As you are probably aware, CMHC issued a communique to all approved NHA MBS issuers on August 12, 2020 that detailed several accommodations to liquidation rules for pooled loans. More specifically, CMHC is providing issuers with liquidation flexibility for loans with modifications that allow for “deferral arrangements, capitalization, amortization extensions, and temporary interest-only payments.” In order for issuers to keep affected loans in a pool, they must have the capability to meet three specific conditions.
The third condition, the ability to pass through scheduled payments to investors based on the original loan agreement terms, has the biggest impact on users of MortgageHub. In addition, the policy exception concerning 800-series NHA MBS pool liquidations also will have an impact on MortgageHub.
TAO Solutions is currently assessing the impact of these changes and will be posting additional information regarding the timing and substance of changes required of MortgageHub to ensure its ability to conform to these modifications, while still delivering straight-through, automated processing for our clients. While MortgageHub currently supports and keeps a secondary, pool-level amortization for each loan separate and apart from the servicing system values, an early analysis has led us to the conclusion that to best support the new liquidation flexibility rules, changes to both MortgageHub and the issuer’s servicing system data feeds may be required.
Further information regarding implementation details, timing of deliverables, and required changes to servicing system data feeds will be further communicated to clients no later than August 21, 2020. In the meantime, should you have any questions in regards to these changes and TAO Solutions’ response, please do not hesitate to contact your designated account manager.