crfs team to attend the upcoming five star conference

The CRFS team is looking forward to the upcoming Five Star Conference and Expo set for September 23-25 in the Big D, Dallas, TX.  If you’d like to connect with us during the event, call or e-mail Jeffrey Clark at 585-590-5422 or

Learn more about the conference here…

Hope to see you there!!

crfs recaps changes with hud mortgagee letter 2019-14

HUD released Mortgagee Letter 2019-14 last week which positions Disaster Loan Modifications and Disaster Partial Claims as a permanent Loss Mitigation Option for Servicers to utilize as part of their Loss Mitigation strategies.  These options were introduced at the beginning of 2018, however they were a temporary program with a sunset date of 5/1/2019.  HUD has now made these a permanent fixture within the Loss Mitigation section of the HUD handbook and they can be utilized immediately, with a required implementation date no later than 11/30/2019.

While CRFS is assuming that these are still non-Incentivized options, we will continue to monitor the situation until such time HUD inserts these items into the actual handbook.  If it appears they are not, we will reach out directly to HUD for clarification and provide additional updates as warranted.

Read the full letter here…

crfs announces departure of co-founder and vice chair jodi gaines

For Immediate Release

August 23, 2019

CRFS Announces Departure of Co-Founder and Vice Chair Jodi Gaines  

Albion, N.Y. – Claims Recovery Financial Services, LLC (CRFS), the mortgage industry’s premier provider of claim filing and recovery services, announced today that Co-Founder and Vice Chair Jodi Gaines has decided to voluntary resign her role with CRFS to pursue other personal and professional interests outside the Company; her resignation is effective immediately.

“The senior leadership team and entire CRFS family wishes Jodi well on her future endeavors,” said Steve Mowers, President of CRFS. “The organization is grateful for Jodi’s lasting commitment to the organization she helped establish and humbled by the legacy she leaves after many years of dedicated service to the company and the community.”

Ms. Gaines and a group of investors founded CRFS in 2002 after recognizing an opportunity to put years of her own experience in the mortgage claims business to work. For the first four months of its existence, Ms. Gaines ran CRFS from her home in Albion, N.Y., processing a few claims for one client. In 2019, more than 200 employees process tens of thousands of claims each month at the Company’s current location. During her tenure, Ms. Gaines helped grow CRFS into one of the largest employers in Orleans County, N.Y. and a leader in post-default claims management solutions industry.

Today, CRFS continues its growth through expanded service offerings and a thriving client base. Considered the largest non-bank processor of government claims in the United States, the Company continues to set the standard in the claims management industry by recovering, on average, more than $2,000 per file for their clients. Clients also turn to CRFS for expertise in FHA, VA, and USDA claims recovery, HUD audit support and consulting services, loss analysis review, portfolio acquisition due diligence, and more.

“CRFS is currently growing at a rapid pace and we remain dedicated to client success and the overall success of the organization and the communities we serve,” said Mowers. “Our growth trajectory is a result of our personal approach to client relationships and our team’s adaptability and unmatched expertise.”

Based in the heart of Albion, N.Y., CRFS is the industry’s largest non-bank processor of post-foreclosure FHA, VA, MI, and investor claims. They also provide consulting and data analytics services. For more information, or to explore onsite and remote career opportunities in claims management, please visit



Jeffrey Clark

Vice President, Director of Sales and Marketing

Claims Recovery Financial Services (CRFS)

231 East Avenue, Albion, NY 14411

crfs provides summary of new FHLMC property management guidelines

On July 15, Freddie Mac implemented updates that eliminated many property management functions which were formerly required of Servicers. These changes are effective for properties with a foreclosure sale held, or deed-on-lieu executed, on or after this date, as well as for properties which are in active REO status as of this date. CRFS has conducted a thorough review of FHLMC’s updates with our analysis results listed below.  FHLMC Bulletin 2019-6 and Bulletin 2019-12 provide full details on this update.

