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Servicing Alignment Initiative FAQs

The following are answers to frequently asked questions about Freddie Mac's requirements for the Servicing Alignment Initiative. They provide additional guidance on our revised default management requirements under this initiative, but are not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide (Guide) or the terms of your Master Agreement and/or Master Commitment.

For FAQs on the new modification solution, refer to the Standard Modification FAQs web page.

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

Servicing Alignment Initiative

  1. What is the Servicing Alignment Initiative and why is FHFA directing it?
  2. What are the aligned service areas?
  3. What are the anticipated effects of the Servicing Alignment on homeowners and Servicers?
  4. How does the Servicing Alignment Initiative affect Servicers responsibilities for foreclosures?
  5. Can "dual-tracking" occur under the Servicing Alignment Initiative (in which foreclosure proceedings and loan modification activities are pursued concurrently)?
  6. How does the alignment affect third-party counselors involved in loss mitigation?
  7. Are your requirements exactly the same as Fannie Mae's?

Borrower Contact

  1. How have the requirements for contacting delinquent borrowers changed? 
  2. Do I need to satisfy each one of the defined quality right party contact (QRPC) attributes to fulfill the QRPC requirements?
  3. Are the QRPC requirements satisfied if I meet all of the QRPC attributes, but the borrower declines all offers for a foreclosure prevention alternative?
  4. Do payment receipts constitute a QRPC?
  5. Does it constitute as QRPC if a borrower accepts a phone call, but refuses to discuss their intent, reason for delinquency, or listen to the foreclosure avoidance options?
  6. Is the three-day calling rule for delinquent loans required for all loans?
  7. Do the "days" in the requirements to conduct calls every third day until QRPC is achieved include weekends and holidays?
  8. Am I required to call a borrower who historically pays on or around the 15th day of delinquency every third day? 
  9. If the 17th day of delinquency falls on a non-business day, may I send the late notice on the next business day? 
  10. Does Freddie Mac require Servicers to implement single point-of-contact models?
  11. Can the solicitation letter and uniform borrower assistance form be sent separately to a delinquent borrower? 
  12. What are Freddie Mac's requirements for contacting and working with a borrower who has filed for bankruptcy? 
  13. May I send borrower communications through regular mail, or does it have to be certified mail? What about electronically? 
  14. Am I required to establish a toll-free telephone number? 
  15. For the purpose of applying call center performance standards, how do you define a call center?
  16. I cannot segregate Freddie Mac mortgage-related calls from Fannie Mae mortgage-related calls; therefore, I am not able to accurately report call blockage and abandonment rates. How do I ensure that I’m in compliance with this requirement? 
  17. The revised solicitation requirements require Servicers to solicit any borrower who is 31 days or more delinquent for an alternative to foreclosure between the 31st and 35th day of delinquency, and again between the 61st and 65th day of delinquency if right party contact has not been achieved. Does this mean that the Servicer has to call every three days, but only solicit for a workout between the 31st and 35th day of delinquency and again between the 61st and 65th day of delinquency?
  18. If applicable law has different or more liberal requirements, should a Servicer follow applicable law?
  19. I have a borrower who stated they do not wish to be contacted. May I still contact them to see if they changed their mind and would like to discuss foreclosure avoidance options? 
  20. Do I need to document my efforts to review borrowers for alternatives to foreclosure based on the evaluation hierarchy defined in the Guide?
  21. When do error resolution procedures apply? 
  22. What do I do if I receive a repeat complaint from a borrower and the initial complaint was already evaluated and responded to through our error resolution processes?
  23. Are "door-knocking" campaigns required?
  24. I service mortgages in areas that have state statutes that require a breach letter to be sent earlier in order to refer mortgages to foreclosure by the 120th day of delinquency. How should I handle this?
  25. Can I use an auto dialer for my collection call campaigns?

Home Affordable Modification Program (HAMP)

  1. If I am evaluating a borrower for imminent default for a HAMP modification, is there any additional documentation required?
  2. How do the solicitation requirements affect HAMP solicitation, documentation, evaluation time line and notice, and referral to foreclosure?
  3. With the solicitation document requirements, can I still use Treasury’s non-GSE HAMP solicitation documents for borrowers whom I believe are eligible for HAMP?
  4. May a borrower pay more than their contractual HAMP trial period payment without restarting the trial period? 

