Countdown to Annual MPF Certifications: Get Ready for Success
Written by: Heather Papows - Loan Servicing & Secondary Market Consultant
January is in full swing and with that, Participating Financial Institutions (PFI’s) and Servicers of the MPF program are required to submit the Annual Eligibility Certifications (AEC) by the end of this month. Any organization that sold loans into the MPF program or serviced any MPF loans in 2023 must complete this process.
The forms that make up the AEC include the OG1 and OG2 and collect some basic data points on your organization. Additionally, it requires that you answer a series of questions, and that you certify your adherence to several requirements which include:
Compliance with Laws
Compliance with MPF Product Requirements
Compliance with Credit Reporting Requirements
Evidence of adequate Fidelity Bond and E&O Insurance
Compliance with MPF Program Requirements including that you:
Maintain good standing with GSE’s/other investors
Had no unreported material change in business operations or structure
Comply with MERS Membership Agreement (if applicable)
Maintain Anti-Predatory Lending (APL) policies and procedures
Maintain an in-house QC program that is deemed effective, where findings are reported to Senior Management and appropriate action is taken as required
As it relates to the certification for your Quality Control policy, sellers must also provide their most recent QC Summary report for Pre-Closing and Post-Closing reviews. Additionally, if there were any substantial changes to the QC plan, then a redlined version of the plan must also be submitted with the AEC.
In addition to the above, if any exam or audit conducted in 2023 (mortgage operations, origination, or servicing related) resulted in deficiency findings, you will be required to provide a summary of how the findings were identified, addressed, and corrected.
When you are making these certifications, you are speaking on behalf of the entire organization. The underwriters, the decision-makers, the QC team: are you confident in your organization’s adherence based on what you know is in place for policies, procedures, training, and oversight of all processes?
The annual certification process is not intended to be something you come to fear, but rather an opportunity for you (and your MPF Bank) to review and assess the effectiveness of how you operated over the last 12 months. Are you prepared for the road ahead? Do your policies reflect all industry changes, and are your procedures inclusive of internal changes? Are there areas where team members could benefit from additional training? Are your regulatory needs being met by your integrated technology?
Spillane Consulting Associates stands ready to support you in building confidence around this certification process. Whether you have questions about the details of your certification, or you’re preparing to make changes as you embark on 2024, call on your trusted strategic partners for guidance. Contact our Director, Bill Dolan, at WDolan@scapartnering.com or by phone at (617)694-2617 to set up a conversation today.