Process Updates:

New non-claimable expenses

Beginning July 15, 2019, the below expense types for loans that have a foreclosure sale date or deed-in lieu date on or after July 15, 2019 should not be claimed. Additionally, any of these expenses which are incurred by the Servicer after the July 15, 2019 effective date should not be claimed.

  • Property Preservation Expenses
  • Property Inspections
  • Property Taxes
  • HOA, PUD, Co-op dues
  • Utilities

Note: There will be loans with foreclosure sale or deed-in-lieu dates prior to July 15th where expenses were already incurred under previous FHLMC directives.  In those instances, expenses incurred post foreclosure/deed-in-lieu can be claimed as long as they were incurred prior to the July 15th effective date.

Insurance updates

Beginning July 15, 2019, CRFS will use the foreclosure sale/deed-in-lieu date to determine if an insurance premium was paid within the claimable timeframe. This change to foreclosure sale/deed-in-lieu date replaces the old process of utilizing the PCC date for REO properties.

CRFS provides comments in response to HUD’s request for feedback on the Single-Family Loan Sale Program (SFLS Program)

In its request for feedback, the FHA indicated that it is particularly interested in public comments addressing the following issues (the CRFS feedback, which was delivered to HUD the first week of July, is reproduced below):

 3.0 Obstacles, Benefits, and Drawbacks

3.0.1 FHA Single Family Loan Sale Servicers

(1) What obstacles exist to participation in the Program and how can those obstacles be addressed?

  • Some Servicers feel that the criteria is too restrictive and eliminates more files than one would expect in terms of eligibility.
    • This actually was a deterrent for one Servicer in particular, where they decided to only participate in one of the sales as a result of the fallout they experienced.
  • The unpredictable sales schedule creates staffing and management issues. The industry would like a schedule created to provide better planning and scheduling.
    • This would help HUD as well due to their claims team not having sufficient staffing when the sales come up. It causes them to shift necessary resources to the sale, which in turn puts the other items they were working on behind, which is an unintended consequence with the current setup. (i.e. further delays the supplemental claim payments)
  • The changing criteria from sale-to-sale has been difficult to manage within the short window of time from when it’s released to when the criteria and lists begin to get submitted.

 (2) What factors are relevant to the decision to submit loans for claim payment through the Program versus alternative assignment options?

  • SFLS program is much easier than routine conveyance route with ICC and title requirements.
  • SFLS is typically less upfront costs and risk for the servicers.

(3) What, if any, monetary costs have been or will be incurred through program participation, including but not limited to, administrative and overhead costs?

  • IS/BA resources to pull reporting based on criteria eligibility to identify initial loan population and report the initial population to HUD.
  • IS/BA resources to re-validate the initial loan population remains eligible based on criteria and provide updated file to HUD confirming the eligible population and loans to be removed. (Approximately 1 month time lapse between initial reporting to HUD and update reporting.)
  • Claim filing resources to complete SFLS claims on loan population within a max 60 day window from sale date.
  • Default reporting resources to continue reporting SFDMS events (Must report from the month the loan is identified for inclusion in the sale until either (1) Loan no longer qualifies or (2) SFLS claim has been filed.
  • Coordination resource with the BPO Company to order and procure BPO’s on all properties included in the sale, delivering them electronically to HUD upon completion.
  • Document Procurement Resources to gather required Loan Servicing Comments, Payment Histories and Loan Collateral and Mortgage documents.
  • Resource to complete the Assignment/Endorsement requirements for each loan within the sale as well as the Goodbye Letters.
  • Resource coordinating the service transfer date to the new servicer, communicating with HUD what that date is and ensuring timely delivery of the Mortgage and Collateral files to the New Servicer upon the service transfer date.
  • Sufficient staff to comply with the Post-Claim Servicing responsibilities until the loan transfers to the New Servicer.
  • Invoicing resource to recoup advances incurred during the Post-Claim Servicing period from the New Servicer.
  • Servicers cost to participate, primarily BPO expenses, when HUD determines they are pulling a pool or loans that fall out of the program.
  • Loans that had claims filed under SFLS program (EDI’s) but fall out after the claim filing, the next claim process will be delayed until insurance is reinstated and due to technology constraints, a 2nd EDI is not possible resulting in manual claim submission and delayed payment by HUD.

