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Guide Bulletin 2011-24 Announces Requirements for Participating in HFAs' Modification Assistance Programs

December 13, 2011

To further support your efforts and our mutual commitment to help at-risk borrowers avoid foreclosure, we are updating our requirements for Servicer interaction with state Housing Finance Agencies' (HFAs) mortgage assistance programs in connection with the Hardest Hit Fund initiative. With this update, we are requiring Servicers to participate in HFAs' modification assistance programs as long as the programs meet certain guidelines.

Servicing

As announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2011-24, effective immediately, you must begin accepting modification assistance program funds from participating HFAs on behalf of eligible borrowers with Freddie Mac-owned or guaranteed mortgages. The modification assistance programs are intended to facilitate modifications by providing funds to assist in meeting housing expense-to-income ratio parameters or loan-to-value ratio requirements, or to ensure a more positive net present value result.

In addition to complying with the general Freddie Mac requirements for the HFA unemployment mortgage assistance and mortgage reinstatement programs, review today's Guide Bulletin for requirements on:

• Applying the funds received and, when applicable, advancing them to complete a modification settlement.
• Reporting mortgages that received modification assistance.
• Conducting collection calls and solicitation activities when a borrower is conditionally approved for HFA mortgage assistance.

As a reminder, you must suspend the scheduled foreclosure sale or foreclosure referral for 45 days when the HFA notifies you that a borrower is conditionally approved for HFA mortgage assistance. You must suspend the foreclosure action for a longer period of time if it is required by state law. You may also suspend the foreclosure action past 45 days if it is needed to facilitate the processing of mortgage assistance and receipt of funds, provided that you follow up with the state HFA on a regular basis to determine whether the borrower is still eligible for assistance and when the funds are expected.

Get More Information

• Read Guide Bulletin 2011-24.
• Visit the HFA Mortgage Assistance Programs Web page.
• Refer to Guide Bulletins 2010-25 and 2011-5 for the general Freddie Mac requirements for all HFA mortgage assistance programs.
• Contact your Freddie Mac representative.