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FHLMC Guide Bulletin 2014-4 Revised Requirements for Modifications

On March 28, Freddie Mac issued Guide Bulletin 2014-4 regarding revised requirements for standard and streamlined modifications.

Today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-4 announces revised requirements for Freddie Mac Standard and Streamlined Modifications.

Updated requirements for mortgages with pre-modification mark-to-market loan-to-value (MTMLTV) ratios less than 80 percent

Here’s what you need to know:

  • Requirements are effective July 1, 2014 , but you may implement them sooner.
  • You must offer eligible borrowers the following three modification options in their Trial Period Plan Notice:
    • A 480-month payment term, if the estimated modified principal and interest (P&I) payment is less than or equal to the current contractual P&I payment.
    • A 360-month payment term, if the estimated modified P&I payment is at least 20 percent less than the current contractual P&I payment.
    • A 240-month payment term, if the estimated modified P&I payment is at least 20 percent less than the current contractual P&I payment.
  • Working with customers:
    • Borrowers no longer have the option to request a different payment term or change the payment term after the first Trial Period payment is made.
    • The borrower’s modification term is determined by their first Trial Period payment. Their payment term will be equal to the shortest term that’s covered by their first payment.
  • Reminders:
    • As announced in Guide Bulletin 2014-3, the requirements included in Guide Bulletin 2013-27 for Standard and Streamlined Modifications for mortgages with pre-modification MTMLTV ratios less than 80 percent are now optional.
    • You must include both the estimated modified P&I payment and required monthly escrow amounts in Trial Period payments. There are certain exceptions where escrow amounts are not required in Trial Period payments. See Guide Sections B65.12.1(g), B65.12.2, and B65.21(d) for more information.

We’ll notify you in future communications when Workout Prospector® is able to process pre-modification options for MTMLTV ratios less than 80 percent.

Freddie Mac Standard Modification Interest Rate

Effective July 8, 2014, Freddie Mac will evaluate market rates on a monthly basis to determine whether a change to the Standard Modification interest rate is necessary. If the interest rate changes, the new rate will be posted on the Freddie Mac Standard Modification Interest Rate Web page by the fifth business day of each month. You must implement the new rate for Trial Period Plan evaluations conducted on or after the tenth business day of the same month, but no sooner. Evaluating the rate on a monthly basis ensures that we provide appropriate payment relief for qualified borrowers who need mortgage assistance in the form of a home retention option.

Please refer to Guide Bulletin 2014-4 for details on these servicing requirements.

Important Reminders

  • EarlyIndicator® retired – As of March 29, 2014, Freddie Mac will no longer offer our EarlyIndicator software, as announced in our April 5, 2013 Single-Family News Center article.
  • New Quick Reference: Borrower Notification Requirements for Step-Rate Mortgages – Review our quick reference for guidance on notifying borrowers of interest rate and related payment adjustments for step-rate mortgages. Beginning April 1, 2014, Servicers are required to provide borrowers with two notifications prior to the first scheduled payment at the new rate as well as a notification prior to subsequent interest rate and related payment adjustments. We announced these requirements in Guide Bulletin 2014-1.
  • Online self-service password reset – We’ve implemented a new online password reset capability for Single-Family business applications that require a user ID and password. Click here for more information.

Get More Information

 

About Safeguard 
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.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties