FHLMC Guide Bulletin 2014-3 Servicing Updates and Revisions
On March 17, Freddie Mac released Guide Bulletin 2014-3 regarding servicing updates and revisions.
Servicing Updates and Revisions Announced in Guide Bulletin 2014-3
In Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-3, we’re announcing updates and revisions to support existing requirements and improve several servicing processes:
- Certification of compliance with the Lender-Placed Insurance requirements announced in Guide Bulletin 2013-27 [PDF]. Servicers must send the completed Lender-Placed Insurance Compliance Certification form [PDF] to Freddie Mac’s Lender-Placed Insurance mailbox by April 30, 2014.
- Revised alternatives to foreclosure requirements, including:
- Upcoming changes to Freddie Mac Standard and Streamlined Modification for mortgages with mark-to-market loan-to-value (MTMLTV) ratios <80 percent, based on your feedback. You do not need to implement requirements by April 1, 2014, as announced in Guide Bulletin 2013-27 [PDF]. We’ll issue updated requirements and a new effective date in the near future.
- Eliminating duplicative borrower communications. Effective June 1, Freddie Mac will no longer send adverse action letters to borrowers. Only Servicers need to notify borrowers when their workout or relief option requests are declined. This will reduce confusion for borrowers since Servicers and Freddie Mac previously sent duplicative notices.
- Enhancing reporting on property valuations. We’re reorganizing our property valuations requirements for modifications, making them easier to follow in a user-friendly format. Also, while we announced plans to retire the Automated Valuation Model (AVM) Collateral Values Report in Guide Bulletin 2013-20, we will continue publishing the report.
- Providing additional guidance related to our paystub requirements for income documentation submitted with a Borrower Response Package. In response to Servicer feedback, we’re adding detail regarding the number of paystubs required depending on payment frequency.
- Updated transfer tax requirements to support you, effective immediately:
- We’ll reimburse you for transfer taxes when certain conditions apply.
- We’re allowing you to foreclose in Freddie Mac’s name, without needing to obtain our approval, to avoid any obligation to pay a required transfer tax.
- Additional Guide updates
In addition to the changes listed above, we’re making further updates, including:
- Providing more guidance related to bankruptcy cramdowns and foreclosure sale bidding, to help you stay in compliance.
- Updating Electronic Default Reporting requirements from Guide Bulletin 2014-1 [PDF] and property preservation requirements.
- Requiring Servicers to screen mortgages for Office of Foreign Assets Control compliance and notify Freddie Mac if they identify a match.
Please refer to Guide Bulletin 2014-3 for full details on these updated Servicing requirements and effective dates.
Reminders: Important Upcoming Effective Dates
- Obtain Credit Bid
Effective for all foreclosure sales occurring on or after March 17, 2014, you must order credit bids using the Obtain Credit Bid functionality in the Freddie Mac Service Loans application. Servicers should sign up for webinar training for more information.
- Step-Rate Mortgages Borrower Notifications
We added communication time line requirements for notifying borrowers of interest rate adjustments for Step-Rate Mortgages. Read Guide Bulletin 2014-1 [PDF] for more information.
- Home Affordable Modification Program (HAMP®) incentives increase, “Pay For Success” incentives retire:
For mortgages with HAMP modification effective dates on or after April 1, 2014, we’re increasing the Servicer incentive by $500 if the modification is completed in accordance with the Guide. Read Guide Bulletin 2013-14 [PDF] for more information.
- Servicers will no longer be eligible to receive a “Pay for Success” incentive for any HAMP modifications with modification effective dates on or after April 1, 2014. Read Guide Bulletin 2013-17 [PDF] for more information.
Online Password Reset
Finally, we implemented a new online password reset capability for Single-Family business applications that require a user ID and password. We encourage you to create your user profile as soon as possible. We will announce a mandatory adoption date in the future. Read our Single-Family News Center article for more details.
Get More Information
- Review Guide Bulletin 2014-3 [PDF] and Guide archives.
- Download the Lender-Placed Insurance Compliance Certification form from Freddie Mac’s Servicing Alignment Initiative Web page.
- Visit Freddie Mac’s Learning Center for additional information on our servicing training programs and references tools.
- Access the AVM Collateral Values Report.
- Contact your Freddie Mac representative.
Please click here to view the online update.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.