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Investor Reporting Change Initiative

Frequently Asked Questions – UPDATED MARCH 2018

General

  1. Why are you making these investor reporting changes?
  2. What's the effective date for these changes?
  3. What benefits will this initiative provide me?
  4. Will you be offering training?
  5. What are potential hurdles to implementing these changes?
  6. How will I know if my service bureau is ready to implement these changes?
  7. What month does cutover/migration take place?

Reporting Activities

  1. What is the latest time that Servicers can transmit data on the Principal & Interest (P&I) Determination Date?
  2. When is the P&I Determination ('all-in reporting') Date? Should I include activity through the 15th of the month and submit on the 16th?
  3. If the P&I Determination Date falls on a weekend or a holiday, will it be the next business day?
  4. Can a Servicer report their whole portfolio every day after the P&I Determination Date?
  5. Do we need to continue to report Due Date of Last Paid Installment (DDLPI) in Electronic Default Reporting (EDR)?
  6. With the Investor Reporting Change Initiative, how are full reinstatements impacted?
  7. When do I need to report an EDR reinstatement action code 20?
  8. If I don't report code 40 (inactivation) in the fourth month of delinquency, will Freddie Mac automatically inactivate the loan?
  9. If I report incorrectly on the P&I Determination Date (15th), and make a revision by the end of the month, when will the cash adjustment be made?
  10. If I do not report daily, do I need to report both on the P&I Determination Date and the end of the month?
  11. Will the LLR file format for Investor Reporting change?
  12. How will scheduled interest be reported if multiple principal payments are collected on the same loan in the same cycle?
  13. What is the process to request approval for a reversal of a curtailment if it exceeds $3000?
  14. Do I need to populate the revision indicator when reporting a revision?
  15. Should payments received after the P&I Determination Date through end of the month be reported as revisions?
  16. How should a payment be handled if I receive notification of insufficient funds in a future cycle?
  17. Is there an exception code required for partial reinstatements?
  18. Should Servicers report scheduled interest on newly funded loans?
  19. Will Form 1102: Modified Principal and Interest Payment still be required to report a recast?

Remittance/Drafting

  1. Is Freddie Mac converting all P&I remittance types to the Standard Remittance Cycle for existing loans?
  2. How will we receive Detailed Adjustment Report (DAR) adjustments when drafting is implemented?
  3. Will all payoffs due on a specific day be drafted in aggregate or on an individual basis?

Reports

  1. Will the Seller/Servicer Remittance Analysis Report change?
  2. Will there be a loan-level draft report available daily?

Payoffs

  1. Will any changes be made to the current payoff practices?
  2. Will I be able to reverse a payoff before or after a cycle has closed?
  3. Are there any changes relating to Payoff Accelerated Remittance Cycle (PARC) loans?

Industry (Other)

  1. Will borrower activities be impacted by the changes you're making?
  2. What are the potential impacts if the Single Security Initiative launches prior to your investor reporting changes?
  3. How is the upcoming Single Security Initiative going to work, since Freddie Mac and Fannie Mae securities are currently very different?
  4. What is forecasted scheduled interest?

Technology

  1. How will Servicers who use the Freddie Mac Service Loans application be impacted?
  2. Will the Freddie Mac Service Loans application be converted to real-time processing versus the current overnight process?
  3. Does anything need to be done for the B2B response and draft files if they aren’t needed by the B2B tech provider?

Cutover/Migration

  1. During the May 2019, cutover month when should Servicers begin daily reporting?
  2. During the May 2019, cutover month will there be a 45-day cycle or a 15-day cycle?
  3. How will principal payments reported between the 16th and the end of the May 2019 cutover month be remitted?
  4. Can newly funded loans be reported during the May 2019 cutover month?
  5. Will there be a moratorium on Transfer of Servicing (TOS) requests during the cutover?

Test Planning

  1. If a Servicer has a global servicer ID but also sub-services loans, can the 10 percent test loan population be selected across the global ID and the sub-serviced loans?
  2. Can Servicers/vendors submit files daily during Customer Integration Testing (CIT)?
  3. If a loan selected as part of the 10 percent of the portfolio pays off, can Servicers select an additional loan to replace it?
  4. Will Freddie Mac provide a template for test scenarios?
  5. What reports will be used to reconcile balances at each refresh?
  6. Will payoffs reported during testing appear in the Draft Report?

