The loan servicing component of the Caldwell Quality Control Plan for Mortgage Lending, which is only in the full two-volume edition, organizes for you all of the procedures you need to cover loan servicing QC from routine servicing responsibilities through default servicing activities including preforeclosure requirements and foreclosure issues. These guidelines help employees understand the requirements and the QC auditor test for problems. Many forms and checklists are included to assist with these tasks.  

Routine Servicing Responsibilities. The Plan organizes the QC procedures for a variety of situations involving non-delinquent accounts including transmitting information about the borrower and the borrower's accounts, keeping accurate accounting and escrow records, charging permissible fees, handling loan payoffs and prepayments, processing assumptions, transferring servicing, setting up ARMs, making annual ARM adjustments and administering HUD section 235 loans.


Delinquent Accounts. The Plan provides QC procedures to test actions triggered by a default including communications and notices to the borrower, dealing with short payments, default reporting requirements and the servicer’s responsibilities for physical inspections of the property and property preservation efforts.


Relief and Forbearance. The QC Plan covers requirements for short term forbearance, longer term forbearance such as FHA special forbearance agreements and associated partial claims, mortgage modification agreements and recastings notes as well as the issues involving loans affected by natural disasters and military base closings.


Preforeclosure Review. The Plan reviews compliance with preforeclosure procedures to assure that the decision to foreclosure is based on a complete record with no gaps in the servicing efforts.


Preforeclosure Sales. It covers the steps needed to implement FHA, VA, Freddie Mac and Fannie Mae policies that encourage preforeclosure sales, even if the sale results in a loss, in order to avoid the additional costs involved in foreclosure.


Deeds in Lieu of Foreclosure. The Plan covers the procedures required when using a deed in lieu of foreclosure, which allows a borrower who cannot cure a default to avoid a deficiency judgment.


Bankruptcy. It organizes the steps a servicer must follow when a borrower files bankruptcy including filing claims and participating in the proceedings to protecting the interests of the lender, insurer and investor in bankruptcy proceedings.


Property Seizures. The Plan sorts out the procedures to follow when a federal, state or local law enforcement agency seizes or causes a forfeiture of the mortgaged real estate on the basis that it was acquired with the proceeds of illegal activities or used in illegal activities.


Foreclosures. The QC Plan covers the policies and procedures to deal with foreclosures including notice, meeting time limits, providing for circumstances such as 11th hour reinstatement, deadlines for completing the foreclosure action, evictions, seeking deficiency judgments and a variety of other issues.


Managing Legal Actions and Costs. The plan organizes cost-control requirements that arise in servicing when engaging a lawyer to take action on behalf of the lender or investor including a borrower bankruptcy, a government property seizure action and a variety of other circumstances.


Claims and Conveyances. The Plan covers QC of procedures for obtaining title through foreclosure or deed in lieu of foreclosure. The steps detail servicer responsibilities concerning conveying the property to the insurer and/or making a claim for mortgage insurance.