Borrower Solicitation and Response Packages

  1. May I use our proprietary solicitation package in lieu of the Borrower Solicitation Package?
  2. Do I have to conduct follow-up calls to the borrower the day after I send the Borrower Solicitation Package?
  3. Does a borrower need to respond to a solicitation within 30 calendar days or 30 business days?
  4. If a borrower calls but does not have all the information they are required to provide, how does it affect the process and our progress?
  5. If I am working with a borrower on an incomplete Borrower Response Package based on the first solicitation required between days 31 and 35 of delinquency, am I required to send the second Borrower Solicitation Package required between days 61 and 65 of delinquency?
  6. Is a complete Borrower Response Package required for short-term home retention options?
  7. Am I still required to evaluate a borrower if the borrower returns a complete Borrower Response Package after the 30-day response deadline?
  8. Do I have to send the Borrower Solicitation package required between day 61 and 65 of delinquency if I have already evaluated the borrower's complete Borrower Response Package from the first solicitation, and the borrower did not qualify for an alternative to foreclosure?
  9. Is there a limit to the number of times that a borrower can be re-evaluated for an alternative to foreclosure if the borrower continues to provide new or updated information?
  10. What happens if I do not receive timely approval for non-delegated alternatives to foreclosure? 
  11. If I must complete a borrower evaluation before I order a BPO, what happens if day 30 approaches and I did not receive the BPO?
  12. How old can a borrower’s income documentation be?
  13. Am I required to obtain a borrower’s bank statements? 
  14. Do I report default action codes H4 and H5 for borrowers in imminent default?

Post-Referral to Foreclosure Solicitation Letter

  1. Is the attorney/trustee still required to send the post-referral to foreclosure letter within five days after referral to foreclosure if the borrower files bankruptcy or a contested matter arises after the foreclosure referral, but before the solicitation is sent?
  2. Is the post-referral to foreclosure solicitation letter required to be sent again if a foreclosure is suspended or postponed?
  3. As the Servicer, am I responsible for making sure that the attorney sends the post-referral to foreclosure solicitation letter?
  4. If I need to conduct a review before foreclosure initiation or, for a Primary Residence, before the first legal action is taken, and another review prior to foreclosure sale, and then also direct the attorney to send a foreclosure prevention solicitation letter after referral, isn't it too late in the foreclosure process for the attorney to send the foreclosure prevention solicitation letter?

Foreclosure Time Lines

  1. Will Freddie Mac set foreclosure time lines by county or MSA to account for areas within a state that take longer to process a foreclosure?
  2. Will foreclosure time lines for borrowers in Chapter 7 or Chapter 13 bankruptcy change as a result of the foreclosure time lines announced?
  3. Will I get a credit if I exceed Freddie Mac's foreclosure time line requirements for a delay caused by obtaining a bankruptcy lift of stay or resolving other contested matters?
  4. Will I get a credit if I exceed Freddie Mac's foreclosure time line requirements for a delay caused by a mandatory borrower mediation hearing? 
  5. Do Freddie Mac's requirements supersede any state requirements for foreclosure prevention actions? 
  6. How are deeds-in-lieu accounted for in the foreclosure time line requirements?  
  7. If I'm unable to refer a loan to foreclosure by the timeframe required in Guide Chapter 66.9.1 because the borrower has submitted a Borrower Response Package that I'm considering for a workout, or because the response time for a foreclosure prevention offer has not expired, will the state foreclosure time lines be extended by a corresponding amount of time so I have longer to evaluate the borrower for a workout and/or so I can extend the offer period for a foreclosure alternative? 
  8. Should I proceed with a foreclosure sale if I receive a completed Borrower Response Package less than 15 days from the foreclosure sale date?
  9. Is there a required format for providing certification to foreclosure to the attorney/trustee?
  10. Is it my responsibility as a Servicer to confirm that the attorney/trustee has received our foreclosure certification?
  11. Are Freddie Mac's foreclosure certification requirements in addition to or a replacement for the HAMP foreclosure certification requirement?

Servicer Performance Management

  1. How do the requirements affect the Servicer Performance Profile and Servicer Success Scorecard?
  2. If our call center does not meet the benchmarks, will it reflect on our Servicer Performance Profile/Servicer Success Scorecard?

Incentives and Compensatory Fees

  1. How have incentives and compensatory fees changed?
  2. When did the incentives and compensatory fees become effective?
  3. "Intra-state netting" is now used when calculating foreclosure time line compensatory fees. What does this mean?
  4. Is there an appeals process for foreclosure time line or other compensatory fees?
  5. Can I dispute the compensatory fees citing the state or court-related delays as part of the monthly compensatory fees appeal process? 
  6. Can I still make data corrections under the requirements?
  7. How are foreclosure time line delays required by state legislation addressed in performance measurements and compensatory fees?
  8. Are the limits on the incentives and compensatory fees in a consecutive 12-month period? 

Systems

  1. Does Electronic Default Reporting (EDR) capture all acceptable delays for servicing delinquent loans?

Other

  1. What loan types or products require Early Delinquency Counseling?

Servicing Alignment Initiative

  1. What is the Servicing Alignment Initiative and why is FHFA directing it?

    The Servicing Alignment Initiative is an FHFA-led effort to establish consistent policies and processes for servicing delinquent loans owned or guaranteed by Freddie Mac or Fannie Mae. The alignment will help Servicers resolve delinquencies more consistently and efficiently, keep more borrowers in their homes whenever possible, and minimize losses to the GSEs and taxpayers.
  2. What are the aligned service areas?