(4) What challenges have been or will be encountered in assigning and delivering loans to the Program?

  • Tight timeframes, resource availability, access to the data, access/availability of BPO professionals
  • With inconsistent scheduled sales, the volumes tend to be higher than if loans could be submitted routinely through the program.
  • With previous sales, we’ve saw where the published sale start date for claim submission will be delayed; however, the end date has not been extended with that change in the start date.
  • The maximum interest that HUD will pay is 30 days following the eligible claim submission start date; however, you have a full 60 day window to actually file the claim. We feel the maximum interest payment should align with the maximum claim filing window.

(5) What are the benefits to participating in the Program?

  • Additional liquidation option for the Servicer, allowing the default asset to be moved out of the inventory at a quicker pace.
  • Homeowners have more flexible Loss Mitigation options with the new servicer which aren’t as confined to HUD’s requirements

(6) What are the greatest drawbacks involved in participating and filing assignment claims through the Program?

  • The repurchase portion of the sales are too open ended, causing many times the request to come back to the Mortgagee years after the same has taken place.
    • A few Servicers have had loans come back 2-3 years after the fact and HUD Asset Sales advises that they usually side with the purchaser even when the servicer shows there is no basis.
  • The unwind process when a loan falls out of the sale is difficult for the Servicers. They struggle with getting the insurance reinstated and being able to obtain a value for what is owed in order to bring the MIP’s back current.
  • Short timeframe adds stress to normal operations which at times results in unfavorable actions in order to meet deadlines. (i.e. HUD disallowing claimable costs on the initial claim payment, requiring more supplemental claims to be filed in order to recoup.)
    • FHA typically has a backlog of supplemental claims and are already a year behind, loan sales will cause that population to fall further behind.

(7) How and why, if at all, have any program participants changed, modified, or discontinued participation due to unanticipated consequences or drawbacks?

  • Inconsistent eligibility requirements and irregular sale timing makes it difficult for participants to staff accordingly and further, to properly manage the portfolio’s and disposition strategies.
    • Eligibility criteria should be adjusted to minimize the effect on servicers Administrative Issues

(1) Resources:

(a) What FHA-supplied resources or assistance (e.g. program support) do servicers require for participation in the Program as an alternative claim payment mechanism?

(b) What resources would be helpful?

  • An automated process for supplemental claim submissions.
  • Resources dedicated to the program with specific POC’s for the program participants.
    • FHA should have a designated person available to answer servicer questions pertaining to loan sales timely.
  • Dedicated HUD resources on error code resolution and supplemental payment (under current manual supplemental process).

 (2) Planning process:

(a) Beginning with the initial planning phase, what amount of time is needed by servicers to implement any necessary changes in procedures, protocols, computer programs, or technology platform, etc. to enable participation in the Program?

  • The amount of time needed varies depending on the volume and substance of the changes being made from sale to sale; however, a minimum of 90 day lead time to review differences between PSA’s is requested.

 (b) What are the steps in the process and how long will each take?

  • When new PSA’s are released, a review needs to be completed to determine the changes and impact it will have on the current work processes established.
  • Reporting will need to be developed or altered in order to meet any new or changing requirements with the eligibility criteria.
  • Routine change management protocol would need to be followed, ensuring all applicable resources and affected areas are updated on the sale and any changes which impact their specific functions and areas.

(3) Administrative obstacles:

(a) What administrative obstacles exist to participation in the Program (e.g. reallocation of personnel and resources, reprogramming and reconfiguration of computer of other systems)?

