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Freddie Mac New Mortgage Servicing Requirements FAQs

The following are answers to frequently asked questions about Freddie Mac's new Mortgage Servicing Requirements. They provide additional guidance, but are not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide (Guide), the terms of your Master Agreement and/or Master Commitment, or other Purchase Documents.

For complete requirements, review the associated Guide Bulletins and Chapters.

General

  1. Where can I get more information on the Consumer Financial Protection Bureau (CFPB) rules?
  2. If Servicers comply with Freddie Mac Guide requirements, are they necessarily in compliance with CFPB regulations?

Collection Efforts

  1. How will a Servicer know when to use Guide Chapter 63, Delinquency Management on Mortgages Secured by Primary Residences, versus Guide Chapter 64, Delinquencies?
  2. What is the difference between Guide Chapter 63 and Guide Chapter 64 in terms of collection efforts?
  3. Should a Servicer send the borrower solicitation package for mortgages secured by Primary Residences by day 35 or by day 45?
  4. If a Servicer receives a Borrower Response Package (BRP) on a mortgage secured by a Primary Residence prior to January 10, 2014, does the Servicer follow the requirements announced in Guide Bulletin 2013-21 or requirements effective prior to January 10, 2014?
  5. Can Servicers acknowledge the receipt of the BRP by sending an email to the borrower?
  6. What are Freddie Mac’s expectations regarding documenting a property as a "Primary Residence"?

Appeals

  1. What actions must a Servicer take in response to a borrower’s appeal on a First Complete BRP?
  2. What do I do with delinquent interest and other arrearages that accrue during the appeal process?
  3. How have the Evaluation Model Clauses changed?
  4. What if the borrower becomes 120 days delinquent during the appeal process?
  5. Do appeals apply to liquidation options? Or is this only for retention workouts?
  6. Since the hierarchy places Home Affordable Modification program (HAMP) before Freddie Mac Standard Modification (Standard Modification), if we approve a borrower for HAMP, does that mean that they have been denied for a Standard Modification even though we haven't actually evaluated them for it?
  7. What are the circumstances in which a borrower does not have a right to appeal?

Borrower Information Requests

  1. What should a Servicer do if a borrower requests information on the owner/assignee of their loan under Real Estate Settlement Procedures Act (RESPA)?

General

  1. Where can I get more information on the Consumer Financial Protection Bureau (CFPB) rules?
    Visit the CFPB website or review the CFPB Mortgage rules at a glance chart that contains the final rules, compliance aids, and other resources.
  2. If Servicers comply with Freddie Mac Guide requirements, are they necessarily in compliance with CFPB regulations?
    While Freddie Mac has established our servicing requirements in an effort to ensure our requirements are not in conflict with the CFPB final rule, should a specific requirement in the Freddie Mac Guide conflict with applicable law, the Servicer should comply with the applicable law and notify Freddie Mac of the conflict.

Collection Efforts

  1. How will a Servicer know when to use Guide Chapter 63, Delinquency Management on Mortgages Secured by Primary Residences, versus Guide Chapter 64, Delinquencies?
    Servicers must first determine if the mortgage is secured by a Primary Residence, and/or whether the borrower submitted the First Complete Borrower Response Package (BRP).
  2. What is the difference between Guide Chapter 63 and Guide Chapter 64 in terms of collection efforts?
    The requirements for collection efforts are the same, except for the referral to foreclosure requirements for mortgages secured by Primary Residences, and mortgages where the First Complete BRP is received. Servicers are reminded that the First Complete BRP has been defined as the First Complete BRP received on a mortgage secured by a Primary Residence on or after January 10, 2014.
  3. Should a Servicer send the borrower solicitation package for mortgages secured by Primary Residences by day 35 or by day 45?
    Generally, Freddie Mac requires Servicers to send the borrower solicitation package during the 31st through 35th day of delinquency. To the extent that a borrower solicitation package was not sent by day 35 because the Servicer made Quality Right Party Contact and obtained a commitment from the borrower to cure the delinquency, the Servicer should check with their own counsel to determine if any additional notices are required by applicable law to be sent to the borrower by day 45, such as the new CFPB early intervention notice.
  4. If a Servicer receives a BRP on a mortgage secured by a Primary Residence prior to January 10, 2014, does the Servicer follow the requirements announced in Guide Bulletin 2013-21 or requirements effective prior to January 10, 2014?
    Servicers must consult with their legal counsel.
  5. Can Servicers acknowledge the receipt of the BRP by sending an email to the borrower?
    You must acknowledge receipt of the BRP in writing; however, you have the discretion to choose which written method you use (e.g., regular mail, email).
  6. What are Freddie Mac’s expectations regarding documenting a property as a "Primary Residence"?
    If the property was delivered to Freddie Mac as a Primary Residence as determined by occupancy type at origination, you must assume that the occupancy status is unchanged unless you have information confirming the property is no longer the Primary Residence.

Appeals

  1. What actions must a Servicer take in response to a borrower’s appeal on a First Complete BRP?

    Full requirements are in Guide Section 63.3(d), Evaluation Requirements and Appeals Process in Response to First Complete Borrower Response Package.

