Actuarial Review Services

Sources Sought Notice The Department of Housing and Urban Development (HUD) is issuing this sources sought synopsis as a means of conducting market research to identify parties having an interest in and the resources to support this requirement for Actuarial Review Services. The result of this market research will contribute to determining the method of procurement. The applicable North American Industry Classification System (NAICS) code assigned to this procurement is 524298. There is no solicitation at this time. This request for capability information does not constitute a request for proposals; submission of any information in response to this market survey is purely voluntary; the government assumes no financial responsibility for any costs incurred. If your organization has the potential capacity to perform these contract services, please provide the following information: 1) organization name, address, email address, website address, telephone number, and size and type of ownership for the organization; and 2) tailored capability statements addressing the particulars of this effort, with appropriate documentation supporting claims of organizational and staff capability. If significant subcontracting or teaming is anticipated in order to deliver technical capability, organizations should address the administrative and management structure of such arrangements. The government will evaluate market information to ascertain potential market capacity to 1) provide services consistent in scope and scale with those described in this notice and otherwise anticipated; 2) secure and apply the full range of corporate financial, human capital, and technical resources required to successfully perform similar requirements; 3) implement a successful project management plan that includes: compliance with program schedules; cost containment; meeting and tracking performance; hiring and retention of personnel and risk mitigation; and 4) provide services under a performance based service acquisition contract. Based on the responses to this sources sought notice/market research, this requirement may be set-aside for small businesses or procured through full and open competition, and multiple awards may be made. Telephone inquiries will not be accepted or acknowledged, and no feedback or evaluations will be provided to companies regarding their submissions. Submission Instructions: Interested parties who consider themselves qualified to perform the above-listed services are invited to submit a response to this Sources Sought Notice by September 1, 2020 2:00 PM Eastern Standard Time. All responses under this Sources Sought Notice must be emailed to franklin.f.gunn@hud.gov. Additional information on the required services is listed below. If you have any questions concerning this opportunity, please contact: Franklin F. Gunn via email. Background: The Secretary of HUD has a statutory obligation to obtain an independent annual Actuarial Study (Study or - Studies) of the FHA Mutual Mortgage Insurance Fund (MMI or - Fund), and to report to Congress annually on the financial status of the Fund. The purpose of this procurement is to seek the services of a Contractor to build the next generation actuarial study models to produce the Actuarial Reviews of the mutual Mortgage Insurance Fund. The current contract awarded to Pinnacle Actuarial Resources, Inc. is Fixed Price type contract with a performance period of 06/16/2020 through 04/15/202. General Description of Work: The scope of work under the contract consists of the following: Produce a written Actuarial Study both for Forward and HECM that provides actuarial central estimates of MMI economic net worth as of the end of the subject fiscal year and assesses HUDs estimates of economic net worth. The Studies should include (a) recommended adjustments to underwriting standards, program participation, or premiums, (b) an evaluation of the quality control procedures and accuracy of information utilized in the process of underwriting loan guarantees, and (c) a review of the risk characteristics of loans based not only on borrower information and performance asociated with loans originated or funded by various entities or financial institutions. These discussions may suggest topics and areas of FHA credit perf warrant new research. Apply the final Forward actuarial model to the existing portfolio to produce conditional (and cumulative) claim, prepayment, and loss-given-default rates at various levels of aggregation across loans, and for individual policy years and policy year-quarter. Apply the final actuarial HECM model to the HECM part of the MMI portfolio to produce conditional termination rates, timing of assignment, and recovery rates and amounts, by policy year and budget/endorsement year cohort, and by sub-cohort levels defined by policy initiatives and other characteristics. To promote transparency of the Studies assessments, the Studies should identify methodological vulnerabilities that may occur in its actuarial models or in HUD's analyses of economic net worth. The Studies should include historical data on changes in program terms as well as relevant loan and borrower characteristics (e.g., credit scores, loan-to-value ratios) by cohort and other sub-populations. The contractor will use the most recent President's Budget economic assumptions as the baseline economic forecast for the Studies. However, in addition to the central single path economic forecast, the Studies should test alternative economic forecasts for stress-testing and sensitivity analysis to estimate ranges of reasonableness. To provide comparability to HUD estimates of economic net worth, the contractor will comply with Federal Credit Reform Act discounting assumptions and procedures. This Studies should use stochastic or Monte Carlo simulations of future economic conditions including for interest rates and house price appreciation. The objective of these requirements is to illustrate the sensitivity of forecasts to economic uncertainty and other forms of forecast error. Provide econometric appendices to the Studies that include variable specifications and statistical output from all regressions in the Studies. Contemplated performance metrics: 1. The contractor will use the most recent President's Budget economic assumptions as the baseline economic forecast for the Studies. However, in addition to the central single path economic forecast, the Studies should test alternative economic forecasts for stress-testing and sensitivity analysis to estimate ranges of reasonableness. 2. To provide comparability to HUD estimates of economic net worth, the contractor will comply with Federal Credit Reform Act discounting assumptions and procedures. 3. This Studies should use stochastic or Monte Carlo simulations of future economic conditions including for interest rates and house price appreciation. The objective of these requirements is to illustrate the sensitivity of forecasts to economic uncertainty and other forms of forecast error. Provide econometric appendices to the Studies that include variable specifications and statistical output from all regressions in the Studies. Contemplated report requirements: The Contractor shall produce an Annual Independent Actuarial Study of the FHA Mutual Mortgage Insurance Fund. The report shall recommend adjustments to underwriting standards, program participation, or premiums, if necessary, to ensure that the Fund remains financially sound. The report shall also include an evaluation of the quality control procedures and accuracy of information utilized in the process of underwriting loans guaranteed by the Fund. Such evaluation shall include a review of the risk characteristics of loans based not only on borrower information and performance, but on risks associated with loans originated or funded by various entities or financial institutions. Contemplated dollar value of the project: NA Contemplated place of performance: The Contractor shall perform the independent study off-site at the