  • Resource allocation is definitely a challenge. SFLS sales require a shift in resources to ensure all sale deadlines within the PSA are met. These resources range from a variety of departments and areas which are needed to ensure all criteria and steps are met timely with no defects.

(b) How can those obstacles be addressed?

  • Having more routine and regimented sales that are held to a schedule will allow for the better planning and allocation of the required resources. With the current schedule of sporadic sales, it doesn’t allow for the planning of staff availability at all times.

(4) Post-Sale Servicing considerations:

                (a) What obstacles were encountered in servicing loans post-sale?

  • HUD doesn’t opine on any disagreements within the ISA’s between the Servicers and new Purchasers.
    • A few Servicers who have went to HUD in these instances advised the Asset Sales office advised them that it’s a contract between the Servicer and New Buyer, so they’re really not involved, leaving those participating parties to work things out.
  • Receiving payment from the new purchaser for advances that occurred during the interim servicing period can be difficult at times. This is definitely dependent on the buyer; however, some servicers have sent communications to HUD as a request to not allow particular buyers to participate in future sales due to the difficulties they’ve experienced.
    • Contractual language to ensure timely reimbursement
    • No indefinite contract clauses relating to servicers having to dedicate a lot of resources to remediate conflict.

3.1 Community Impacts

(1) What benefits has the Program provided communities?

(2) What, if any, adverse effects has the Program had on communities?

(3) What changes, if any, in the sale structure, loan eligibility criteria, or post-sale requirements on purchasers would improve community impacts? What are the policy trade-offs (e.g. potential adverse impact on bid pricing) of such changes?

  • Expanding the criteria to include properties with surchargeable damages. These are properties that the Servicers are struggling with getting into ICC or qualifying for a CWCOT, this would allow those properties to be put back into the communities much quicker.
  • Broader range for loss mitigation options

crfs releases summary on recent Fannie Mae Servicing Guide, LoanSphere Invoicing, and Servicer Expense Reimbursement Job Aid updates

In April 2019, Fannie Mae updated its Servicing Guide, LoanSphere Invoicing, and the Servicer Expense Reimbursement Job Aid.  SVC-2019-02 provides the updated Servicing Guide Topics and a brief description of the updates.  The LoanSphere Invoicing 19.3 Release Notification provides the updates to LoanSphere Invoicing.  CRFS has conducted a thorough review of all of the updates made.  A majority of the updates do not represent a change to CRFS procedures.

Below are topics we have identified that require changes to CRFS procedures, as well as topics of note that clarify Fannie Mae requirements.

Procedure Updates:

We have identified that the following require changes to CRFS procedures:

1.  Allowable Foreclosure Attorney Fees Matrix update

The maximum allowable attorney fee limit increased for the following states, effective for loans in active FC on or after April 10, 2019.

  • New Hampshire
    • Non-Judicial FC allowable increased from $1,450.00 -> $1,725.00
  • Maine
    • Judicial FC allowable increased from $2,750.00 -> $3,950.00
    • An additional $200 allowable fee for processing a third-party foreclosure sale added
  • Washington
    • New allowable Judicial FC allowable of $3,050.00 for e-Note foreclosure actions; these do not need prior approval from FNMA. All other FC actions need prior approval

2.  New Vacant Property Registration Admin Fee

Fannie Mae added the Vacant Property Registration Admin Fee to LoanSphere to claim municipality admin fees related to listing a property on a database of local vacant properties. This line item is available as of April 10, 2019.

3.  New fields on line items

New fields were added to LoanSphere on April 7, 2019:

  • Paid Date field – Added on all line items, and is an optional field. Effective June 15, 2019, this field is required for Tax Expenses and Insurance Expenses
  • Tax Paid Amount field – Added on all Tax Expenses, and is an optional field
  • Tax Parcel field – Added on all Tax Expenses, and is an optional field

4.  Pending Submitter Review (PSR) Status

Effective May 1, 2019, Claims remaining in PSR status for 60 days, which are not locked and do not have a Pending Validation or a Failed to Validate tag, will be auto-denied.

