Summary Of HUD’s LEAN 232 Program E-Mail Blast: Office Of Residential Care Facilities (ORCF), February 27, 2014

In an effort to summarize the highlights of the U.S. Department of Housing and Urban Development (HUD) LEAN E-mail Blasts that we receive, and rarely have time to review in a timely fashion, we at Pepper are providing this quick synopsis of the latest LEAN update. Our aim is to provide pertinent information succinctly as a roadmap to the LEAN E-mail Blasts, not to replace the LEAN E-mail Blasts. We hope you find these summaries helpful. A link to the complete February 27, 2014 LEAN Blast can be found here.

New Intercreditor Agreement Is Published

Proposed revisions to the Intercreditor Agreement (Form HUD-92322 ORCF) were published on February 27, 2014 in the Federal Register. A link to the Notice is available here and a link to the Intercreditor Agreement form is available here. Comments on the form and the proposed optional electronic submission of documents are due by March 31.

Multifamily Delinquency and Default Reporting System (MDDR)

The Office of Multifamily Housing Programs released a memo on December 19, 2013, entitled "Guidance for Servicer Watchlist Process."

Once the update to the MDDR system becomes operational, the system will require that loans entered into MDDR be rated as Doubtful, Substandard, Special Mention, or Pass/Watch. The memo outlines characteristics that lenders should consider when determining a project's rating. ORCF intends to revise this language to fit the unique characteristics of Section 232 loans in the future. In the meantime, ORCF requests that lenders use the broad ratings and characteristics outlined in the December 19, 2013 memo and work with the project's Account Executive if there are any questions.

An e-mail was sent by the Office of Multifamily Housing Programs, Asset Management Division on February 26, 2014 to all registered users in MDDR with more details.

Please also note that as a loan approaches the time to assign, it is very important that the default has been timely entered into the MDDR system. Moreover, if the loan is in default (with the lender actively pursuing a workout) and the lender intends to obtain an extension on an election to assign, an e-mail requesting the extension must be sent to the project's Account Executive and Tim Coon (timothy.r.coon@hud.gov).

Global 30-Day Extension to Submit Annual Financial Statements (AFS) for All Owners Whose Fiscal Years Ended 12/31/13

The Office of Housing has authorized a global 30-day extension to all owners whose fiscal years ended December...