    The aligned servicing standards originally focused on four key areas: (1) borrower contact, (2) delinquency management practices, (3) loan modifications and alternatives to foreclosure, and (4) foreclosure time lines. Additional areas of alignment included short sales, deed-in-lieus of foreclosure, revisions to foreclosure counsel requirements, and addressing borrowers affected by disasters.  In addition, monetary incentives and compensatory fees were introduced and updated from time-to-time to promote effective Servicer execution in key defined areas.
  3. What are the anticipated effects of the Servicing Alignment on homeowners and Servicers?

    The Servicing Alignment Initiative has streamlined and simplified Servicer processes by:
    • Improving service to borrowers through greater consistency and clarity in borrower communications
    • Achieving more efficient processing of loan modifications
    • Imposing consistency, fairness, and efficiency in the foreclosure process
    • Increasing Servicer accountability, reinforced by incentives and compensatory fees
    • Requiring the use of one set of documents from borrowers to determine modification eligibility more quickly and offer alternatives to foreclosure to homeowners who are not eligible for a modification and removing documentary obstacles to appropriate alternatives to foreclosure
  4. How does the Servicing Alignment Initiative affect Servicers' responsibilities for foreclosures?

    We have adopted uniform, state-specific foreclosure time lines that reflect applicable foreclosure law requirements and current conditions in each state. Servicers remain responsible for improper actions, delays, and violations of applicable law. The state foreclosure time lines are reviewed periodically and updated as necessary.
  5. Can "dual-tracking" occur under the Servicing Alignment Initiative (in which foreclosure proceedings and loan modification activities are pursued concurrently)?

    Under the requirements, Servicers must engage in a single track for considering alternatives to foreclosure up to the date of foreclosure referral or the 120th day of delinquency, whichever is earlier except as required by applicable law (i.e. mortgages secured by Primary Residences). Also, prior to issuing a referral for foreclosure, the Servicer must perform a formal review of the case to confirm that the borrower has been considered for a foreclosure alternative consistent with the defined guidelines. Even after the foreclosure process has begun, Servicers must continue to work with homeowners on alternatives to foreclosure to ensure borrowers have additional opportunity to avoid foreclosure after the mortgage has been referred to foreclosure.
  6. How does the alignment affect third-party counselors involved in loss mitigation?

    Counselors should see greater transparency in the process for their clients seeking an alternative to foreclosure, as well as a standardized application process for borrowers. Freddie Mac continues to support and promote the use of housing counseling services.
  7. Are your requirements exactly the same as Fannie Mae's?
    The GSEs have defined a common approach to loss-mitigation activities, and we are largely aligned in the defined default management areas. There are some differences between each GSE's operational implementation based on GSE-specific business needs.

Borrower Contact

  1. How have the requirements for contacting delinquent borrowers changed?

    We have published requirements on standards and time lines for the following activities for contacting delinquent borrowers:
    • Collection calls and call center standards
    • Establishing quality right party contact
    • Borrower Solicitation Packages
    • Written communication notices (i.e., late notices, acknowledgment of receipt of Borrower Response Packages, incomplete information notices, evaluation notices, and breach [notice of acceleration] letters)
    • Borrower Response Packages

    The emphasis is on early intervention, and we require earlier and more frequent borrower contact. For example, collection calls should begin between the third and 36th day of delinquency. Detailed requirements are in Guide Section 63.2, 64.4 and 64.6.
  2. Do I need to satisfy each one of the defined quality right party contact (QRPC) attributes to fulfill the QRPC requirements?

    A Servicer's objective in contacting a delinquent borrower is to establish quality right party contact. QRPC occurs when a Servicer establishes a rapport with the borrower, expressing empathy and a desire to help identify and discuss with the borrower, co-borrower or trusted advisor, such as a housing counselor, the most appropriate options for delinquency resolution. To meet the requirements you must make every attempt to achieve QRPC by:
    • Determining the reason for delinquency and whether such reason is temporary or permanent in nature.
    • Determining whether the borrower has vacated or plans to vacate the property.
    • Determining the borrower's current perception of their financial circumstances and ability to repay the mortgage debt.
    • Setting payment expectations and educating the borrower on the availability of foreclosure prevention alternatives as appropriate.
    • Obtaining a commitment from the borrower to either resolve the delinquency through traditional methods (paying the total delinquency amount) or engaging in a foreclosure prevention alternative.
  3. Are the QRPC requirements satisfied if I meet all of the QRPC attributes, but the borrower declines all offers for a foreclosure prevention alternative?

    If you have made every attempt to achieve QRPC as defined in the Guide and the borrower declines all offers for a foreclosure prevention alternative, you have met the QRPC requirements. As always, it is important that you document your actions.
  4. Do payment receipts constitute a QRPC?

    No. Payment receipts do not constitute a QRPC.
  5. Does it constitute as QRPC if a borrower accepts a phone call, but refuses to discuss their intent, reason for delinquency, or listen to the foreclosure avoidance options?

    If you established contact with the borrower, expressed empathy and a desire to help, and made an attempt to discuss and collect the information necessary to determine the most appropriate options for delinquency resolution, then the Servicer has achieved QRPC.
  6. Is the three-day calling rule for delinquent loans required for all loans?

