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REFINANCE GOVERNMENT-HELD LOANS
Some Government-held loans--both current and delinquent--carry
interest rates above current market rates. As an alternative
to selling them, financial services are needed to assist agencies
in refinancing these loans for the loan holders.
This might reduce the financial burden on the
loan holders, bring some delinquent loans current, and remove
some loans from the agencies inventory. Loan refinancing would
generate considerable proceeds for the Federal Government.
When required by a task order, the contractor
may be required to facilitate the refinancing of current and
delinquent Government-held loans. A task order may include services
similar to the following tasks:
- Assess feasibility of refinancing unsubsidized loans with
insured or conventional financing.
- Assess feasibility of refinancing subsidized loans through
State Housing Finance agencies or by some other means.
- Assess feasibility of refinancing delinquent loans by recasting
the loans and lowering debt service to bring loans current.
- Apply agency underwriting standards for project income and
expenses and physical condition to assess feasibility of refinancing.
- Assess methods for lowering transaction costs and encouraging
mortgagors to refinance, even at the same interest rate, including
cost-effectiveness of an agency purchase of a blanket commitment
of refinancing funds.
- Recommend any modifications to current agency rules or procedures
needed to facilitate refinancing, including the development
of simplified refinancing procedures.
- Assess individual proposals for refinancing which are unique
or differ significantly from current agency policy guidelines,
analyze their value to the agency, and make recommendations,
as appropriate, for revision of agency policies and procedures.
- Assist the agency with subsidy layering reviews.
- Provide technical assistance on the restructuring of agency-held
or insured project loans, including assessing workout proposals,
mortgage modifications, bond refinancing, and partial payments
of mortgage insurance claims proposed by owners.
ENFORCE CREDITOR’S RIGHTS UNDER
THE LOAN
The contractor may be required to assure that borrowers
comply with all of the terms and conditions of the loan. Agencies
may issue task orders that may require, but are not limited
to the following types of tasks:
- Review the condition of the loan collateral. Promptly notify
the ordering agency on any actual knowledge that any mortgaged
property, or any part thereof, is out of repair or is deteriorated,
or if any strip waste is suffered or committed, or is damaged
by fire or other casualty or cause.
- Review and report upon the status of all reserves or escrow
accounts that the borrower is required to maintain at defined
intervals.
- Review loan covenants and enforce them directly or through
prompt referral to the Government agency.
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