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Applying Payoff Funds – Rev 01/15/07 *


Applying Payoff Funds – Rev 01/15/07 [Explained and Applied]


When the foreclosure attorney receives certified funds to payoff an account, a phone call is made to the foreclosure specialist to verify the funds are sufficient to payoff the account. If the funds received are sufficient to payoff the account, the foreclosure attorney will immediately stop the foreclosure proceedings and will forward the funds to the specialist via overnight mail. The specialist must process the payoff the day it is received.







Documentation and CPI Maintenance

When the check is received, the foreclosure specialist will complete the following steps:

FOR2 - the check number and amount of the check are notated on FOR2 as well as a breakdown of how the funds will be applied. The check information is then entered into the payment logbook by the operations specialist and signed for by the foreclosure specialist.

Payoff Request Form - the foreclosure specialist will obtain the payoff quote from the file and complete the payoff request form according to the quote.

BPO - if a BPO was ordered through FHLMC, $95.00 will be credited to suspense so a check can be made payable to FHLMC to reimburse the expense of the BPO.

Asset Loans - On asset loans the FOR2 and FOR3 screens must be reviewed to determine if a BPO was ordered and/or a foreclosure sale date is scheduled. The operations specialist must toss the REO Department Manager to cancel the BPO request indicating the reason to cancel the order. Then notate on FOR2 that the REO Manager was notified.


On FHA loans in investor category 175 the accounts must be reviewed to determine if buyout interest exists. The funds are generated when the loan is bought out of the GNMA pool. The Investor Accounting Department must be notified so they can clear the ledger account.

input FOR1, account number, CORP and enter

review the 3rd party recoverable field on the screen to determine if funds exist

if there is a balance in the 3rd party recoverable field a toss must be generated to notify investor accounting

on toss access for "Buyout Interest Form", indicate account number and if account is being reinstated or paid off

update the FOR2 screen that funds existed in the 3rd party recoverable field and the Investor Accounting Department was notified via toss

Authorization to Process - once all the paperwork has been completed and the system has been documented, the paperwork and check are submitted to payment processing.

Closing Tracking

The next day, the foreclosure specialist will complete the following steps: Refer to QC Review checklist.

verify the account is paid in full by viewing the application of payments and balance on P309.

SAF1 - verify "Paid In Full" stop is a "1" on SAF1.

TSK1 - complete "PMTMSC" task if there is access money in suspense. A check will be prepared made payable to the mortgagors. This task will also be completed if a check will be issued to FHLMC for BPOs.

FOR3 - insert step number 098 (account paid in full).

place a one in the "ACT" field

* Note: Wherever the cursor is placed, the step will be inserted below that point

press enter

type step number in "step" field

type predecessor step number in the "pred" field

type account paid in full and the name of the specialist inserting the step in the "reas" field

press enter

complete the step by typing "C" in the "ACT" field

type date the account paid in full

press enter

FOR2 - document the account has paid in full, tracking will be closed, and the file will be archived.

FOR1 mast - change mancode to the appropriate mancode

FOR1 stat - change status to "C" (completed) and removal code to "08"

Attorney follow-up - the foreclosure specialist will ensure via fax/telephone that the attorney’s invoice has been paid in full and their file has been closed

The foreclosure specialist will monitor the account daily to ensure all balances go to zero. Only then can the documents in the file be transferred.

The documents in the file will then be transferred to a manila file folder. The account number is written on the right side of the file and it is placed in the designated area to be sent to archives.