    Servicers should use their discretion and initiate telephone contact with each delinquent borrower between days 3-36 of delinquency. Servicers may start at day three, but must start no later than day 36. Servicers should continue to focus on high-risk borrowers earlier in the collection process and must tailor calling campaigns appropriately based on the risk characteristics of the mortgage, each borrower's level of delinquency, previous payment habits, and the minimum contact requirements defined in Guide Section 64.5. Servicers may use the results of a collection and loss mitigation tool to assist in tailoring their collection efforts. Servicers must comply with the minimum collection time frames even if a collection and loss mitigation tool is used. Elimination of the use of a loss mitigation tool for the purpose of delaying the initial Borrower Solicitation Package required to be sent by the 35th day of Delinquency.

    The Servicer must continue to call at least every third day until the:

    • Servicer achieves quality right party contact and determines that the borrower is not interested in an alternative to foreclosure,
    • Delinquency is cured,
    • Servicer achieves quality right party contact and has obtained from the borrower a promise to pay the delinquent amount by a specified date (not to exceed 30 days)
    • Complete Borrower Response Package is received in accordance with Guide Section 64.6 to evaluate the borrower for an alternative to foreclosure, OR
    • Borrower enters into a repayment plan or forbearance agreement with the Servicer
  7. Do the "days" in the requirements to conduct calls every third day until QRPC is achieved include weekends and holidays?

    Yes, weekends and holidays are included in the three-day contact requirements for establishing QRPC. However, you are able to call delinquent borrowers on the next business day if the day you are required to call falls on a non-business day and you are not open to conduct loss mitigation and collection activities.

    In the Guide, the word "day" without the modifier "business" refers to a calendar day. A "business day" is defined as a day other than (1) a Saturday or Sunday, (2) a day on which the Federal Reserve Bank of New York is authorized or obligated by law or executive order to remain closed, or (3) a day on which the offices of Freddie Mac are closed.
  8. Am I required to call a borrower who historically pays on or around the 15th day of delinquency every third day?

    You must treat each delinquency individually by customizing the collection techniques to fit the borrower’s circumstances. You should address higher-risk borrowers earlier in the collection cycle. In addition, all collection efforts must be based on the extent of the delinquency and your knowledge of certain factors, including the borrower’s prior payment history and habits. You are not required to call all borrowers on the third day of delinquency. However, once you start calling a borrower, you should call every third day. If the third day falls on a non-business day, you must resume the next business day.

    You may use a loss mitigation tool to assist in managing your collection efforts; however, on or after January 10, 2014, you may no longer use a loss mitigation tool to elect to not send a Borrower Solicitation Package between days 31-35 of delinquency.
  9. If the 17th day of delinquency falls on a non-business day, may I send the late notice on the next business day?

    Yes.
  10. Does Freddie Mac require Servicers to implement single point-of-contact models?

    If the Servicer elects to have a process supporting a single point of contact model and is using a team approach, the Servicer should provide the Borrower the ability to request and speak to a specific person from the assigned personnel team and may leave a message. However, the Servicer may not use any additional processes that are not compliant with applicable law or otherwise adverse to Freddie Mac.
  11. Can the solicitation letter and uniform borrower assistance form be sent separately to a delinquent borrower?

    No. The Borrower Solicitation Package, which includes the solicitation letter, required uniform assistance forms, and other required documentation, must be sent during the time periods stipulated in our Guide requirements: 31-35 days delinquent and again at 61-65 days delinquent if quality right party contact has not been achieved or the borrower did not respond to the initial solicitation.
  12. What are Freddie Mac's requirements for contacting and working with a borrower who has filed for bankruptcy?

    A Servicer is not required to solicit a borrower in an active Chapter 7 or Chapter 13 bankruptcy. However, a borrower in active Chapter 7 or Chapter 13 bankruptcy, or whose mortgage has been discharged under Chapter 7 bankruptcy, must be considered for an alternative to foreclosure if the borrower, the borrower's counsel or bankruptcy trustee (with the borrower's written consent) submits a request to the Servicer. Additionally, you must comply with applicable law when contacting borrowers in bankruptcy.
  13. May I send borrower communications through regular mail, or does it have to be certified mail? What about electronically?

    You may send and receive your Borrower Response Packages through regular mail or electronically. For complete requirements, refer to Guide Sections 50.3.1 and 64.6(e).
  14. Am I required to establish a toll-free telephone number?

    Yes, you must provide a toll-free telephone number for borrowers to call when they have questions or concerns so they do not incur a cost to make the phone call. For detailed requirements, refer to Guide Section 64.6(d). In addition, the borrower must be able to reach a representative from your servicing shop when they call the telephone number in accordance with the call center performance standards outlined in Guide Section 65.8.
  15. For the purpose of applying call center performance standards, how do you define a call center?

