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New Reports Available to Reconcile Foreclosure Time Line Compensatory Fees

September 8, 2011

As part of the Servicing Alignment Initiative, Freddie Mac Servicers must soon meet new servicing requirements for foreclosure time lines. As we announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2011-11, mortgages referred to foreclosure on or after October 1, 2011, will be subject to new:

  • State time lines for referrals to foreclosure and foreclosure sales.
  • Foreclosure time line delays.
  • Compensatory fees.

We will assess compensatory fees for failure to comply with time lines plus any allowable delays in order to encourage Servicers to manage foreclosure time lines effectively. Compensatory fees will not be issued if a Servicer’s aggregate amount of monthly compensatory fees is $1,000 or less.

Loans with foreclosure referral dates on or after October 1, 2011, will have compensatory fees assessed and billed monthly on the Servicer Non-Performing Loans Invoice. Monthly billing supports frequent foreclosure time line reconciliations to help quickly address any discrepancies if they occur.

New Foreclosure Time Line Reports

To aid in reconciling estimated foreclosure time line compensatory fees, two new reports are now available in Default Reporting ManagerSM:

  • The Monthly Compensatory Fee Analysis Report, which reflects data for the prior month’s foreclosure sales.
  • The Year-to-Date Compensatory Fee Analysis Report, which reflects data for all foreclosure sales in the current year.

The reports will provide loan-level detail of fee components and estimated compensatory fees.  Each report will also identify a fee type:

  • Annual Billing refers to loans with referral dates prior to October 1, 2011, which will be billed annually in March of each year, beginning March 2012.
  • Monthly Billing refers to loans with referral dates on or after October 1, 2011, which will be billed monthly, two cycles following the foreclosure sale date.

Servicers will have 30 days from the publication date of the Monthly Compensatory Fee Analysis Report to submit an appeal of a foreclosure time line compensatory fee listed on that report.

Reports are now available for existing 2011 foreclosure referrals, and Servicers can begin to review these loans and submit appeals, if necessary.

More Information

For more information on Freddie Mac’s servicing requirements for foreclosure time lines:

  • Attend our two-hour webinar, SAI: Delinquency Management and Foreclosure Time Lines.
  • Review Guide Bulletin 2011-11.
  • Reference new state time lines in Guide Exhibit 83.
  • Review allowable delays to state time lines in Guide Exhibit 83A.
  • Learn about monthly billing and appeals in Guide Chapter 66.32.
  • Review the new foreclosure time line compensatory fee calculation in Guide Exhibit 83A.

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