  • All line items set to pay on the claim will be changed to zero
  • The denial comment and reason will be “Denied – Failure to respond within Fannie Mae guide timelines

Clarified Items:

1.  Foreclosure Sale Date Clarifications

Multiple Guide Topics were updated to clarify that:

In applicable jurisdictions, when a foreclosure is completed by court order without a foreclosure sale (such as a foreclosure-by-consent or a strict foreclosure), the date of the court’s order is entered on the docket, or the estimated court order docket date when applicable, must be used in place of the foreclosure sale date.

This may be implemented immediately, but must be implemented by July 1, 2019.

crfs provides summary of recent Changes HUD is Making to the Single Family Housing Policy Handbook

On March 27th, 2019, the Federal Housing Administration (FHA) published an update to its Single Family Housing Policy Handbook 4000.1 (SF Handbook). The Transmittal provides the Handbook Sections and a brief description of the updates.  CRFS has conducted a thorough review of all of the updates made to the Servicing and Loss Mitigation Section as well as the Claims Section.  A majority of the updates do not represent a change to CRFS procedures. Many of the updates incorporate previously published policy or provide additional clarity.

We have determined that the following sections require changes to CRFS procedures or require clarification from HUD due to discrepancies with other policy or direction.

Procedure Updates:

1.    IV Claims and Disposition, 2. Claim Types, a. Claim Type 01- Conveyances

Attorney’s Fees

The following has been added to this section:

The Mortgagee may claim no more than 75 percent of the maximum attorney fee for incurred fees associated with routine foreclosure that was not completed because any of the following occurred after the Mortgagee initiated foreclosure:

  •     The Borrower executed a DIL of Foreclosure; 
  •     The Borrower successfully completed a PFS; or
  •     The Borrower filed for a bankruptcy petition.

HUD will reimburse allowable attorney fees in accordance with HUD guidance pertaining to the reimbursement of foreclosure costs.

As a result of the addition to the Handbook, CRFS recommends a change of this procedure to claiming 75% of the attorney fee allowable for incomplete valid foreclosure actions.


2.    III: Servicing and Loss Mitigation, 2. Default Servicing, K. Home Retention Options

FHA- HAMP Incentive

The updated Handbook version was updated to include a new validation requirement (third bullet) when determining the eligibility for HAMP Incentive eligibility.

The Mortgagee may claim an incentive for use of the FHA-HAMP Option if:

  •    The permanent FHA-HAMP documents are executed within 60 days of the borrower’s successful completion of their TPP; and
  •    The mortgagee reports to HUD the characteristics of the FHA-HAMP Loan Modification; and
  •    Three or more full monthly payments are due and unpaid (i.e. 61 days or more past due) when the FHA-HAMP documents are executed

CRFS procedure will be updated to validate all of the above requirements for filing an incentive claim prior to submitting the claim.


3.     III. Servicing and Loss Mitigation, 2. Default Servicing, I. Home Disposition Options

PFS Owner Occupant Borrower Compensation

The updated Handbook includes PACE obligation as an acceptable use of the compensation:

The Owner occupant borrower may apply the entire amount of $3000 compensation or a portion of it to resolve liens, including a PACE obligation

 DIL Borrower Consideration

The updated Handbook includes PACE obligation as an acceptable use of the compensation.

The Owner- Occupant borrower may apply the entire amount of the consideration or a portion of it to resolve liens, including PACE obligation liens.

 CRFS procedure will be updated to validate that any PACE lien amounts paid are offset with the borrower compensation/consideration when applicable.