    We do not have a prescriptive definition of what constitutes a call center. We expect any facility responsible for a measurable volume of inbound/outbound calls to meet the minimum call center and other contact performance standards.
  16. I cannot segregate Freddie Mac mortgage-related calls from Fannie Mae mortgage-related calls; therefore, I am not able to accurately report call blockage and abandonment rates. How do I ensure that I’m in compliance with this requirement? 

    The call center performance requirements are the same for Freddie Mac and Fannie Mae-owned mortgages. For complete call center performance requirements, refer to Guide Section 65.8.
  17. The revised solicitation requirements require Servicers to solicit any borrower who is 31 days or more delinquent for an alternative to foreclosure between the 31st and 35th day of delinquency, and again between the 61st and 65th day of delinquency if right party contact has not been achieved. Does this mean that the Servicer has to call every three days, but only solicit for a workout between the 31st and 35th day of delinquency and again between the 61st and 65th day of delinquency?

    Yes. The Servicer must also instruct the foreclosure attorney/trustee to send a post-referral to foreclosure solicitation letter within five business days of the foreclosure referral.
  18. If applicable law has different or more liberal requirements, should a Servicer follow applicable law?

    As always, Servicers must comply with all requirements under applicable law with respect to all of its Servicing activities.
  19. I have a borrower who stated they do not wish to be contacted. May I still contact them to see if they changed their mind and would like to discuss foreclosure avoidance options? 

    You must comply with the collection and solicitation requirements in accordance with the Guide, subject to applicable law. However, if the applicable telemarketing, servicing, collection, or other laws prohibit calling a borrower who states they do not wish to be contacted, only then must you comply with the applicable laws.
  20. Do I need to document my efforts to review borrowers for alternatives to foreclosure based on the evaluation hierarchy defined in the Guide?

    You should keep appropriate documentation in the mortgage file that demonstrates your efforts to assess a borrower's alternatives to foreclosure. The hierarchy is designed to ensure that the least costly home retention options are offered prior to a HAMP modification, which must be offered prior to the Freddie Mac Standard Modification, as applicable. Servicers must send eligible Borrowers a solicitation letter (e.g., Form 1191) and Streamlined Modification Trial Period Plan no later than the 105th day of delinquency. Servicers may also include the appropriate system notes to document their efforts.
  21. When do error resolution procedures apply?

    If a customer complaint or borrower communication reaches you and that complaint or communication asserts an error relating to the Servicing of a mortgage, then the error resolution procedures apply, no matter how or where that borrower complaint or communication arrived at your shop.  
  22. What do I do if I receive a repeat complaint from a borrower and the initial complaint was already evaluated and responded to through our error resolution processes?

    If you have evaluated and responded to a borrower's complaint through your error resolution process that meets the requirements in the Guide and in accordance with applicable law, you do not need to take additional action on the repeat complaint other than to document it.
  23. Are "door-knocking" campaigns required?

    No. Door-knocking campaigns are not required. However, Servicers are free to engage in them to increase alternative to foreclosure completion rates.
  24. I service mortgages in areas that have state statutes that require a breach letter to be sent earlier in order to refer mortgages to foreclosure by the 120th day of delinquency. How should I handle this?

    If state law requires a breach letter to be sent prior to the 60th day of delinquency in order to be able to refer the mortgage to foreclosure by the 120th day of delinquency, you must send the breach letter on the earlier date. Servicers are reminded that they must comply with the new requirements governing Primary Residences to refer no earlier than day 121 and no later than 5 Business Day thereafter unless certain exceptions apply. See Guide Sections 63.2(b) and 66.9.1.
  25. Can I use an auto dialer for my collection call campaigns?

    Yes, provided that a live agent will pick up the call if a connection is made.

Home Affordable Modification Program (HAMP)

  1. If I am evaluating a borrower for imminent default for a HAMP modification, is there any additional documentation required?

    A Borrower must, at a minimum, provide a complete Borrower Response Package, as defined in Section 64.6(d), in order to be evaluated for imminent default. In addition, the Servicer must obtain:
    • Either a tax transcript by processing the Borrower's signed Form 4506T-EZ or Form 4506-T, or a copy of the Borrower's most recent signed federal income tax return. (See Section 65.18 for situations where IRS Form 4506-T is required to be obtained.)
    • A credit report to verify debt expenses pursuant to Sections C65.5.1 and C65.6(c)
  2. How do the solicitation requirements affect HAMP solicitation, documentation, evaluation time line and notice, and referral to foreclosure?

    With the Servicing Alignment Initiative, requirements related to the solicitation process and related documentation (e.g., Borrower Solicitation Package), evaluation time line and notices, referral to foreclosure and foreclosure processing apply to all alternatives to foreclosure, including HAMP. As a result, the existing requirements related to these topics that we have in place for HAMP have changed.
  3. With the solicitation document requirements, can I still use Treasury’s non-GSE HAMP solicitation documents for borrowers whom I believe are eligible for HAMP?

