Summary Of HUD’s LEAN 232 Program E-mail Blast Office Of Residential Care Facilities (ORCF), August 28, 2013

In an effort to summarize the highlights of the LEAN E-mail Blasts that we receive, and rarely have time to review in a timely fashion, we at Pepper Hamilton are providing this quick synopsis of the latest LEAN update. Our aim is to provide pertinent information succinctly as a roadmap to the LEAN E-mail Blasts, not to replace the LEAN E-mail Blasts. We hope you find these summaries helpful. A link to the complete August 28, 2013 LEAN Blast can be found here.

Completion of Critical Repairs

ORCF has received an uptick in requests to allow critical repairs to be completed post-closing. ORCF wants to remind Lenders that critical repairs identified in the PCNA report must be repaired prior to HUD’s endorsement of the note. Non-critical repairs, approved by HUD, may be completed after closing per the Non-Critical Repair Escrow Agreement.

Updated Instructions for CMS Database - Nursing Homes with National Fire Protection Association (NFPA)-13 Non-Compliant Sprinkler Systems

Per the April 29, 2013 E-mail Blast, CMS requires all nursing homes be fully protected by sprinkler systems, per the 1999 Edition of the NFPA-13 Standard for the Installation of Sprinkler Systems, by August 13, 2013. Instructions on how to search the CMS database were included, but CMS has recently changed their Web site, so please use the instructions here to search the new database.

Updated Instructions for Loan Modification Submissions to ORCF

ORCF has created a new e-mail address to submit the increasingly popular loan modifications. Lenders are instructed to e-mail all future Loan Modification applications to ORCFLOANMODIFICATION@HUD.GOV.

From the Closing Corner

Don’t Forget the Closing CD

As mentioned in the November 18, 2011 E-mail Blast, ORCF introduced a new method to obtain critical documents for each project following closing – The Transaccess Process. Lender’s counsel are reminded to follow the requirements at the top of the new closing checklist and send a complete CD of the closing binder to the address set forth in the checklist. Lender’s counsel should notify the closer when the CD has been submitted.

Procedures for Newly Discovered Litigation and UCCs

Please keep in mind that searches should be run and analyzed by the Lender no earlier than 30 days before closing and no later than five business days before closing. Lenders must disclose to HUD any newly discovered litigation, or UCCs that will not be released in connection with closing. Any issues must be cleared by ORCF and OGC prior to closing.

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