Guide Bulletin 2011-23 Offers Servicers Greater Servicing Efficiencies
November 18, 2011
To help build greater efficiencies in your servicing operations, we are announcing multiple updates to our requirements in Single-Family Seller/Servicer Guide (Guide) Bulletin 2011-23. Updates to our loss mitigation requirements pertain to deeds in lieu of foreclosure (DIL), short sales, the Home Affordable Modification program (HAMP), and borrower contact under the Servicing Alignment Initiative (SAI). Ultimately, many of the changes in today’s announcement aid your processes that assist at-risk borrowers with avoiding foreclosure.
The requirements in today’s Guide Bulletin have multiple effective dates. It is important that you thoroughly review the details in the Guide Bulletin and our updated Guide Chapters and Forms to fully understand our servicing requirements.
Many updates in the Guide Bulletin provide you with more precise requirements for your loss mitigation activities by:
Eliminating the requirement for borrowers who are 120 days or more delinquent to list their property for sale before becoming eligible for a DIL under Guide Chapter B65, Workout Options. This change will enable borrowers to transition out of their homes more quickly when it is determined that a DIL is the best option for them to avoid foreclosure.
Providing additional guidance on our short sale affidavit requirements for fees paid to parties involved with a short sale transaction, each signatory’s liability, and information that must be included in the affidavit. With this change, you will have more information to identify potential mortgage fraud and a clearer understanding of the intent of all parties involved in the real estate transaction.
Clarifying how to calculate the target payment and current monthly housing expense-to-income ratio for a HAMP trial period plan when a borrower is subject to the Servicemembers’ Civil Relief Act (SCRA) interest rate cap. This important clarification will strengthen your ability to assist eligible servicemembers with a HAMP modification.
The following updates to our SAI borrower contact requirements offer further precision and greater flexibility for your loss mitigation operations by:
Permitting you to send late notices to borrowers on the next business day if the 17th day of delinquency occurs on a non-business day and you are unable to send the notice sooner.
Authorizing you to call delinquent borrowers on the next business day if the day you are required to call falls on a non-business day and you are not open to conduct loss mitigation and collection activities.
Removing the requirement to report the property address in your escalated case reporting spreadsheet.
Additional Guide Bulletin Announcements
It is important that you also thoroughly review Guide Bulletin 2011-23 for a reminder about the Seller/Servicer obligation to maintain mortgage insurance coverage for Freddie Mac’s benefit. This obligation includes responding to requests for information and documentation from mortgage insurers before they issue a rescission or denial of claim to Freddie Mac.
Among other updates and reminders, Guide Bulletin 2011-23 also provides important details on the:
- Servicer and Servicing Agent’s obligations and new Servicing Agent requirements.
- New and updated Service Loans application user roles forms.
- Availability of the Freddie Mac Exclusionary List in the Service Loans application.