As the program has evolved, it has allowed for non-occupant co-Borrowers as a way to expand homeownership opportunities for Borrowers who may need assistance with their mortgage and have a family member willing to take on the financial responsibility for the Section 184 Guaranteed Loan. These changes ensure clear guidelines exist to govern the assumption and associated release of personal liability, such as ensuring that Borrowers that assume loans meet minimum creditworthiness standards. (c) As of [EFFECTIVE DATE OF FINAL RULE], Direct Guarantee Lenders servicing Section 184 Guaranteed Loans may request a waiver of 1005.703(a). (iii) The property may be affected by a disaster event. In 1995, the first year of the program, HUD guaranteed less than 20 Section 184 Guaranteed Loans. (d) (d) Additional reasonable and necessary restrictions may be imposed, as prescribed by Section 184 Program Guidance. This section proposes a Servicer's responsibilities under the Section 184 Program, which includes, program compliance, using a sub-Servicer, changing Servicers, transferring servicing rights, reporting requirements, program ineligibility, and records retention. are not part of the published document itself. Property inspections and maintenance. Program ineligibility. General standards. A financial institution's branch office must be registered with HUD to originate or submit applications for Guaranteed Loans. (a) Servicers should not proceed to closing on the assumption until and unless the Tribe has assigned the leasehold to the new Borrower, and it has been approved by the BIA. (v) It reports the pre-foreclosure sale to consumer reporting agencies. Upon finalizing the pre-endorsement review, the Direct Guarantee Lender must certify that all required documents were submitted and meet the requirements of 1005.503. HUD-registered business names include any alias or doing business as (DBA) on file with HUD. (3) The Sponsor must notify HUD of changes in a Sponsorship within 10 days. This review must be conducted by staff not involved in the originating, processing, or underwriting of the Loan. The provision further states final payment to the Servicer does not preclude HUD from seeking reimbursement of costs and return of amounts from the Servicer when there is a reconveyance to the Lender. Assignment of the loan. The amount of the Borrower's monthly installment will be based on an Amortization Schedule as prescribed in Section 184 Program Guidance. HUD may permit a Borrower to refinance any qualified mortgage, including an existing Section 184 Guaranteed Loan, so long as the Borrower and property meet all Section 184 Program requirements. (ii) 98.75 percent of the lessor of the appraised value or sales price when the appraised value or sales price is $50,000 or less. With each annual recertification, Servicers must submit updated contact information, current FHA recertification status, and other pertinent documents as prescribed by Section 184 Program Guidance. Non-discrimination. means thirty days in a month, regardless of the actual number of days. (c) Streamline Refinance refers to the refinance of an existing Section 184 Guaranteed Loan requiring limited Borrower credit documentation and underwriting. means any collateral authorized under existing Tribal, Federal, or State law. After determining that a Borrower and property meet the pre-foreclosure sale eligibility requirements, the Servicer shall send to the Borrower: (1) Section 184 loans can be used, both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance. This section provides that to be eligible to participate in the Section 184 Program, a Borrower must be an Indian Family, Indian Tribe, or TDHE. receives the refund from the Holder. Paragraph (a) would provide that HUD may reconvey the property to the Holder due to an Originating Direct Guarantee Lender or Servicer's noncompliance with the requirements of this part or if there is a withdrawal of a Claim for benefits in accordance with 1005.815. This section clarifies the circumstances of the on-going payment of the monthly payment of the Annual Loan Guarantee Fee and sets a timeframe for submission of this payment even when the loan is sold between Direct Guarantee Lenders or to a Servicer. The Servicer shall be limited to one supplemental claim for each claim under submission categories in paragraphs (a) and (b) of this section. A Tribe may enact legal procedures through Tribal council resolution or any other recognized legislative action. Payment of Upfront Loan Guarantee Fee 1005.505. The Servicer must retain in the servicing case binder a copy of the written formal forbearance agreement postponing principal and interest payments. Purpose 1005.101. www.regulations.gov. The agreed upon interest rate may not exceed the rate generally charged in the area for mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government, or a rate determined by HUD, whichever is lower. (4) Require the Lender to retain all quality control plan related documentation, including selection criteria, review documentation, findings, and actions to mitigate findings, for a period of three years from initial quality control review, or from the last action taken to mitigate findings, whichever is later. This proposed revision of the Lender application process would allow HUD to more closely track how many, and the type of, Lenders participating in the program. Lender The notice required by paragraph (b) of this section shall include: (1) A statement encouraging the Borrower to contact the Servicer; (2) Servicer contact information, including but not limited to the telephone number to access Servicer personnel and the Servicer's mailing address; (3) A statement providing a brief description of examples of Loss Mitigation options that may be available from the Servicer and a statement how a Borrower may obtain more information about Loss Mitigation options; (4) An outline of all critical Servicing deadlines under this subpart, including but not limited to the Servicer timeframe for evaluating a complete Loss Mitigation application, deadline for Borrower to select a Loss Mitigation option, Tribal notice under 1005.757(a), if applicable, and the process for filing First Legal Action; (5) Disclosure to the Borrower that they may be eligible for additional protections under Consumer Financial Protection Bureau regulations in 12 CFR chapter X; (6) A Loss Mitigation application and submission instructions, including a statement that delays in submission of the Loss Mitigation application or incomplete submissions shall reduce the availability of certain Loss Mitigation options to the Borrower; (7) The manner in which a Borrower can access the HUD list of homeownership counselors or counseling organizations, including a website(s) or toll-free telephone(s); and. Section 