A proactive and reliable property preservation partner is critical for mortgage servicers. Why? Because the clock is always ticking, and time is money. With tight FHA conveyance timeframes, finding a partner that understands HUD processes is essential.
FHA conveyance timelines
The goal of an FHA property via a post-foreclosure sale is conveying it back to HUD “in conveyance condition,” or ICC, within 30 days (or within an extension opportunity granted by HUD).
Ensuring repairs are completed correctly and timely with HUD allowable and over-allowable approvals reduces the likelihood of additional damages or issues at a property such as vandalism, weather-related occurrences or property deterioration. This reduces risk for our clients and for MCS.
If the property is not deemed acceptable at the time of FHA conveyance, it’s returned (reconveyed) and repairs must be completed with no reimbursement opportunity from HUD. This is why quality completion of work resulting in on-time conveyance is critical for FHA post-sale properties.
Over the past four years, improving on-time FHA conveyance has been a focus for MCS, and we currently have a 95%+ on-time rate.
“This is a metric our clients count on us to hit, and we’ve been extremely successful at achieving it,” says Bethany Ockerman, First Vice President of Mortgage Services. “We frequently get client kudos for our on-time conveyance, and we’re proud of that.”
To achieve and maintain this FHA conveyance rate, MCS focuses on four critical factors.
1. A three-tiered QC process
MCS employs a three-tiered QC process that is more extensive than other industry vendors. This process entails three layers of internal and external review to ensure the property is ICC ready.
Step 1 – The processor/loan manager on MCS’s FHA team reviews the full property condition for ICC status. If confident, the file moves on to Step 2.
Step 2 – A property condition review is conducted by an independent party outside of the FHA group via a visual scan of the property and utilizing an 80-question checklist.
Step 3 – One of our ICC QC team specialists analyzes the first two reviews as well as the entirety of the loan history and the history available on the servicer or investor's site (P2600) to ensure that the property is truly ICC.
“Even with this level of intense scrutiny, we’re still able to meet the FHA conveyance timeframe at a 95% or greater rate, which we believe is the best in the industry,” Ockerman says.
2. Tracking and monitoring
Using our internal Convey360 system, MCS tracks and monitors all of our FHA loans, focusing on any properties approaching their FHA conveyance due date or scheduled foreclosure sale date. This information is linked to our client technology platform, enabling clients to review the status of their files, including any notes posted as well as links to work orders and other documents.
“They can also view all the relevant upcoming dates, who's working on their file, and contacts for questions to enable real-time updates on anything that they need,” Ockerman says. “We track and review all of that and work to get them in ICC.”
3. Enhanced oversight
MCS also follows an enhanced oversight process on 60-days-to-sale inventory. During the time when a property is in pre-sale before the FHA conveyance timeline even begins, MCS aims to complete as much work as possible. This makes the route to ICC faster and smoother post-sale.
“This process relies on our clients to share the reporting so we know if it’s in a 60-day sale bucket,” Ockerman says. “For clients who are really engaged, it can be extremely effective.”
4. Continuous client communication
Tight FHA conveyance timeframes leave little room for error, so continuous communication is critical to keeping everyone in the loop.
“We host weekly meetings with our clients where we discuss loans coming up on their conveyance due date and provide them with reporting, to ensure everyone is aware of status and what's needed to convey on time,” Ockerman says.
Communication with our clients is not limited to weekly calls. Frequent one-off phone calls and emails are also utilized to work on urgent files and share necessary information. And it’s about more than just updates—Keeping a focus on communication enables MCS to build and maintain the strong working relationships with our clients that we’re known for.
Learn More About MCS for Property Preservation
MCS consistently maintains a 95% or higher compliance rate with client requirements as well as a high success rate for on-time FHA conveyance. Our focus is quality, and our three-tier ICC QC process that all loans go through before we convey them to HUD or place them into FHA conveyance condition reduces risk for post-conveyance findings or reconveyance activity. In need of a new property preservation partner you can trust with your FHA properties? Contact Jason Myers at MCS to learn more.