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FHLMC Update Obtain Credit Bid Functionality Streamlines Foreclosure Sale Bidding

On December 18,  Freddie Mac released an update titled New Obtain Credit Bid Functionality Streamlines Foreclosure Sale Bidding.

New Obtain Credit Bid Functionality Streamlines Foreclosure Sale Bidding

With Single-Family Seller/Servicer Guide Bulletin (Guide) Bulletin 2013-27, we’re introducing our new Obtain Credit Bid functionality that will provide foreclosure sale bids, referred to as credit bids, to Servicers for foreclosure sale bidding. The Obtain Credit Bid functionality is accessible through the Freddie Mac Service Loans application (Service Loans application) and must be used for all foreclosure sales occurring on or after March 17, 2014.

Credit bids obtained through this new functionality are only applicable for:

  • First-lien mortgages not covered by mortgage insurance, unless Freddie Mac has delegations of authority with the Mortgage Insurer, and
  • Mortgages not insured by the Federal Housing Administration, nor guaranteed by the U.S. Department of Veteran Affairs or Rural Housing Service, and
  • Mortgages not otherwise subject to a credit enhancement.

Obtaining Credit Bids via the Service Loans Application
Servicers can now submit a request for a credit bid using the Obtain Credit Bid functionality via the Service Loans application, rather than obtaining valuations directly from Freddie Mac through BPOdirect® to prepare foreclosure sale bids on eligible mortgages. A credit bid will be returned with a “good through date” indicating the length of time for which the credit bid will be valid, and an estimated sale date.

Freddie Mac recommends that Servicers submit a request for a credit bid no less than 30 and no more than 90 days before the scheduled sale date to ensure a credit bid is received in time for the foreclosure sale.

Once a credit bid is returned by the Service Loans application, Servicers must follow the bidding instructions for eligible mortgages:

  • Unless State law requires that an appraisal report be used to set the foreclosure sale bid, start the bid at the statutory minimum not to exceed an amount equal to the lesser of:
    • 100 percent of the credit bid, or
    • Total indebtedness, which includes the unpaid principal balance, accrued interest, escrow advances and expenses, or
    • Such other amount as may be required by State law

Obtain Credit Bid Functionality Benefits
On demand access to credit bids helps streamline the foreclosure sale bidding process. Additionally, the new functionality:

  • Replaces the need for Servicers to obtain property values to prepare foreclosure sale bids in connection with scheduled foreclosure sales for eligible mortgages.
  • Reduces the amount of time that would otherwise be required to enter each loan manually with the bulk import capability.
  • Decreases the need to track multiple and varying foreclosure sale bidding guidelines.
  • Ensures that the Service Loans application is the primary gateway for conducting servicing business with Freddie Mac.

Registering for the Obtain Credit Bid Functionality

To use the Obtain Credit Bid functionality, Servicers must be assigned the user role of FCL – Specialist or FCL – Specialist (Read Only) in the Service Loans application. Servicers should be fully registered and begin submitting credit bid requests at least 30 days prior to foreclosure sales scheduled on or after March 17, 2014.

We’ve updated the appropriate Guide forms with the new user roles.

Visit the Service Loans Application Resource Center for detailed instructions on how to access the new Obtain Credit Bid functionality.

Training and Resources

For More Information

Please click here to view the online update.

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