General

  1. Why are you making these investor reporting changes?

    These changes streamline investor reporting and remitting processes as well as create operational efficiencies for you.

  2. What's the effective date for these changes?

    This is a multi-year initiative that will be fully implemented in May 2019. Stay updated by visiting our web page, and make sure you're signed up to receive servicing news via our Subscription Center.
  3. What benefits will this initiative provide me?

    You'll notice several benefits once these changes are implemented in May 2019, including:

    • Simpler and more flexible investor reporting processes.
    • Greater operational efficiencies.
    • Increased transparency and actionable feedback.
    • A more complete picture of investor reporting data.
  4. Will you be offering training?
    Customer training will begin in Q3 2018, and run through the May 2019 implementation date and beyond. To help you prepare for the upcoming investor reporting changes we’ll provide a robust suite of training tools, including instructor-led webinars, learning clips and reference documents.
  5. What are potential hurdles to implementing these changes?

    This initiative will require changes to your and/or your service bureau's (if applicable) technology, internal processes, and reporting. There may be financial costs to implement the new reporting cycle and remittance process.

  6. How will I know if my service bureau is ready to implement these changes?
    We have directly engaged several service bureaus that work with many of our clients. As your partner in this initiative, we’ll continue to do so throughout the implementation lifecycle. However, as the service bureau is your vendor, we encourage you to reach out to them and begin discussions on these changes directly to ensure that you and your service bureau are ready to implement the change.
  7. What month does cutover/migration take place?
    The cutover month is May 2019. This is when Freddie Mac will cutover/migrate from pre-Investor Reporting Change Initiative to Investor Reporting Change Initiative functionality.

Reporting Activities

  1. What is the latest time that Servicers can transmit data on the Principal & Interest (P&I) Determination Date?
    All transactions must be received by 2:00 a.m. Eastern Standard Time on the day following the P&I Determination Date. On all other days, transactions should be received by 9:00 p.m. Eastern Standard Time.
  2. When is the P&I Determination ('all-in reporting') Date? Should I include activity through the 15th of the month and submit on the 16th?
    With the Investor Reporting Change Initiative, the P&I Determination Date is the date that Freddie Mac will determine the draft of the actual principal that has been successfully reported and the interest due for the current cycle. Each month, Servicers must provide Loan Level Reporting for every loan, on or by, the P&I Determination Date (15th calendar day of the month).
  3. If the P&I Determination Date falls on a weekend or a holiday, will it be the next business day?
    Yes, it will be the following business day.
  4. Can a Servicer report their whole portfolio every day after the P&I Determination Date?
    No, after the P&I Determination Date only updates to loans previously reported should be submitted until the first business day of the next month.
  5. Do we need to continue to report Due Date of Last Paid Installment (DDLPI) in Electronic Default Reporting (EDR)?
    You may continue to report DDLPI in EDR, but Freddie Mac will not use the DDLPI reported in EDR. The DDLPI in Loan Level Reporting (LLR) will be used to determine delinquency.
  6. With the Investor Reporting Change Initiative, how are full reinstatements impacted?
    EDR action code 20 is no longer needed to reinstate a loan. You are encouraged, but not required, to send LLR exception code 50 to reinstate a loan.
  7. When do I need to report an EDR reinstatement action code 20?
    You must report a code 20 in EDR to remove a loan from foreclosure when the loan is still delinquent.
  8. If I don't report code 40 (inactivation) in the fourth month of delinquency, will Freddie Mac automatically inactivate the loan?
    Yes, even if you don't report code 40 in the fourth cycle of delinquency, Freddie Mac will inactivate the loan.
  9. If I report incorrectly on the P&I Determination Date (15th), and make a revision by the end of the month, when will the cash adjustment be made?
    Your draft will be adjusted in the following cycle and will be reflected in your Draft Report.
  10. If I do not report daily, do I need to report both on the P&I Determination Date and the end of the month?
    Servicers are not required, but are strongly encouraged, to report daily. You must report on every loan by the P&I Determination Date. Report any revisions that are made after the P&I Determination Date by the first business day of the following month.
  11. Will the LLR file format for Investor Reporting change?
    No, the file format remains the same.
  12. How will scheduled interest be reported if multiple principal payments are collected on the same loan in the same cycle?
    If there are multiple payments made on a single loan during the month, you must report a revised cumulative transaction which includes all the loan activity for the cycle and the scheduled interest for the next cycle. The monthly scheduled interest amount due will be reported based upon the ending Unpaid Principal Balance (UPB) of the current cycle. 