    No. You must use the appropriate SAI solicitation documentation:
    • Form 710, Uniform Borrower Assistance Form
    • Form 710A, Government Monitoring Data Form, which must be provided only to all HAMP eligible borrowers
    • Guide Exhibit 1131,Solicitation Letter – 31 Days Delinquent, and Guide Exhibit 1161, Solicitation Letter – 61 Days Delinquent
    • In addition, Servicers must use the appropriate model evaluation clause for the "HAMP Trial Period Plan Notice". (See Exhibit 93, Evaluation Model Clauses, for this model letter.)
  4. May a borrower pay more than their contractual HAMP trial period payment without restarting the trial period?

    Yes, a borrower can pay more than the required trial period amount without restarting their trial period.

Borrower Solicitation and Response Packages

  1. May I use our proprietary solicitation package in lieu of the Borrower Solicitation Package?

    You may use the solicitation templates that Freddie Mac provides or customized equivalents that provide a comparable level of detail. In all instances, the Borrower Solicitation Package sent to the borrower must include the complete set of documents and content specified in the Guide and otherwise comply with applicable law.
  2. Do I have to conduct follow-up calls to the borrower the day after I send the Borrower Solicitation Package?

    Yes. You are required to begin calls the next day, and follow-up calls must continue at least every third day until quality right party contact is achieved. We suggest that you coordinate your mass mailing campaigns with your call center operations to initiate the calls on time.
  3. Does a borrower need to respond to a solicitation within 30 calendar days or 30 business days?

    The borrower must respond to the Borrower Solicitation Package within 30 calendar days, unless the 30th calendar day falls on a non-business day, in which case the response date is moved to the first business day after the 30th calendar day. However, if a borrower fails to respond, they are not precluded from submitting a complete Borrower Response Package to the Servicer at a later date, in which case a Servicer must consider that borrower for an alternative to foreclosure, except in certain limited instances (e.g., a foreclosure sale is imminent and there is insufficient time to review the borrower's later submission).
  4. If a borrower calls but does not have all the information they are required to provide, how does it affect the process and our progress?

    If the borrower does not have the required information, the Servicer must continue to follow up with the borrower until a complete Borrower Response Package is received in order for the Servicer to evaluate the borrower for an alternative to foreclosure.
  5. If I am working with a borrower on an incomplete Borrower Response Package based on the first solicitation required between days 31 and 35 of delinquency, am I required to send the second Borrower Solicitation Package required between days 61 and 65 of delinquency?

    If QRPC contact has been established, but you have not received information promised by the borrower or have received incomplete information, then you must call the borrower at least every third day to follow up on missing or incomplete information. In this instance, while working with a borrower on an incomplete Borrower Response Package, you are not required to send the second Borrower Solicitation Package required between days 61 and 65 of delinquency. However, you must send the borrower a notice of incompleteness detailing the missing documentation and information that the borrower must submit to complete the Borrower Response Package.
  6. Is a complete Borrower Response Package required for short-term home retention options?

    If you receive sufficient information to evaluate the borrower for a reinstatement or relief option in accordance with Chapter A65, or a workout option in accordance with Chapter D65 without the complete Borrower Response Package, you may do so. However, you must comply with applicable law, including, but not limited to any requirements to perform due diligence to obtain a complete Borrower Response Package (e.g. towards the end of a forbearance period).
  7. Am I still required to evaluate a borrower if the borrower returns a complete Borrower Response Package after the 30-day response deadline?

    If a borrower fails to respond by the 30-day response deadline, the borrower may still submit a complete Borrower Response Package at a later date. You must consider that borrower for an alternative to foreclosure, except in certain limited instances (e.g., a foreclosure sale is imminent, and there is insufficient time to review the borrower's later submission – See Guide Section 64.6(d) (5) and Guide Section 66.41). In addition, you must still meet the required time frames for sending an acknowledgement of the Borrower Solicitation Package (five business days), an incomplete notice (five business days), and/or the evaluation decision (30 days) after receiving the Borrower Response Package. Servicers may, but are not required, unless required by applicable law, to send a notice of incompleteness when an incomplete Borrower Response Package arrives within 37 days prior to a scheduled foreclosure sale. However, you are strongly encouraged to work with such borrowers to complete the package.
  8. Do I have to send the Borrower Solicitation Package required between day 61 and 65 of delinquency if I have already evaluated the borrower's complete Borrower Response Package from the first solicitation, and the borrower did not qualify for an alternative to foreclosure?

    No, you are not required to send the Borrower Solicitation Package otherwise required between day 61 and 65 of delinquency if the borrower did not qualify for an alternative to foreclosure based on your first evaluation of a complete Borrower Response Package, and you have met all of our Guide requirements. Please note that if the borrower's circumstances have changed, you should evaluate them again for an alternative to foreclosure based on their changed circumstances and submission of a new complete Borrower Response Package.

  9. Is there a limit to the number of times that a borrower can be re-evaluated for an alternative to foreclosure if the borrower continues to provide new or updated information?

    No. There is no limit provided that the borrower submits a complete Borrower Response Package for each evaluation.

