Freddie Mac Updates Servicing Guide
By Anna DeSimone
February 3, 2016, Freddie Mac issued Bulletin 2016-2, Servicing. The Single-Family Seller/Servicer Guide Bulletin announces a number of changes pertaining to the following:
- Freddie Mac Servicer Success Scorecard
- Reimbursement
- Mortgage Modifications
- Electronic Default Reporting (EDR) for repayment plans
- Freddie Mac Default Legal Matters
- In the investor reporting category, we are removing the weights, ranks and percentiles from all of the criteria because the number of loans measured is too small compared to the active loan portfolio to provide a statistically meaningful measurement. Performance results in each criterion will continue to be calculated and reflected for applicable Servicers. Performance for the combined peer will also continue to be displayed.
- In the default management category, we redistributed the 5% weight for the “Accuracy of Due Date of Last Paid Installment (DDLPI) Reporting” criterion within the “Data Integrity” subset of criteria to the “Transition to 60+” criterion within the “Loss Mitigation” subset of criteria
Notwithstanding the removal of ranking for the investor reporting category, Freddie Mac retains all available remedies in the Guide for a Servicer’s failure to report timely and accurately. Guide impact: Guide Section 51.11
Reimbursement of expenses and incentive payments via ACH credit entries
Servicers must be set up to receive reimbursement of expenses and payment of incentives via ACH credit entries into their commercial checking accounts by August 1, 2016; however, Servicers are encouraged to elect to receive ACH credit entries as early as possible, if they have not already elected to do so.
To authorize receipt of ACH credit entries, a Servicer must follow the steps outlined in Guide Exhibit 98 and submit the authorization agreement to the address provided. Servicers must submit the authorization agreement at least seven Business Days prior to the mandatory effective date in order to receive expense reimbursements and incentive payments via ACH credit entries on or after August 1, 2016.
As a reminder for Servicers with a subservicing arrangement, while reimbursement of expenses may be credited to the subservicer, payment of incentives will be credited directly to the Servicer and the Servicer will be responsible for providing any funds due to the subservicer in accordance with any applicable subservicing arrangement.
Mortgages insured by the FHA or guaranteed by the VA or RHS
We are updating the Guide to provide greater detail related to requesting reimbursement on Mortgages insured by the FHA or guaranteed by the VA or RHS not subject to recourse or indemnification.
For expense reimbursement to occur following a completed short sale, completed deed-in-lieu of foreclosure, or third-party foreclosure sale on a Mortgage insured by the FHA or guaranteed by the VA or RHS not subject to recourse or indemnification, the Servicer must first file a claim pursuant to Section 70.5 and Freddie Mac must receive the claim payment from the applicable entity. Guide impacts: Sections B65.41, B65.48, 66.37 and 70.5
About the Author
Anna DeSimone is President and Founder of Bankers Advisory and Principal of CliftonLarsonAllen LLP. She can be reached at Anna@bankersadvisory.com.
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.