    Example:

    Current cycle: November
    Borrower payment: Borrower sends payment on 11/1.
    Servicer reporting: Servicer reports to Freddie Mac on 11/2.
    Borrower prepayment: Borrower sends additional monthly prepayment on 11/10.
    Servicer reporting: On 11/11, Servicer reports to Freddie Mac the revised cumulative transaction that includes both principal payments and the next cycle scheduled interest based upon the current cycle ending UPB.
  13. What is the process to request approval for a reversal of a curtailment if it exceeds $3000?
    If the amount is equal to or more than $3,000 you’ll continue to provide your investor reporting representative with the reason for the reversal.
  14. Do I need to populate the revision indicator when reporting a revision?
    No, a revision indicator will no longer be required.
  15. Should payments received after the P&I Determination Date through end of the month be reported as revisions?
    Yes, you are required to report all loan activity that occurs after the P&I Determination Date as a revision in the current cycle by end of month + one business day. When reporting a revision, you must report all data elements related to the transaction, including elements that are not changing.  
  16. How should a payment be handled if I receive notification of insufficient funds in a future cycle?
    For P&I transactions, a negative principal reduction in the next cycle is required to reverse the payment.
  17. Is there an exception code required for partial reinstatements?
    No, there is no exception code for reporting a partial reinstatement. Servicers can report partial reinstatements as regular P&I transactions.
  18. Should Servicers report scheduled interest on newly funded loans?
    Servicers may report scheduled interest in the month of funding. If it is not reported, Freddie Mac will simulate scheduled interest to the servicer.
  19. Will Form 1102: Modified Principal and Interest Payment still be required to report a recast?
    You will no longer need to submit Form 1102 for a P&I recast due to a borrower curtailment. New exception code 91 should be reported to indicate that a recast is requested. The system will validate the data reported and process the recast if it’s accurate. However, Form 1102 will still be required for a step-rate loan with multiple P&I constant changes associated with a curtailment accompanied by a recast.

Remittance/Drafting

  1. Is Freddie Mac converting all P&I remittance types to the Standard Remittance Cycle for existing loans?
    Yes, the Standard Remittance Cycle will apply to all loans serviced for Freddie Mac.
  2. How will we receive Detailed Adjustment Report (DAR) adjustments when drafting is implemented?
    All adjustments will be posted at the loan level on the DAR as well as on the Draft Report. Freddie Mac will draft the net amount due (inclusive of the adjustment).
  3. Will all payoffs due on a specific day be drafted in aggregate or on an individual basis?
    Payoffs will be drafted in aggregate at the Servicer level. The Draft Report will show the loan-level detail for each payoff.

Reports

  1. Will the Seller/Servicer Remittance Analysis Report change?
    The Seller/Servicer Remittance Analysis Report will be eliminated and replaced with the Draft Report.
  2. Will there be a loan-level draft report available daily?
    Yes, a preliminary Draft Report will be available daily in the Service Loans application. The Draft Report will be final for the cycle on the day after the P&I Determination Date.

Payoffs

  1. Will any changes be made to the current payoff practices?
    With the Investor Reporting Change Initiative, all payoffs are for the current cycle. If the loan is performing, only exception interest is due with the payoff. Payoffs will continue to be due on the fifth business day after the mortgage payoff date. Servicers with a negotiated term of business providing a different payoff remittance due date are not impacted by the Investor Reporting Change Initiative; those terms will continue to be effective.
  2. Will I be able to reverse a payoff before or after a cycle has closed?
    You'll be able to reverse a payoff transaction in the current cycle, but no later than the first business day of the new cycle. Once the reporting cycle closes, the payoff cannot be reversed.
  3. Are there any changes relating to Payoff Accelerated Remittance Cycle (PARC) loans?
    The standard payoff due date is five business days after the mortgage payoff date, which has not changed. Non-standard payoff remittance options such as PARC and Flex are unchanged. PARC loans will appear on the Payoff Draft Report on their respective due dates.

Industry (Other)

  1. Will borrower activities be impacted by the changes you're making?
    No, borrower activities will not be impacted by the Investor Reporting Change Initiative changes.
  2. What are the potential impacts if the Single Security Initiative launches prior to your investor reporting changes?
    While they are related, the two initiatives do not require a concurrent launch. Both initiatives are scheduled to be implemented in 2019.
  3. How is the upcoming Single Security Initiative going to work, since Freddie Mac and Fannie Mae securities are currently very different?
    With the Single Security Initiative, we're making changes to our securities to more closely align with Fannie Mae. This will help combine the liquidity of both Enterprises' TBA securities into one large market.

