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Guide Bulletin 2012-13 Announces Process Updates Affecting Servicers

June 13, 2012

You now have more flexibility to service Freddie Mac-owned mortgages through process refinements included in today's Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-13. These changes allow for expanded state foreclosure time lines and simplified operational and reporting procedures. Because precision in your approach to foreclosure avoidance is critical, we also provide additional guidance on loss mitigation toolkit options when assisting homeowners.

Expanded State Foreclosure Time Lines

Allowable foreclosure time lines have been increased in 12 states for loans referred to foreclosure on or after October 1, 2011, and in 34 states for loans referred to foreclosure before October 1, 2011. These time lines are effective for all foreclosure sales completed on or after January 1, 2012. In addition, we added new time frames and expanded existing time frames for allowable delays. These changes, including the new effective date, reflect the realities of today's foreclosure processing requirements, allowing you additional time to complete the required work. As a result, you may be able help more borrowers avoid foreclosure and reduce foreclosure time line compensatory fee assessments.

Foreclosure Time Line Compensatory Fees

We have changed the calculation for state foreclosure time line compensatory fees and billing process for mortgages referred to foreclosure on or after October 1, 2011, when the foreclosure sale occurred on or after January 1, 2012. We are temporarily suspending state foreclosure time line compensatory fee assessments on your Non-Performing Loans Invoice beginning with your July invoice for June activity. We will notify you when this assessment will resume. It is important that you read additional details about the billing, systems, and operational components of the foreclosure time line changes, including impacts to submitting exterior property inspection reimbursements claims, in the article posted on our Single-Family News Center. 

Operational Procedures

To address common Servicer questions, Guide Bulletin 2012-13 provides the following additions and clarifications to certain operational procedures:

  • For non-real estate owned (REO) expense reimbursements, we are adding a specific time frame for reimbursement of taxes that were incurred and paid to a taxing authority. The time frame is up to 12 months prior to the due date of last paid installment through the payoff date, provided the Servicer complied with our existing tax monitoring, advances, and escrow requirements.
  • We are allowing wire transfers for REO-related remittances.
  • We are clarifying the time frame for sending to your Document Custodian either a fully executed modification agreement or, if the modification agreement is recorded, a certified copy of the fully executed modification agreement and the modification agreement that is ultimately returned by the recorder's office.

Performance and Reporting

  • Because of the automatic stay under bankruptcy law that stops the foreclosure process and impacts effective communications with borrowers in bankruptcy, we are excluding these homeowners from your quality right party contact performance measurements in your Servicer Success Scorecard.
  • In order to provide Servicers access to a complete statement of our mortgage fraud requirements, with Guide Bulletin 2012-13, we are adding Guide Chapter 57, Fraud Prevention, Detection and Reporting, to Volume 2 of the Guide. This Guide chapter is identical to Chapter 7 in Volume 1 of the Guide. We encourage Servicers to review the requirements and read our Single-Family News Center article for more information on reporting mortgage fraud.

Loss Mitigation

We are emphasizing that a borrower's level of delinquency should not be taken into consideration when determining the length of the short-term unemployment forbearance plan if the unemployed borrower is being considered for short-term unemployment forbearance. This additional information addresses common Servicer questions and can help facilitate smoother eligibility assessment and discussions with struggling homeowners. Read our Single-Family News Center article that provides an additional overview of this option and other recent updates we made to other loss mitigation solutions we currently offer in the Guide.

In addition to the topics above, review today's Guide Bulletin for information about:

  • Accessing the new Servicing Mature Balloon/Reset Quick Reference Guide and specifying that there are no changes to servicing requirements for balloon/reset mortgages originated on acceptable Fannie Mae balloon documents.
  • Adhering with revised Mortgage Electronic Registration System® Rule 14, where Freddie Mac Servicers are required to manage "Legal Filings" on our behalf.
  • Updating cross-reference information for our electronic transactions and electronic documents guidance.

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