•
Update on Contract Extension:
–
Contract period for both ACCs (11 and 42 states) extended through December 31, 2014.
–
The PBCA Annual Contract Year for Reporting purposes ends Sept. 30, 2014 and PBCAs should submit those reports to HACAO, per ACC timetable.
PBCA Assignment and Withdrawals:
–
HACAO provided the CAOMs with the Assignment/Withdrawal information, as per exhibits of the ACC Reports.
–
CAOMs are working with the Field Office PM’s to correct the property data information.
–
Contact Lorraine Satterwhite with any questions on Assignment/Withdrawals .
Update on ACC Required Exhibit C FTE Certification:
–
•
26
The CAOMs will provide 3rd quarter Quality Risk Assessment Reports, per the 11 states ACCs. The completed reports are due back to HUD by July 30.
Section 8 Fillable Forms for PBCA use :
–
•
HACAO reviewed the Exhibit C FTE Certs for PBCA Contract year Oct 1, 2012 - Sept. 30, 2013 and contacted CAOMs to correct and resubmit data for
payment. HUD has paid All Performance and Customer Service, except for a few states that will be paid on next month’s voucher.
Update on the Quarterly Risk Assignment for PBCA Reporting:
–
•
No expected delays in funding. Contact Lorri Farrell, Acting Director of Funding Oversight Department, with problems.
A RHIIP listserv posting #315 was posted June 6:
•
Multifamily Housing Section 8 Renewal Forms were updated by OMB and posted to HUDCLIPs.
•
HUD is upgrading fillable forms which will be posted. Until that time, please use the new forms that are currently posted
Rent Comparability Study Review Checklist:
–
HACAO Desk Officers and HUD Field CAOM staff participated in a Rent Comparability Study Review Checklist Training on June 4.
–
An industry wide training will be provided - tentatively on July 9, 2014.
Playbook
Section 8 Policy Renewal
Guide
• The Section 8 Renewal Policy Guide provides
owners and the Department with guidance on
how to renew Section 8 HAP contracts.
• February 2014: the Department issued the
draft revised Guide for public comment.
• May 14, 2014: The comment period ended
and the Department received 129 pages of
comments.
• Currently, staff is reviewing the comments.
• Late September: The anticipated date for
releasing the final version of the Guide.
27
Playbook
202 PRAC
• For more than 50 years, the Section 202
program has expanded the supply of
affordable supportive housing for very lowincome elderly.
• The FY14 Budget included legislative language
to provide HUD with needed flexibility to
support a demonstration that includes a rental
assistance only option.
– Develop design for a demonstration of a housing plus
services model intended to support aging in place.
– Rental assistance only serves more households at
less expense:
• $20 million would make 3,400 units available
(190 units under traditional capital advance).
• PRAC model pays for both construction cost and
operating subsidy.
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INSIDE BASEBALL
 Thank you for your time
 We are open to all questions. Please contact Mark B. Van Kirk, Director
Phone: ( 202 ) 708-3730 Ext. 2855
Email: [email protected]
 We take great pride in our work, but not too proud to make changes for the
better!