    A major component of our changes will be moving the payment delay on our securities from 45-day to 55-day. Once the Single Security Initiative is launched, each Enterprise will issue new 55-day Uniform Mortgage-Backed Securities (UMBS). Concurrently, we'll offer an exchange feature to permit holders of 45-day PCs to exchange them for a Freddie Mac 55-day UMBS backed by the same loans.

    Freddie Mac will also make other minor changes, including adopting the same security prefixes, pool number format and factor calculation methodology as Fannie Mae. Fannie Mae will adopt a securities disclosure format similar to Freddie Mac’s, with some new data elements – unique to the Single Security – that both Enterprises will use.
  4. What is forecasted scheduled interest?
    When the Investor Reporting Change Initiative is implemented, you will forecast the next month's scheduled interest based on the current cycle Ending UPB.

Technology

  1. How will Servicers who use the Freddie Mac Service Loans application be impacted?
    Servicers using the Service Loans application must review the investor reporting changes and business requirements to evaluate impacts to their organization (i.e. process, financial and operational).
  2. Will the Freddie Mac Service Loans application be converted to real-time processing versus the current overnight process?
    It will not be real-time, but we’ve increased the number of batch jobs that run during the day so information is more current.
  3. Does anything need to be done for the B2B response and draft files if they aren’t needed by the B2B tech provider?
    Freddie Mac is making these B2B files available for service bureaus to consume, and in turn, pass on appropriate data and analytics to their Servicer clients. Freddie Mac is not mandating that service bureaus consume these files but are making them available as a value-added service. If a Servicer/vendor does not wish to receive the B2B response file or draft file, they will need to contact the Customer and Vendor Integration Team

Cutover/Migration

  1. During the May 2019, cutover month when should Servicers begin daily reporting?
    Servicers may begin daily reporting on May 21, 2019.
  2. During the May 2019, cutover month will there be a 45-day cycle or a 15-day cycle?
    The cutover month is a 45-day cycle because borrower activity from 4/16 to 5/31 will be considered May cycle transactions.
  3. How will principal payments reported between the 16th and the end of the May 2019 cutover month be remitted?
    P&I transactions reported on May 16th through May 20th will be remitted via GPI call-in on May 21st. P&I transactions reported on May 21st through June 3rd will be drafted in June.
  4. Can newly funded loans be reported during the May 2019 cutover month?
    Reporting of newly funded loans will be accepted during the cutover month. For any newly funded loans not reported by the Servicer, Freddie Mac will simulate scheduled interest at no cost to the Servicer.
  5. Will there be a moratorium on Transfer of Servicing (TOS) requests during the cutover?
    Yes, TOS will be restricted for three months during cutover. Freddie Mac will not approve TOS requests with an effective date of April 16, 2019, May 16, 2019, or June 1, 2019. On and after May 13, 2019, Servicers can submit TOS requests with an effective date of July 1, 2019. Concurrent TOS will not be impacted by the implementation of the Investor Reporting initiative. For more information, please refer to the Single-Family Seller/Servicer Guide (Guide) Bulletin 2017-15.

Test Planning

  1. If a Servicer has a global servicer ID but also sub-services loans, can the 10 percent test loan population be selected across the global ID and the sub-serviced loans?
    Yes, up to 10 percent can be selected across the Servicer's entire portfolio.
  2. Can Servicers/vendors submit files daily during Customer Integration Testing (CIT)?
    Yes, files can be submitted daily during CIT.
  3. If a loan selected as part of the 10 percent of the portfolio pays off, can Servicers select an additional loan to replace it?
    If a loan selected for testing is paid off it will be removed from the test population. Additional loans will not be allowed to be submitted for testing.
  4. Will Freddie Mac provide a template for test scenarios?
    Yes, please see the recommended Minimum Customer Integration Test Scenarios. Servicers are strongly encouraged to upload their test scenarios to the Freddie Mac Test Document Repository (TDR) after you have received TDR training.
  5. What reports will be used to reconcile balances at each refresh?
    The Trial Balance Report will be available to reconcile balances.
  6. Will payoffs reported during testing appear in the Draft Report?
    Yes, both P&I payments and payoffs that are reported during testing will appear in the Draft Report.

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