Third Party Surveillance Services
Hanover Capital offers third party credit risk surveillance on Residential Mortgage-Backed Securities with a goal of improving security performance and minimizing loss. Our role involves two specific areas of service: Transaction Oversight and Servicer Oversight.
Transaction Oversight
- Monitor the portfolio
- Interpret the performance to identify early warning signs such as delinquency
- Loans that become 60 days delinquent are placed on a “Watch List”
- Monitor prepayment speeds and collections
- Manage the loans that have the potential of causing a loss to the investor
- Contact the servicer to obtain status of loan / reason for delinquency
- Obtain collateral information and origination appraisal on loan
- Order Broker Price Opinion (BPO) on property
- Minimize the anticipated loss
- Actively monitor the servicing of each 90+ day delinquent loan through regular calls with the servicer.
- Validate the accuracy of the original appraisal with the BPO.
- Assess the loan data for conformance to guidelines; identification of possible fraud and predatory lending practices.
- Evaluate the Representations and Warranties of the Purchase and Servicing Agreement; facilitate repurchase process if warranted.
- Facilitate prompt servicer remedial action to mitigate potential losses.
- Reconcile actual deal loss waterfall and reporting against anticipated loss estimates.
- Interact with, and if necessary, mediate among issuers, servicers, trustees, investors, mortgage insurers and other parties as issues arise.
- Make recommendations based on industry standards and facilitate resolution.
Servicer Oversight
- Review servicer operations to ensure uniformity with industry standards
- Management background capabilities
- Review of systems capabilities
- Policies and procedures review
- Comparison of file review to policy protocol
- Review monthly remittance reports provided by servicer.
- Review monthly consolidated tape for accuracy.
- Monitor and reconcile monthly remittance of P & I; review servicer advances on delinquent loans.
- Notify the servicer of loans that are 60 days + delinquent and evaluate servicer’s collection efforts via collections notes and conversations with collectors. Any lapse in collection efforts is addressed and then noted for future improvement.
- Address payment or foreclosure plan with servicer.
- Review attorney cost and time to foreclose using FNMA guidelines.
- Calculate maintenance costs and property disposition fees.
- Review mortgage insurance claims; investigate denials; ensure timely distributions.
- Contact servicer for their property disposition recommendation.
- Recommend to client appropriate property disposition strategy.
- Monitor servicer disposition to verify adherence to client’s wishes.
- Provide annual servicer reviews unless performance warrants more frequent reviews.
