So, everyone is upset at FCI. No one has received any payments, and that includes us. However, I want to shed a different light on it. Yes, they have had some issues, but there is always more to the story and here is “the rest of the story”.
When the file comes in to FCI, they break it out into pieces and they send some of it to one dept, and some to other dept. This is what happened with the payments. When Sherry sent the checks over the first week of August, with a really large pile of closing packages, the checks went to Finance and the rest of the file went to the Onboarding dept. Until Thursday, Onboarding had not checked with Finance to see if the checks had been received. After Sherry insisted they had the checks (evidently most companies do not send the checks until they see if FCI will accept their package), they called over and found out the checks were being held pending the onboarding and approval of the packages.
So now it makes sense why they say that it takes 10-15 days to “onboard”. I thought that was weird, but now we know what it means. “Onboarding” a loan for them, is almost the same as sending it through a “compliance review”. That is pretty cool actually. We get a “compliance review” without having to pay for it. But what does that mean to an investor? It means that FCI actually knows the law, knows Dodd-Frank, has policies and procedures relating to the law, and they figure out if a loan is “in accordance” with the law. Wow, that is a heck of a protection for an investor because none of us want to find out years down the road that Capella Mortgage didn’t follow the law. That is why it takes so many days. Now, having said that, the other side of the coin is that none of their staff have ever read our 80 page set of docs, and it would have really helped if they had done that because we are still answering generic questions, like what is the late fee on an owner occupied property? We all know that it is 4%. The law says it is 4%, but they have no way of searching our documents to find the 4%, so they waited until they had a long list of questions, and then they sent it to us. Last Thursday. Sherry and I were on a 3 hour conference call with them. Yes, it was frustrating to me to say “look at the promissory note, page 2 paragraph 3”. On the other hand, I was impressed with some of the things they asked, some of the things they needed, and some of the things they caught. We have actually now changed our procedures to accomodate things they can’t do. For example, when a COE is delayed until the next month a prepaid interest credit is given. That is standard in the mortgage world. But we will not be doing it anymore because they do not have the ability to “tickle” a file and adjust the first payment amount.
Therefore, no more “interest credits” for the borrowers. For example, we draw docs on the 23rd of the August, thinking that we have plenty of time for escrow to close the deal. We estimate that COE will be August 25th, and the borrower will pay about 5 days of prepaid interest and the 1st payment date will be Oct 1.
But what if the loan doesn’t close until September 4th? Then the first payment on October 1 should only be for 26 days of interest, right? Evergreen and Weststar could not make the payment coupon for only 26 days of interest, but FCI can! So we changed our policy: no more interest credits. FCI will bill for the correct number of days of interest on the first payment. I like this better, we have all hated balancing to “prepaid interest credits”, so I am now changing our loan documents to reflect this change. (and we have different sets of loans docs for 5 different states, and 2 sets depending on if it is a commercial loan or residential loan. That’s 10 templates to change.)
Did FCI find anything wrong? Yes, on one of the HPML loans that was for an owner occupant, I allowed the borrower to not have impounds collected because A) the loan is only for 7 months, B) the borrower has the insurance collected with the car insurance, and C) the borrower has perfect payment history. Uh oh, none of our other servicers would have minded that. However, under Dodd-Frank’s HMPL rules, I am not allowed to make an “exception” for any borrower, and I thought that escrow accounts were only mandatory for High Cost loans, which we cannot do anymore. Therefore that borrower has to accept the fact that they are going to have an impound account.
FCI is subtracting strange amounts from each payment. We don’t know why. We are raising it to their management.
As our customers call in, they are being told to call FCI and make their payments even if they have not received payment coupons. We do have the new account numbers for the FCI loans, which means they are set up in their computer. So I think we are moving forward. Next, now that our account is set up, we are sending the wire for the big loan that closed last month, so you will see those payments in a few days.
Very important housekeeping items. We have a BLOG on the portal where you can find all of these messsages. I will email the articles to you first, and then if you lose them or don’t see them, they will be on the Blog page.
COMPLAINTS, ISSUES, QUESTIONS, PROBLEMS, ETC.
PLEASE PLEASE PLEASE…..if you want your problem/question/complaint answered, PLEASE do one of the following:
A) send an email to email@example.com (do not send an email to Sherry, she has hundreds of basic questions coming in from investors every day, and using the new email address will send your request to our Investor Queue, where there are 6 people trained on how to find the answer for you, and this way I can track the number of inquiries that get answered and the number that do not, and how quickly we answer them. ), or
B) fill out a “Servicing Request Form” (found on the InvestTrustDeeds.com website. )
Gotta get this out asap, so more later as I figure things out.