Five Brothers

Freddie Mac Bulletin 2013-27: Servicing


Bulletin Number 2013-27

December 18, 2013

 

TO: Freddie Mac Servicers

SUBJECTS: This Single-Family Seller/Servicer Guide (“Guide”) Bulletin includes the following updates and revisions to our Servicing requirements:

 

Foreclosure and Alternatives to Foreclosure

  • Revising certain foreclosure requirements, including those related to foreclosure sale bidding
  • Revising the eligibility requirements for Freddie Mac Standard Modifications (“Standard Modifications”) and Freddie Mac Streamlined Modifications (“Streamlined Modifications”) to include Mortgages with pre-modification mark-to-market loan-to-value (MTMLTV) ratios less than 80%
  • Revising disaster-related forbearance requirements when quality right party contact (QRPC) has not been achieved
  • Revising the requirements for the Capitalization and Extension Disaster Relief Modification (“Disaster Relief Modification”) with respect to the determination of the modification terms
  • Updating the Guide to indicate that there are two distinct evaluations for determining a Borrower contribution for a short sale or deed-in-lieu of foreclosure (DIL) for a Borrower who is 31 or more days delinquent
  • Adding a new Freddie Mac Service Loans application (“Service Loans application”) user role for obtaining valuations for short sales

 

Lender-Placed Insurance

  • Revising our requirements for Lender-Placed Insurance (LPI) and adding a definition for this term to the Glossary

In addition to the topics listed above, we are providing further updates, as described in the “Additional Guide Updates and Reminders” section of this Bulletin.

 

 

EFFECTIVE DATE

All of the changes announced in this Bulletin are effective immediately unless otherwise noted.

 

 

FORECLOSURE

Effective for all foreclosure sales occurring on or after March 17, 2014 unless otherwise noted

 

Bidding at foreclosure sale

Servicers will no longer be required to prepare a foreclosure sale bid, referred to as a credit bid, based upon valuations obtained from BPOdirect® for foreclosure sales on eligible Mortgages. Instead, Servicers will order credit bids using a new functionality in the Service Loans application.

 

Credit bids provided to Servicers through the Service Loans application are applicable for First-Lien Mortgages that are not covered by mortgage insurance, not insured by the Federal Housing Administration (FHA), not guaranteed by the Department of Veteran Affairs (VA) or the Rural Housing Service (RHS) or not otherwise subject to a credit enhancement. If the Mortgage is covered by mortgage insurance, insured by FHA, guaranteed by VA or RHS or otherwise is subject to a credit enhancement, then the Servicer must bid an amount approved by the responsible party, unless Freddie Mac has delegations of authority with the applicable party. If conditions exist that would require the Servicer to establish bids for foreclosure sales outside of the requirements provided in Guide Sections 66.43, First-Lien Mortgages Not Covered by Mortgage Insurance, through 66.45, FHA, VA and Rural Housing Service (RHS) Mortgages, then the Servicer must follow the directions outlined in Section 66.42, Delegated Bidding.

 

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