Introduction to Mortgage Servicing Examinations Training - March 2023

Mortgage, LLC Schedule of Findings, Questioned Costs, and Recommendations (continued) For the Year Ended December 31, 2021

Effect or potential effect

Failure to obtain all required documentation and certify pools within the required timeframe in accordance with Ginnie Mae standards could expose the issuer to potential monetary fines and/or loss of designation as an Issuer of Ginnie Mae Mortgage-Backed Securities, and expose Ginnie Mae to potential loss.

Recommendations

Management should implement a process with the document custodian to monitor that pools are certified or recertified upon transfer of issuer responsibility within the prescribed 12-month timeframe.

Views of responsible official and planned corrective actions

The pools in question were final certified outside of the 12-month requirement due to mortgages needing to be corrected and re-recorded, or due to not being recorded timely because of delays at county offices. In addition to the challenges presented by COVID-19 shut-downs and recording delays, the ongoing pandemic also created backlogs with agents recording mortgages, processing rejections, and re-recording corrections. Similarly, document custodians continued to struggle with working through document backlogs. These factors resulted in Mortgage being unable to final certify these pools within 12 months. The Final Documents team is fully staffed and has implemented the necessary procedures to obtain the needed documents. While we partner with and work to influence our counterparties in the custody and recording spaces, the operational challenges they experienced that affected the final certification process were outside of our control. Mortgage is committed to doing all that we can to ensure documents are received on time to allow the final certification process to be completed timely and allow us to remain in compliance. Going forward, Mortgage will work with our document custodian to identify if any additional process enhancements can be implemented to improve final certification timeliness.

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