Freddie Mac: FHLMC Guide Bulletin 2020-29: Servicing Updates
Investor Update
July 15, 2020
Source: Freddie Mac
• Updates to insurance loss settlement requirements
• Document Custody
• Original Security Instrument requirement removal – August 5, 2020
• Addition of lost note affidavit (LNA) provisions – November 1, 2020
• Clarification on insurance coverage – November 1, 2020
Additional Guide updates and reminders
• Further updates and reminders 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.
INSURANCE LOSS SETTLEMENTS
Based on Servicer feedback, at the direction of the FHFA and in alignment with Fannie Mae, we are updating certain provisions of our insurance loss settlement requirements to expedite the disbursement of insurance proceeds and streamline the inspection process. With this update, Servicers are no longer required to:
• Disburse insurance proceeds via check made payable jointly to the Borrower and the contractor
• Validate that the contractor performing the repairs is licensed or bonded and insured. These updates apply to Mortgages that were current as well as delinquent at the time of loss.
• Perform a final inspection to validate completion of repairs when the Mortgage was current at the time of loss
Additionally, to facilitate Servicer oversight of property repairs and to help overcome scheduling conflicts that may delay the disbursement of proceeds, we are introducing new requirements authorizing the completion of remote loss-settlement inspections* when the Mortgage was current at the time of loss, using borrower-submitted photos or video or servicer-directed video calls with the borrower. Such “remote inspections” may be employed by the Servicer, in lieu of physical inspections, to confirm the progress or completion of repairs at the property.
*These remote inspection requirements do not extend to inspections required to confirm the status of the property after a disaster (Section 8404.2) or inspections triggered by the delinquency of the Mortgage (Section 9202.12).
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