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, 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
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 unemployed?
If a borrower is experiencing a financial hardship due to unemployment, they may be eligible for short-term unemployment forbearance, which suspends or reduces an eligible borrower’s mortgage payments for a period of six months, with the possibility of extended unemployment forbearance for up to an additional six months.
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
- Our Servicer incentives reward you for the hard work you do to find the right solution for your borrower. Incentives are designed to
- Reward you for pursuing workouts
- Encourage you to aggressively pursue alternatives to foreclosure
- Complement our array of default management tools