  10. What happens if I do not receive timely approval for non-delegated alternatives to foreclosure?

    You must manage your file to ensure that there is sufficient time to request any necessary approvals from Freddie Mac or third parties, such as the mortgage insurer, so you can provide a response to the borrower no later than 30 days from receiving the complete Borrower Response Package.

    Freddie Mac will take into consideration, on a case-by-case basis, documented circumstances where a review conducted by a third party or Freddie Mac caused you to exceed the 30-day time frame.
  11. If I must complete a borrower evaluation before I order a BPO, what happens if day 30 approaches and I did not receive the BPO?

    If an AVM value is not available, you should immediately order the BPO as soon as you receive a complete Borrower Response Package. If the BPO value does not arrive within 30 days of receiving the complete Borrower Response Package, you may refrain from making a final decision, except as necessary to comply with applicable law.
  12. How old can a borrower’s income documentation be?

    A borrower’s income documentation cannot be more than 90 days old as of the date you first determine that the borrower submitted a complete Borrower Response Package.
  13. Am I required to obtain a borrower’s bank statements?

    You are only required to obtain a borrower’s bank statement if the borrower has income that is required to be supported with bank statements.

    For example, if a borrower provides you with a recent pay stub that reflects at least 30 days of year-to-date income, you do not need to obtain a bank statement. However, if you have received a borrower’s bank statement or have access to the borrower’s bank records, you should take that information into consideration in determining the extent of the borrower’s financial hardship.
  14. Do I report default action codes H4 and H5 for borrowers in imminent default? 

    If a borrower is facing imminent default and you receive a complete Borrower Response Package, only report default action code H4. If the borrower becomes delinquent, you must report default action code H5.

Post-Referral to Foreclosure Solicitation Letter

  1. Is the attorney/trustee still required to send the post-referral to foreclosure letter within five days after referral to foreclosure if the borrower files bankruptcy or a contested matter arises after the foreclosure referral, but before the solicitation is sent?

    Yes. The attorney/trustee should still send the post-referral foreclosure solicitation letter within five days of the referral provided doing so is not in violation of applicable law. As stated in Guide Chapter 66.9.2, the post-referral to foreclosure solicitation letter may be sent at a later date, but no later than necessary to comply with applicable law.
  2. Is the post-referral to foreclosure solicitation letter required to be sent again if a foreclosure is suspended or postponed?

    No, if the initial requirement to send the post-referral to foreclosure solicitation letter within five days after referral to foreclosure has been met, you do not need to send it again.
  3. As the Servicer, am I responsible for making sure that the attorney sends the post-referral to foreclosure solicitation letter?

    Yes. The Servicer is accountable for the actions of the attorney, including sending the post-referral to foreclosure solicitation letter. We recommend that you build controls into your processes to ensure that the letter is sent.
  4. If I need to conduct a review before foreclosure initiation or, for a Primary Residence, before the first legal action is taken, and another review prior to foreclosure sale, and then also direct the attorney to send a foreclosure prevention solicitation letter after referral, isn't it too late in the foreclosure process for the attorney to send the foreclosure prevention solicitation letter?

    No. The solicitation letter is intended to secure a complete Borrower Response Package in an effort to provide an alternative to foreclosure and prevent the foreclosure sale, not necessarily to prevent the foreclosure process.

Foreclosure Time Lines

  1. Will Freddie Mac set foreclosure time lines by county or MSA to account for areas within a state that take longer to process a foreclosure?

    No. We are issuing state standards for meeting foreclosure time lines. Specifically, our foreclosure time lines are based on the number of days from the due date of the last paid installment on the mortgage until the foreclosure sale occurs. The time lines are state-specific and are aimed to align more closely with actual foreclosure processing time lines in each state.
  2. Will foreclosure time lines for borrowers in Chapter 7 or Chapter 13 bankruptcy change as a result of the foreclosure time lines announced?

    No. The foreclosure time lines for borrowers in Chapter 7 or Chapter 13 bankruptcy have not changed. The state foreclosure time lines will be extended if the delay is due to bankruptcy. However, Servicers are reminded that if they encounter a delay beyond their control, they may document the delay and submit it to Freddie Mac for consideration of a time line extension.
  3. Will I get a credit if I exceed Freddie Mac's foreclosure time line requirements for a delay caused by obtaining a bankruptcy lift of stay or resolving other contested matters?

    You have up to 80 days for each Chapter 7 bankruptcy filing and up to 125 days for each Chapter 13 bankruptcy filing to obtain relief from the stay. If you believe that a delay in these instances was beyond your control, you may submit an appeal to Freddie Mac with appropriate supporting documentation within 30 days of the publication of the compensatory fee being assessed.

    As a reminder, the Monthly Compensatory Fee Analysis Report of the prior month's estimated state foreclosure time line compensatory fees will be available in the Servicer's Servicer Performance Profile (SPP) on the fifth business day of the following month. You must review the report each month and have 30 days from the date of the report's publication to submit an appeal for the prior month's estimated compensatory fees.
  4. Will I get a credit if I exceed Freddie Mac's foreclosure time line requirements for a delay caused by a mandatory borrower mediation hearing?