    The Servicer must respond to the borrower within 30 days of receipt of the appeal:

    • If the original offer stands:
      1. Confirm the original offer, and
      2. Give the borrower 14 days to respond to accept or deny the original offer

    OR

    • If there was an error with the original decision:
      1. Offer the borrower the original alternative to foreclosure, provided the borrower remains eligible, as well as the new alternative to foreclosure offer. 
      2. Give the borrower 14 days to respond to accept or deny either the original or new offer. If an offer requires submission of a payment for the purposes of legal acceptance, the borrower should be given 14 days to indicate their intent and submit payment no later than the 1st of the month in which the payment is due.
  2. What do I do with delinquent interest and other arrearages that accrue during the appeal process?
    Reinstatements: Revise the original offer to reflect the increased amounts due.

    Repayment Plans: If the borrower did not accept the original offer during the appeals process, revise the original offer to reflect a new due date to commence the repayment plan and increase the supplemental monthly payment and total monthly payment as necessary.

    Trial Period Plans: If the borrower did not accept the original offer during the appeals process, reissue the original offer with a new first Trial Period Plan due date. The Servicer may either revise the Trial Period payment amount and first payment due or keep them the same provided the Servicer applies the same method consistently to all similarly situated borrowers for the Freddie Mac mortgages it services. However, at the time of modification, delinquent interest and other arrearages that accrue during the appeal process should be capitalized in accordance with the Guide.
  3. How have the Evaluation Model Clauses changed?
    Guide Exhibit 93, Evaluation Model Clauses, has been updated with optional language to be used only when a Servicer is required by law to notify the borrower of the reason(s) for denial of a Home Affordable Modification Program (HAMP) or Freddie Mac Standard Modification Trial Period Plan and the borrower's right to appeal. For the Freddie Mac Standard Modification Trial Period Plan, Servicers must use the appropriate model denial reason. We will provide additional updates in a future Guide Bulletin to the Standard Short Sale and Standard Deed in Lieu model clauses.

    The right to appeal may only be provided once during the life of a mortgage secured by a Primary Residence and is limited to the Servicer's decision on the First Complete BRP that arrives on or after January 10, 2014. If a Servicer chooses to use the model clauses, they are required to amend them as necessary to comply with applicable law, remove embedded instructions to the Servicer, choose the appropriate bracketed language, and complete any blanks as appropriate and in compliance with our Guide.
  4. What if the borrower becomes 120 days delinquent during the appeal process?
    You cannot take any legal actions in the foreclosure process during the appeal process; delay referral or ensure foreclosure counsel does not take the first legal action until the appeals process has expired.
  5. Do appeals apply to liquidation options? Or is this only for retention workouts?
    The borrower can appeal the denial of a modification as long as the decision to offer a liquidation option was based on an evaluation of the First Complete BRP.
  6. Since the hierarchy places Home Affordable Modification program (HAMP) before Freddie Mac Standard Modification (Standard Modification), if we approve a borrower for HAMP, does that mean that they have been denied for a Standard Modification even though we haven't actually evaluated them for it?
    Yes. We have language in our HAMP Trial Period Plan Notice model clause to address this situation: "Based on our review of your financial circumstances, you are approved for a Freddie Mac HAMP Trial Period Plan. As a result, you are ineligible for the Freddie Mac Standard Modification Trial Period Plan because borrowers who are eligible for HAMP are not eligible for the Standard Modification."
  7. What are the circumstances in which a borrower does not have a right to appeal?
    A borrower may not appeal an evaluation decision if the Servicer offers one of the following alternatives to foreclosure based on a review of an incomplete BRP or no BRP:
    • Short-term forbearance that does not exceed 6 months
    • Repayment Plan
    • Streamlined Modification
    • Short Sale or Deed in Lieu
    • Disaster Relief Modification
    • Disaster-related forbearance that does not exceed 6 months (including successive disaster-related forbearance up to 6 months in length)

    A borrower does not have a right to appeal a decision on a complete BRP for a mortgage that is not secured by the borrower's Primary Residence, such as an abandoned property, second home, or investment property.

    Finally, a borrower does not have a right to appeal a decision on any complete BRP submitted after the First Complete BRP, where both BRPs were submitted on or after January 10, 2014 on a mortgage secured by a Primary Residence. For example, if a borrower submitted the First Complete BRP on February 1, 2014, received a HAMP Trial Period Plan, and obtained a HAMP modification and then lost good standing, the Servicer would not provide that borrower with a right to appeal on a complete BRP submitted in August of 2014.

Borrower Information Requests

  1. What should a Servicer do if a borrower requests information on the owner/assignee of their loan under RESPA?
    Servicers should review Guide Section 51.5. Freddie Mac does not provide legal advice to our Servicers. Servicers should seek advice from their legal counsel to determine how to comply with laws and regulations, including RESPA and Regulation X under that Act.

    The official CFPB interpretation to Regulation X includes instructions on how to respond to requests for information under Section 1024.36. Specifically, that commentary states that "a servicer complies with Section 1024.36(d) by responding to an information request for the owner or assignee of a mortgage loan by identifying the person on whose behalf the servicer receives payments from the borrower."

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