Announcing Updates to Our Multifamily Loan Documents
April 29, 2013
Updated Versions of Loan Documents Now Available
Last week, Freddie Mac posted revised versions of many of its Multifamily Loan Document forms on our Loan Documents web page, including updated versions of CME, Portfolio, Seniors Housing and Servicing documents.
We made these document changes primarily in response to questions and issues raised by borrowers, Seller/Servicers and their counsel over the past year.The vast majority of the revisions are minor and administrative in nature.
Overview of Changes Based on Seller, Borrower and Counsel Feedback
Among the requested changes we made are the following:
- We revised the definition of what is considered “Borrower Information” required for purposes of securitization indemnification, so that Borrower Information no longer includes any information provided directly to the Lender or the Loan Servicer by a third party, such as an appraiser or an environmental consultant
- We improved the provision addressing the release of liability for Guarantors and Borrowers following an approved transfer by affirmatively providing that these parties are released from all obligations except those relating to environmental matters
- We revised the definition of “Property Manager” so that it now includes successors approved in writing by Lender (which eliminates the need for an amendment to the Loan Agreement each time a property manager changes)
One item for Seller/Servicers and their counsel to communicate with borrowers for loans going forward is the timing of the payment of the fee for extension or modification of a Repair Reserve or a Repair Escrow – it must be paid up-front and is non-refundable, rather than being payable upon approval of the extension/modification.
Most other changes are designed to simplify use of the forms, such as eliminating blanks where possible, providing clearer definitions of some terms, and updating section references.
Detailed Summary of Changes
The attached Multifamily Loan Document Changes Chart summarizes the changes. In addition to this chart, Freddie Mac provided Seller/Servicers’ counsel with redlined drafts showing all of the edits.
Effective Dates For Use of the Revised Loan Documents
The revised documents may be used immediately, but they are not required for any loans for which a commitment is issued (or an ERLA is received) on or before May 24, 2013.
Please contact your counsel if you have any questions about the document revisions.