Report regarding a Request for Proposal issued by the Texas Department of Housing and Community Affairs for Servicer Oversight Provider and selection thereof
BACKGROUND
TDHCA has utilized Idaho Housing Finance Authority (IHFA) as primary servicer of both bond-funded and TBA mortgage loans since 2016. IHFA is currently servicing $8.6 billion of TDHCA loans. The current IHFA servicing agreement is a “retained servicing” model whereby TDHCA receives some portion of servicing income throughout the life of the loans. As the agreement is drafted, TDHCA also retains exposure to how the servicer manages the portfolio.
The Department has an obligation to ensure TDHCA-originated loans are serviced according to HUD and HFA guidelines. Additionally, as the Department retains risk on the servicing portfolio enhanced oversight is prudent. Audit and review of servicer activities is an industry best practice.
Servicer oversight activities will include a review of IHFA’s historic performance in servicing the Department’s loans, compliance with HUD and HFA guidelines, compliance with internal policies and procedures, and adherence with industry best practices related to timely loan processing, loss mitigation, delinquency management, foreclosures, loan modifications, and second lien recovery.
On April 10, 2024, the Department issued a Request for Proposals (RFP) for firms interested in serving as Servicer Oversight Provider. The RFP had a submission deadline of May 9, 2024. Three proposals were received. A review team of Department staff evaluated the responses, and selected CohnReznick to serve as Servicer Oversight Provider to the Department.
The term of the award is one year, with the ability to renew and extend for one year per renewal, for a maximum of two consecutive renewal years.