Freddie Mac Updates Servicing Guide
By Anna DeSimone
June 15, 2015, Freddie Mac issued Bulletin 2015-9: Servicing. This newsletter highlights key sections of the bulletin. Please click on the following link to view the 7-page document in its entirety and access the numerous internet links contained in the Bulletin:
Freddie Mac Servicing Bulletin 6.15.15
Outlined below are some of the key changes announced:
Modifications
- The one-year extension of the Home Affordable Modification Program (HAMP®)
- Revised requirements relating to application of HAMP Pay for Performance incentives to principal, additional guidance for handling funds from the Program Administrator and offers to reamortize the Mortgage
- The elimination of the expiration date for the Freddie Mac Streamlined Modification
- A Servicer compensation clarification for certain instances when the modification is the third modification to the Mortgage
- The requirement that all modification agreements in connection with a partial principal curtailment be written, executed by at least the Servicer and provided to the Document
Custodian Foreclosure and Real Estate Owned
- The mandatory use of the Freddie Mac Default Fee Appeal System for submitting appeals of late foreclosure sale reporting compensatory fees
- Servicer reimbursement of “unearned” property insurance premiums under certain conditions
- New monthly Internal Revenue Service Form 1099-C filing reports
- In addition to the above changes, we are making further updates and revisions, as described in the “Additional Guide Updates” section of this Bulletin.
Effective date
All of the changes announced in this Bulletin are effective immediately unless otherwise noted.
Modifications
Home Affordable Modification Program (HAMP) extension
As a result of Treasury and the Federal Housing Finance Agency’s previous announcements of the extension of HAMP, Guide Section C65.4 has been updated to require that all HAMP modifications must have a Modification Effective Date on or before September 1, 2017 and that all evaluations for HAMP must be based on a complete Borrower Response Package submitted on or before December 31, 2016.
Reamortization
In Bulletin 2015-1, we announced a new requirement for Servicers to offer a Borrower who may be eligible for the HAMP Year Six Pay for Performance incentive the opportunity to reamortize the Mortgage, provided the Borrower and Mortgage meet certain conditions. Bulletin 2015-1 announced that Servicers are required to provide at least one written notification to an eligible Borrower the opportunity to reamortize the Mortgage as early as the 120th day and no later than the 60th day prior to the sixth anniversary of the HAMP Modification Effective Date.
To provide Servicers additional time for implementation, we are revising the timing requirements to send the reamortization offer for Mortgages that become eligible for the HAMP Year Six Pay for Performance incentive prior to September 1, 2015. In these instances, Servicers are encouraged to send the reamortization offer to an eligible Borrower in accordance with the requirements in Section C65.9(c), but will be permitted to provide the required written notification no later than 30 days following the application of the HAMP Year Six Pay for Performance incentive. The reamortization offer requirements for Mortgages that reach the sixth anniversary of their HAMP Trial Period Plan Effective Date on or after September 1, 2015 are unchanged.
In addition, Servicers may leverage the Treasury Model MHA Recast Notice when offering potentially eligible Borrowers the opportunity to reamortize the Mortgage in accordance with Section C65.9(c). The notice must be modified as necessary to comply with all Freddie Mac requirements and applicable law. With respect to Borrowers who may have future step-rate increases, Servicers are reminded to specify changes to the Borrower’s payment schedule for each step-rate as a result of the reamortization.
Section C65.9(c) has been updated to reflect this change.
FORECLOSURE AND REAL ESTATE OWNED
Mandatory use of the Default Fee Appeal System for late foreclosure sale reporting compensatory fee appeals
Effective September 1, 2015
In Bulletin 2014-16, Freddie Mac made available the Default Fee Appeal System (DFAS), which enables Servicers to submit appeals of State foreclosure time line compensatory fee assessments.
We are announcing that DFAS may also be used for submitting appeals for late foreclosure sale reporting compensatory fees. Servicers or their authorized Servicing Agents are encouraged to begin using DFAS to submit their appeals for late foreclosure sale reporting compensatory fees prior to September 1, 2015 if they are able to do so; however, Servicers must use DFAS to submit their appeals beginning on September 1, 2015. We will not accept or review appeals of late foreclosure sale reporting compensatory fees through the NPL_Invoices@freddiemac.com mailbox beginning on September 1, 2015.
Additionally, as part of this effort, we have developed a template to submit appeals of late foreclosure sale reporting compensatory fees in bulk. This template is available with upload instructions on the Default Fee Appeal System web page. This will allow Servicers to submit more than one compensatory fee appeal at a time. Section 66.33 has been updated to reflect DFAS.
Please refer to the announcement for additional important information.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
Comments are closed.