Helping Borrowers Avoid Foreclosure

Making "Home Possible" involves more than helping people purchase homes; it includes helping homeowners keep their homes whenever possible during financial hardships. As a Freddie Mac Servicer, we rely on you to deploy the servicing solutions that preserve dreams for homeowners and help delinquent borrowers avoid foreclosure and its impact on their credit ratings. As the market and servicing landscape continue to change, now, more than ever, you play a critical role helping borrowers succeed as long-term homeowners.

Freddie Mac is dedicated to helping you keep borrowers in homes they can afford and want to keep. Our default management policies provide you with clear and sound guidance every step of the way, and offer you many options to explore with borrowers who are delinquent on their mortgage payments. As a Freddie Mac Servicer, we ask that you be familiar with our policies and workout options. Here is a quick-click refresher of important main points to remember while helping borrowers who are in default.

• What if a Borrower Cannot Pay Their Mortgage?
• What if a Borrower Can No Longer Afford to Keep Their Home?
• We Reward You for Helping Borrowers

What if a Borrower Cannot Pay Their Mortgage?

• Is the borrower a victim of a disaster?
  If their property has been damaged or destroyed by a tropical storm, hurricane, tornado, flood or other disaster, follow our guidelines for disaster relief.

   

• Is the borrower a service member on, or recently released from, active duty?
  There are special financial relief options in place for service members through the Servicemembers Civil Relief Act (SCRA) and Freddie Mac's own policies.

   

• Is the borrower eligible for a reinstatement, relief option, or workout?
  By exploring options and working with the borrower, you can usually find a positive outcome. Relief and workout options can help the borrower reinstate their mortgage and remain in his or her home, avoid foreclosure, and reduce the impact of delinquency on his or her credit rating.
  • Review our default management quick references, best practices and publications and determine if the borrower is eligible for a partial or full reinstatement, repayment plan, short- or long-term forbearance or loan modification.
  • Refer the borrowers who are in default to our avoiding foreclosure web page so that they can understand foreclosure alternatives.

What if a Borrower Can No Longer Afford to Keep Their Home?

• Is the borrower eligible for a workout mortgage assumption, make-whole preforeclosure sale, short payoff or deed in lieu of foreclosure?
  We recognize that not every borrower who is experiencing financial hardship can retain ownership of his or her home. When a borrower cannot or does not want to keep their property, you can help the borrower understand the benefits of selling their property, avoiding foreclosure and preserving his or her credit rating.
  • Review our default management quick references, best practices and publications and determine if the borrower is eligible for a workout mortgage assumption, make-whole preforeclosure sale, short payoff or deed in lieu of foreclosure.
  • Refer the borrower to our avoiding foreclosure web page so that they can understand foreclosure alternatives.

We Reward You for Helping Borrowers

• Workout Incentives for Servicers
  Our Workout Incentive Program rewards you for the hard work you do to find the right solution for your borrower. The program is designed to
  • Reward you for pursuing workouts
  • Complement our array of cutting-edge default management tools
  • Encourage you to aggressively pursue alternatives to foreclosure
  
  
• Foreclosure Timeline Incentives for Servicers
  Foreclosure is the least favorable outcome for a delinquent mortgage. Even if you have already initiated foreclosure, continue to be alert to the possibility of processing a relief or workout option, and continue to attempt to contact the borrower. Foreclosures are costly to everyone involved, especially the borrower.
  
  If foreclosure is unavoidable, we expect you to contain costs by processing the foreclosure efficiently and timely. To encourage you, we provide incentives for superior foreclosure timeline performance. A foreclosure timeline is the time it takes to process a foreclosure, measured in days from the due date of last paid installment (DDLPI) to the date of the foreclosure sale.