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The Agency will review the loss claim package from the servicer. Loss claim checks or electronic funds transfer (EFT) payments will be issued to the servicer by the Agency within 60 days of the servicer’s properly filed loss claim. Agency staff will notify the servicer of any additional documentation required and will note it in the loss claim file.
Once all required information is submitted, the Agency must take the following actions:
x Determine whether the servicer has fulfilled all SFHGLP obligations and if not,
whether reduction or denial of the loss claim is warranted.
x Review and approve the loss claim with an Agency designee with appropriate
approval authority.
x Advise the servicer of the PSVC (if applicable) used to calculate the loss claim.
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x Provide appropriate appeal rights for any adjustments, reductions, or denials with
specific reasons and clear explanation for the decision in accordance with Appendix 3 of this Handbook.
x Issue payment.
Payment of the loss claim simultaneously fulfills and terminates the loan note guarantee. A termination notice will be mailed to the designated payee at the time of payment.
A. Reduction or Denial of a Loss Claim
The Agency will review each loss claim for adherence to program regulation and make any reductions and/or denial of loss claim as noted below. The Agency staff will use information provided by the servicer to determine if the loss claim should be adjusted or denied. The Agency must show that any reduction to the servicer’s loss claim corresponds with the servicer’s action or failure to act. This section provides guidance regarding reduction or denial of a loss claim, and when applicable, the specific penalties attached to those factors. Additional information regarding penalties may be found in Appendix 8 of this Handbook.
B. Calculation and Approval of Loss Payment
Agency staff will review the loss claim and supporting documentation submitted by the servicer. Agency staff will document and create a loss claim payment to the servicer. The Agency’s reviewer should contact the servicer if there are questions about the information submitted by the servicer.
C. Loss Claim Payment Process
The Agency will use the following procedures for loss claim processing and disbursement of any loss claim payment.
1. Notification of Loss Payment Amount
The Agency should notify the servicer in writing of the amount to be paid within 60 days of receipt of a properly completed loss claim package. If the loss claim has been reduced or denied, the Agency will provide a clear explanation of its decision, including an analysis of how the amount of any reduction was determined and
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provide notification of appeal rights in accordance with Appendix 3 of this Handbook.
2. Payment and Post Payment Activities
Payments for approved loss claims should be distributed within 60 days of receipt of a properly completed loss claim package. Servicers who participate in electronic funds transfer (EFT) should receive payment within 3 working days of loss claim processing. For all other servicers, a check should be generated and distributed within 3 working days of receipt of a properly completed and submitted loss claim.
3. Review and Appeal Rights.
If a loss claim is reduced or denied, the Agency will notify the servicer of review and appeal rights as described in Appendix 3 of this Handbook. If the servicer seeks to request a review or appeal a loss claim decision, the Agency will pay the approved portion of the loss claim within the time frames described above. Interest will not accrue on any disputed loss amount during the review or appeals process regardless of the outcome of the review or appeal.
4. Supplemental Loss Claims
The agency may allow the servicer to submit one supplemental loss claim in addition to the original loss claim submitted. The supplemental loss claim must be received by the agency within six months from payment date of the initial loss claim. The agency reserves the right to limit the payment of additional interest and expenses. The six-month expiration period may be exceeded if unusual circumstances exist such as a domestic incident as defined by the department of homeland security or when a geographic location in which the property is located has a presidential disaster declaration.
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HB-1-3555 Appendix 1