1005.803(c) would provide that the Servicer must make available to HUD any request for Claim files within three business days of the request. Denial of participation. (i) Payment of claim: unpaid principal balance 1005.837. The required certification must be submitted to HUD (2) Interest accrued on the Section 184 Guaranteed Loan; (3) Principal of the Section 184 Guaranteed Loan; and. Reporting for credit purposes. Start Printed Page 78362 (8) HUD may approve other exceptions on a case-by-case basis. (3) Any reports required in accordance with Section 184 Program Guidance. L. 113-6, approved March 26, 2013), the 2015 Consolidated and Further Continuing Appropriations Act (Pub. This proposed section is consistent with current program policy, practice, and/or procedure. Annual recertification 1005.223. (1) The Direct Guarantee Lender shall include a late fee if the Upfront Loan Guarantee Fee to is not remitted to HUD within 15 days of settlement. The HUD pre-endorsement review is intended to reduce the risk for fraud and program non-compliance that could negatively impact the Fund, and is consistent with current program policy, practice, and/or procedure. This section addresses the process HUD will follow to notify interested Non-Director Guarantee Lenders and financial institutions seeking HUD approval to be a Servicer under the program. This proposed section provides the details for loan provisions required for a Section 184 Guaranteed Loan, including loan form, loan multiples, loan payments, loan maturity, property standards, disbursements and prepayment. This section proposes the maximum age of loan documents at the time of underwriting and loan closing. Back-up offers. Vacant property procedures 1005.737. HUD approval will be based on the following: (1) In response to comments received during Tribal consultation, this section specifically references Community Development Financial Institutions (CDFIs) as being included as a `Lender approved by statute.' This section would require an Indian Family to document its status as American Indian or Alaska Native through evidence as prescribed by Section 184 Program Guidance. (3) If a transfer results in missed monthly installment(s) of the Annual Loan Guarantee Fee, the new Servicer shall pay the overdue installment(s) in a lump sum to HUD within 30 days of acquisition of the loan and include any applicable penalties in accordance with 1005.611. (3) Require the Servicer to repair the damage before Conveyance, at the Holder's own expense. This section mandates a due-on-sale clause permitting acceleration for all Section 184 Guaranteed Loans. (d) This section may not be construed to preclude HUD from conducting a post-endorsement review. This section also would provide that a payment may be returned because of failure to include a late charge only if the Servicer notifies the Borrower before imposition of the charge of the amount of the monthly payment, the date when the late charge will be imposed and either the amount of the late charge or the total amount due when the late charge is included. (a) As part of the claim submission, the Servicer shall either: (1) Certify that as of the date of the deed or assignment of the loan to HUD the property was: (i) Undamaged by fire, flood, earthquake, or tornado; (ii) Undamaged due to failure of the Servicer to act as required by 1005.765; and. means calendar day, except where the term business day is used. This proposed section is consistent with current program policy, practice, and/or procedure. (4) If an Upfront Loan Guarantee Fee was financed as part of the existing mortgage, no refund will be given. Notice published on November 1, 2016 (81 FR 75836), HUD once again exercised its new annual premium authority to implement an annual premium to the Borrower in the amount of 0.25 percent of the remaining loan balance. In the case of Section 184 Guaranteed Loans on Trust Land, Good and Marketable Title includes the ownership rights of the improvements as reported in the Title Status Report issued by the BIA. The Servicer shall comply with additional processing instructions as prescribed by Section 184 Program Guidance. Comments must refer to the proposal by name and docket number (FR-5593-P-01) and must be sent to: HUD Desk Officer: Office of Management and Budget, New Executive Office Building, Washington, DC 20503, Fax: (202) 395-6947, and Reports Liaison Officer, Office of Public and Indian Housing, Department of Housing and Urban Development, Room, 451 7th Street SW, Washington, DC 20410. Partial Payments shall be treated as provided in 1005.723. Eligibility. Servicers must maintain the servicing case binder for a period of three years beyond the date of satisfaction or maturity date of the Loan, whichever is sooner. Trust Land. If the managing general partner withdraws or is removed from the partnership for any reason, a new managing general partner shall be substituted, and HUD must be notified in writing within 15 days of the substitution. (ii) If the Borrower does not complete the trial payment plan, the Servicer must apply all funds held in suspense to the Borrower's account in the established order of priority. Documentation to support the lawful residency status must be provided. Conveyance of property without Good and Marketable Title. (d) If a claim is resubmitted after reconveyance or reassignment and HUD determines a decrease in the value of the property at the time of the resubmission, HUD may reduce the claim payment accordingly. Forbearance plans are arrangements between a Servicer and Borrower that may allow for a period of reduced or suspended payments and specific terms for the repayment plan. These markup elements allow the user to see how the document follows the (2) That any restrictive covenant, other than permissible restrictions on Trust Land, on such property relating to race, color, religion, sex, disability, familial status, or national origin is hereby illegal, unenforceable, or void. This section would require the Direct Guarantee Lender to provide evidence of the remittance of the Upfront Loan Guarantee Fee, as required under 1005.607. The assignment of fee simple land properties requires prior HUD approval. It is impractical to have a Tribe assume environmental responsibilities for Section 184 Guaranteed Loans on fee simple Properties outside of a reservation, which may be located far from the reservation of the Borrower's Tribe. This section addresses qualifications for participation in HUD's Section 184 Program if a Lender is not approved under the statutory approved listed in 1005.203. (1) Sponsored Entity (a) The Tribe, THDE or a trial member is interested in purchasing the property, but the sale cannot happen because the defaulted Borrower remains on the lease.

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