CRFS Delivers White Paper on Revitalizing Communities at Recent New York MBA Event, Offers Free White Paper Download

CRFS Co-founder Jodi Gaines delivered a White Paper as part of the New York Mortgage Bankers Association’s recent Forum on Revitalizing Communities and Forging New Partnerships. The event provided a starting point for positive discussion on revitalizing communities and minimizing the impact of zombie properties, and featured experts in the fields of fast-track foreclosure law, property preservation, mortgage loan servicing as well as elected officials and community stakeholders. Neighborhood reinvestment platforms and tools to rehabilitate properties in New York were explored in the workshop that was attended by an engaged audience interested in improving communities throughout New York.

The potential solutions discussed in the event and detailed in the White Paper are applicable not just to communities in New York State, and the options available should be of interest to mortgage servicers throughout the country.

To download a copy of this complimentary resource, please complete the form below and click the “GET MY FREE DOWNLOAD” button.

Thank you for your interest

  • This field is for validation purposes and should be left unchanged.

CRFS Recaps Changes VA is Making to the VALERI System

The VA is moving the VALERI system to a new platform that will be available May 28th, 2019. The transition to the new platform will greatly impact the VA claims submission process, so we would like to share the transition timeline we have received.

  • April 1st : last round of post audit selections until after the new platform is launched. Tentative date to resume is July 1st.
    • Higher volumes can be expected once the process does resume since the selection will include the full time period
  • April 27th : claim processing and appeals will not be available until the May 28th go-live date
    • VA expects that any claims that will become 365-days-due within this time period are submitted before April 27th
  • May 15th : TOC’s will not be generated until the May 28th go-live date. VALERI will be read-only during this time period.
    • Any TOC’s due within this time period can be appealed within a week of the go-live date. We recommend that any loans that have termination events completed before May 15th are referred immediately to avoid late TOC’s.
    • After the May 28th go-live date, events cannot be reported manually. This means that TOC events will be submitted the using the Bulk Upload Template.
  • The VA is expecting that servicers will be able to begin the process for obtaining access to the new platform before the go-live date and is targeting May 1st. Individual users will need to be set-up with access by a company administrator and we are recommending that be completed before the go-live date.

The VA will continue to share information and updates as we get closer to the transition date, and would like to remind servicers that they host a Monthly Servicer call on the second Thursday of each month. If you do not have this on your calendar, you may reach out to the VALERI Help Desk to request an invite at

CRFS will continue to monitor the updates as well and will communicate updates as they are received.

CRFS Details Value of CWCOT at MBA Servicing Conference & Expo

CRFS co-founder Jodi Gaines moderated a blue ribbon panel of experts on the value and importance of the FHA’s CWCOT program at the recent MBA Servicing Conference & Expo.

Initiated in 2015 under “ML 14-24,” the Mortgagee Letter became effective for all foreclosure sales associated with defaulted FHA-insured mortgages scheduled on or after February 1, 2015.  There are several compelling advantages to the non-conveyance asset disposition route for investors and servicers including:

  • HUD reduced losses
  • Servicer / Investor reduced losses
  • Money received quicker
  • Less out-of-pocket expenses
  • Less interest pass-through if still in pool
  • Avoid reconveyance
  • Reduced overhead

And the financial impact of CWCOT is also significant, as evidenced by the below data compiled by the CRFS Analytics Team:

Claims Filed in 2018
  Conveyances Non-Conveyances
Share of all liquidations 33.37% 66.63%
Days from last paid installment to resolution 1226 974
Property Preservation costs $5,160.75 $1,334.10
Property Preservation losses $3,658.58 $640.29
Other losses (e.g., foreclosure filings, legal fees) $5,847.86 $3,071.17


Sale Held & Claims Filed in 2018
  Conveyances Non-Conveyances
Share of all liquidations 12.72% 87.28%
Days from last paid installment to resolution 715 874
Property Preservation costs $2,340.55 $882.39
Property Preservation losses $1,041.67 $363.16
Other losses (e.g., foreclosure filings, legal fees) $3,819.80 $2,097.19

To learn more about how CRFS can help you capture the benefits of CWCOT, please contact Jeffrey Clark at or 585.590.5422.