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Q&A for Servicers

  1. Whom can I contact with questions regarding the Servicer Selection Form or how to use the Servicer Attorney Tracking System (SATS)?
  2. Are there approved attorney fees and title expenses?
  3. Will Freddie Mac provide guidance on whether a law firm meets the minimum requirements (e.g., law firm staffing ratios, capacity, references etc.)?
  4. May we engage a third party to perform the due diligence on our behalf?
  5. What are Freddie Mac’s expectations of Servicers when documenting their due diligence of whether a law firm meets the minimum requirements?
  6. The requirements state that direct referrals to trustees for foreclosure are not permitted in any jurisdiction. What is reason for the prohibition of direct referrals to trustees? Can a law firm select a trustee and refer foreclosures to a trustee?
  7. Can a subservicer submit a Servicer Selection Form for a law firm the subservicer will use on a master Servicer’s portfolio, or does each master Servicer need to submit a Servicer Selection Form for each law firm?
  8. If a law firm receives a "no objection" determination and has a contract with one of the GSEs, does the "no objection" and contract apply to both GSEs?
  9. If Freddie Mac objects to a law firm, will you provide a reason?
  10. Is there an appeal process where an objection is raised?
  11. If Freddie Mac issues an "objection" determination, is there a waiting period before a Servicer can submit the law firm to Freddie Mac again?
  12. If Freddie Mac objects to a law firm, does that prohibit the Servicer from hiring the law firm?
  13. If Freddie Mac makes a “no objection” determination and enters into a retention agreement with a law firm, can Freddie Mac later terminate a law firm?
  14. Does Freddie Mac provide a standard template for the contract between the Servicer and a law firm?
  15. May Servicers attend the attorney training?
  16. Will Servicers be able to see law firm reporting in the Attorney Data Reporting (ADR) system?
  17. How will the Servicer know if the law firm is reporting timely and accurately to Freddie Mac?
  18. Will Freddie Mac notify the Servicer when a law firm has completed training?
  19. How do I determine the foreclosure bidding requirements?Updated
  20. What has to be reported to Freddie Mac? Are there any changes?
  21. What is non-routine litigation, and when does Freddie Mac have to be notified of non-routine litigation?
  1. Whom can I contact with questions regarding the Servicer Selection Form or how to use the Servicer Attorney Tracking System (SATS)?
  2. Are there approved attorney fees and title expenses?
    Exhibit 57A, Approved Attorney Fees and Title Expenses, provides the maximum allowable amounts Freddie Mac will reimburse Servicers for attorney fees related to foreclosure, DIL and bankruptcy, for all reimbursement claims submitted on or after August 1, 2013.
  3. Will Freddie Mac provide guidance on whether a law firm meets the minimum requirements (e.g., law firm staffing ratios, capacity, references etc.)?
    Whether a law firm meets a minimum requirement is an independent business determination that must be made by the Servicer based upon the firm size, structure, and the amount of files the Servicer expects to refer to the law firm.
  4. May we engage a third party to perform the due diligence on our behalf?
    A Servicer may use a third party to assist with due diligence for law firm selection; however, Freddie Mac will hold the Servicer responsible for its certification that the law firms meets the firm minimum requirements.
  5. What are Freddie Mac’s expectations of Servicers when documenting their due diligence of whether a law firm meets the minimum requirements?
    Documentation of the due diligence of law firm selection is a matter of individual business determination. See Guide Section 69.3 for the Firm Minimum Requirements.
  6. The requirements state that direct referrals to trustees for foreclosure are not permitted in any jurisdiction. What is reason for the prohibition of direct referrals to trustees? Can a law firm select a trustee and refer foreclosures to a trustee?
    In order to mitigate legal risk, Freddie Mac has determined that only a law firm may be selected to be responsible for and oversee the foreclosure process.
  7. Can a subservicer submit a Servicer Selection Form for a law firm the subservicer will use on a master Servicer’s portfolio, or does each master Servicer need to submit a Servicer Selection Form for each law firm?
    A subservicer can submit a Servicer Selection Form for a law firm it intends to use on a master Servicer's portfolio; however, the master Servicer is responsible to Freddie Mac for its obligations under Guide Chapter 69 and will be held liable for any losses suffered by Freddie Mac caused by a law firm selected by a subservicer.
  8. If a law firm receives a "no objection" determination and has a contract with one of the GSEs, does the "no objection" and contract apply to both GSEs?
    No, the GSEs will make independent "objection" or "no objection" determinations.
  9. If Freddie Mac objects to a law firm, will you provide a reason?
    No, the GSEs will provide only the “objection” or “no objection” determination.
  10. Is there an appeal process where an objection is raised?
    There is no appeal process from an objection determination; however, a Servicer may submit a law firm for a new "objection" or "no objection" determination.
  11. If Freddie Mac issues an "objection" determination, is there a waiting period before a Servicer can submit the law firm to Freddie Mac again?
    Freddie Mac does not require a particular waiting period for a subsequent law firm submission following an "objection" determination.
  12. If Freddie Mac objects to a law firm, does that prohibit the Servicer from hiring the law firm?
    A Servicer may hire the law firm to handle non-Freddie Mac matters.
  13. If Freddie Mac makes a "no objection" determination and enters into a retention agreement with a law firm, can Freddie Mac later terminate a law firm?
    Yes; Freddie Mac can terminate its retention agreement with a law firm and also instruct a Servicer to terminate a firm with respect to Freddie Mac matters.
  14. Does Freddie Mac provide a standard template for the contract between the Servicer and a law firm?
    No, Freddie Mac will not provide a standard template.
  15. May Servicers attend the attorney training?
    Yes, Servicers may take Freddie Mac’s Web-based law firm training, which is available on the Default-Related Legal Services Web page and on the Freddie Mac's Learning Center. Servicers must have a Servicing Application User ID password to access the tutorials.
  16. Will Servicers be able to see law firm reporting in the Attorney Data Reporting (ADR) system?
    No, Servicers will not be able to see law firm reporting in the ADR system.
  17. How will the Servicer know if the law firm is reporting timely and accurately to Freddie Mac?
    If reporting issues arise, a Freddie Mac representative will notify the Servicer.
  18. Will Freddie Mac notify the Servicer when a law firm has completed training?
    Yes, Freddie Mac will notify the Servicer when a law firm has completed training.
  19. How do I determine the foreclosure bidding requirements?Updated
    Refer to Guide Section 66.27, When to Obtain a Credit Bid for Foreclosure Sale Bidding for how to obtain a valuation and Guide Sections 66.26, Delegated Bidding and 66.29, First Lien Mortgages Not Covered By Mortgages Insurance or Subject to Credit Enhancements for how to set the foreclosure bid amount.
  20. What has to be reported to Freddie Mac? Are there any changes?
    Servicers will continue to report using the electronic default reporting system. Servicers must submit Form 104SF, Statement of Loan, Workout and REO Expenses and Income, for all files in order to receive reimbursement. Freddie Mac will provide updates to the reimbursement of attorney fees and costs in a future Guide Bulletin.
  21. What is non-routine litigation, and when does Freddie Mac have to be notified of non-routine litigation?
    Non-routine litigation generally is a contested action in which the borrower alleges case-specific defenses or issues, which, if successful, would create negative legal precedent beyond the immediate case. For examples of what constitutes non-routine litigation, please refer to Guide Section 67.17. As of November 9, 2012, the Servicer or its counsel must notify Freddie Mac at Nonroutine_litigation@freddiemac.com within two business days or sooner, if circumstances warrant, of a non-routine matter.

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