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Spertonga helps address Fannie Mae guide requirement to clear HOA liens.

Sperlonga Data and Analytics, Arlington, Virginia, a subasidiary of national real estate asset firm MMREM, has announced it is able to assist lenders and servicers struggling to meet Fannie Mae's requirement that homeowner association (HOA) claims be satisfied in order to preserve the government-sponsored enterprise's (GSE's) first-lien position. The requirement, specified in Servicing Guide Announcement SVC-2012-05 (www.elanniemae.com/sf/guides/ssg/annItrs/pdf/2012/svc1205.pdf), was published on April 11 and took effect on July 1, 2012.

According to Fannie's announcement, "Fannie Mae requires servicers to protect the priority of the mortgage lien and to clear all liens for delinquent homeowners' association (HOA) dues and condo assessments on properties acquired through foreclosure or deed-in-lieu of foreclosure."

The GSE requires that servicers advance payments to HOAs when borrowers are 6o days delinquent on assessmerits if the lender's first position status is at risk. In the case of foreclosures or deeds-in-lieu of foreclosure, such liens must be cleared no later than 3o days after the fore-closure sale or deed-in-lieu acceptance.

"The first problem is that most servicers have not maintained a database or tracked the primary or secondary HOAs associated with a property after loan origination. HOAs don't typically know how and where to present claims for unpaid accounts, so neither can easily find the other," said Brent Stokes, Sperlonga Data and Analytics' senior vice president.

"We have built the industry's only broad database of the nation's HOAs, presently consisting of about 225,00o associations of the estimated 350,000 out there, and it is growing daily," he said

"We find the HOAs, establish contact and use our cloud-based technology platform to deploy our Delinquency Check[R] service to vet HOA demands for accuracy and prevent servicers from overpaying amounts inconsistent with the GSE's reimbursement guidelines," Stokes added.

Another problem servicers have in complying with the new requirement is knowing precisely when their borrowers are 60 days behind on their HOA payments. "There is simply no way for them to have knowledge of when HOA payments ceased," said Stokes. "So we created LOLAS[TM], Sperlonga's Life of Loan Association Surveillance product. LOLAS tracks HOA assessments and provides servicers with a mechanism that makes it easier to comply with the new guideline," he said. "At the same time, servicers receive early warning of impending loan defaults because HOA payments always stop before loan payments do."

Stokes added, "In the i6 'super-lien' states and the District of Columbia, HOA liens can take precedence over first mortgages, so Fannie Mae and other investors are understandably concerned. They are not saying how the lien-clearing and delinquency tracking process can be accomplished, but that's not their job. Servicers can turn to Sperlonga for assistance well within the time constraints that the GSE is requiring."

According to Stokes, "HOA ownership includes more than 25 million homes--and that number is increasing. The associations and their management companies badly need their monthly revenues to maintain community standards and preserve property values. Fannie Mae has given their claims priority with the new rules. Sperlonga was designed specifically to address the HOA challenges that servicers face, and now we can help them comply and protect the GSE's first-lien positions," he said.
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Title Annotation:TechNewz
Comment:Spertonga helps address Fannie Mae guide requirement to clear HOA liens.(TechNewz)
Publication:Mortgage Banking
Date:Jul 1, 2012
Words:531
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