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Upcoming Servicer Training for New Extended Payoff Quote Option and New Calculation Method for Cash Mortgages

February 27, 2014

Important Notice as of April 24, 2014

New Training and Effective Dates: We have rescheduled our Servicer training for the extended payoff quote option and the transition to a "9/96 yield maintenance calculation method" for May 15 and May 22.  Use of the “9/96 Yield Maintenance method” is mandatory, and the extended payoff quote option is available, for all payoff quotes submitted to Freddie Mac on or after June 2, 2014.

Servicers interested in finding out more about this new extended quote payoff option and the calculation of yield maintenance premiums should register for one of the webinar sessions listed below.

Payoff Process Improvements Webinar
Thursday, May 15
2:00 – 3:00 pm ET
Register for Session 1

Payoff Process Improvements Webinar
Thursday, May 22
2:00 – 3:00 pm ET
Register for Session 2

Important Notice as of February 28, 2014

Training and Implementation Postponed: We are continuing to assess the related changes to this option; therefore, we are postponing the implementation of the Extended Loan Payoff Option and the revised calculation method for yield maintenance, as well as the training webinars mentioned in the article below. We will send an email alerting you to the new implementation date and training webinars when they become available. Please accept our apologies for any inconvenience this may have caused.

On April 1, 2014 we will be offering our Servicers and their borrowers a new option for extending the time period for which the payoff calculation quote is valid from the current five business days to up to 10 business days. Extended quote periods will not extend into the following month.

This longer time period will provide more flexibility for borrowers to complete the payoff with the applicable quote. In order to make this process improvement available, we will be updating the current Loan Payoff Notice form on our website to include a new section for this Extended Payoff Quote option, also creating a shorter, more industry-standard Borrower Authorization form to go with it.  To assist with this rollout, we are conducting Servicer training via webinars on Thursday, March 13 and Wednesday, March 19.

Transitioning to Using “9/96” Yield Maintenance Method

The webinar training will also cover the transition from having the option to use what we refer to as the “7/93 Yield Maintenance method” for calculating the number of months remaining in the yield maintenance period, to now only using what we refer to as the “9/96 Yield Maintenance method.” The 9/96 Yield Maintenance method is consistent with how we calculate the number of months remaining in the yield maintenance period for our mortgages intended for securitization, and with industry-standard practice.

Register Today for One of Two Upcoming Training Webinars

Servicers interested in finding out more about this new extended quote payoff option and the calculation of Yield Maintenance premiums should plan to attend one of the webinar sessions listed below.  Once Servicers have been trained and we have updated and posted all the new forms to our website on April 1, Servicers and their borrowers may begin using this new payoff quote option.  Use of the “9/96 Yield Maintenance method” is mandatory for all payoff quotes submitted to Freddie Mac on or after March 20, 2014.

Payoff Process Improvements Webinar
Thursday, March 13
2:00 – 3:00 pm ET
Session 1

Payoff Process Improvements Webinar
Wednesday, March 19
2:00 – 3:00 pm ET
Session 2

We want to thank you for your support as we introduce these important loan accounting payoff enhancements that you and your borrowers requested. Once they’re fully implemented we expect you will find that these changes provide more flexibility and a simplified process for authorizing an extended payoff quote option and calculating payoffs in a more timely and consistent manner.

For additional questions, please contact your loan accounting representative or send an email to: mfla@freddiemac.com.

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