    If you believe that the delay has been beyond your control, you can submit an appeal to Freddie Mac with appropriate supporting documentation.
  5. Do Freddie Mac's requirements supersede any state requirements for foreclosure prevention actions?

    Servicers must always comply with applicable law when engaged in any servicing activities for Freddie Mac mortgages. Where requirements overlap, Servicers must comply with the shorter time frame. Servicers should make every effort to meet Freddie Mac's time line requirements regardless of state requirements. Efforts may include sending state-required documentation, such as a breach or notice of acceleration letter, earlier in the delinquency in order to meet Freddie Mac's time lines. If a state is reviewing a borrower's situation, the Servicer should ensure they document the review and submit it to Freddie Mac for approval to postpone foreclosure proceedings.
  6. How are deeds-in-lieu accounted for in the foreclosure time line requirements?

    Deeds-in-lieu are not included in the foreclosure time line requirements. Foreclosure time lines only include loans that went into foreclosure sale. Please see Guide Chapter 66.33 (a) and Guide Exhibit 83A for more information.
  7. If I'm unable to refer a loan to foreclosure by the timeframe required in Guide Chapter 66.9.1 because the borrower has submitted a Borrower Response Package that I'm considering for a workout, or because the response time for a foreclosure prevention offer has not expired, will the state foreclosure time lines be extended by a corresponding amount of time so I have longer to evaluate the borrower for a workout and/or so I can extend the offer period for a foreclosure alternative?

    While a mortgage cannot be referred to foreclosure in either of the instances mentioned above, the foreclosure time lines will not be extended in either case. It is a Servicer's responsibility to secure a complete Borrower Response Package in a timely manner so that evaluations and foreclosure alternative offers can be processed within the designated time lines.
  8. Should I proceed with a foreclosure sale if I receive a completed Borrower Response Package less than 15 days from the foreclosure sale date?

    You should make the determination whether it is possible to review the Borrower Response Package in time to provide the foreclosure certificate as referenced in question #67. If you review the Borrower Response Package and you offer a foreclosure alternative to the borrower, the borrower has 14 days to respond. As such, if a foreclosure sale is scheduled within that 14-day time period, you must postpone the foreclosure sale to allow the borrower the time to respond.
  9. Is there a required format for providing certification to foreclosure to the attorney/trustee?

    At least seven, but no more than 15 days prior to the foreclosure sale, you must review the account and send written certification to the attorney/trustee indicating that the foreclosure sale must continue unless certain conditions exist. Review Guide Section 66.41.1 for additional information.
  10. Is it my responsibility as a Servicer to confirm that the attorney/trustee has received our foreclosure certification?

    Yes, it is the Servicer's responsibility to confirm attorney/trustee receipt of the foreclosure certification.
  11. Are Freddie Mac's foreclosure certification requirements in addition to or a replacement for the HAMP foreclosure certification requirement?

    The foreclosure certification requirements announced in our June 30 Guide Bulletin 2011-11 apply to all of Freddie Mac mortgages and replace any specific certification required for HAMP.

Servicer Performance Management

  1. How do the requirements affect the Servicer Performance Profile and Servicer Success Scorecard?

    Servicers have access to reports in Default Reporting MangerSM that track a Servicer’s performance for two SAI’s requirements:
    • The “Quality Right Party Contact Monthly Monitoring Report” indicates how well a Servicer achieved the quality right party contact benchmark of at least 60% on its 120-day delinquent Freddie Mac portfolio.
    • The “BRP Monthly Progress Report” denotes a Servicer’s monthly performance for receipt of complete Borrower Response packages.
  2. If our call center does not meet the benchmarks, will it reflect on our Servicer Performance Profile/Servicer Success Scorecard?

    As applicable, call center benchmarks may be added to the Servicer Success Scorecard in the future.

Incentives and Compensatory Fees

  1. How have incentives and compensatory fees changed?

    Our incentives and compensatory fees focus on rewarding Servicers for meeting quality benchmarks, and assessing compensatory fees and other remedies for Servicers who fail to meet our defined loss-mitigation metrics. These include: Workout incentives, including existing incentives for a workout and incentives for the Freddie Mac Standard and Streamlined Modifications, and the Standard Short Sale and Standard Deed-in-lieu.
  1. When did the incentives and compensatory fees become effective?

    The incentives and compensatory fees became effective October 1, 2011. However, we changed the calculation for state foreclosure time line compensatory fees for mortgages referred to foreclosure on or after October 1, 2011, when the foreclosure sale occurred on or after January 1, 2012. Incentives and compensatory fees may continue to be updated, refer to Guide Exhibit 96 for current information.
  2. "Intra-state netting" is now used when calculating foreclosure time line compensatory fees. What does this mean?

    "Intra-state netting" means that foreclosure sales completed faster than the foreclosure time line offset loans exceeding the time line in the same state for the same month. This is applicable to mortgages that are referred to foreclosure on or after October 1, 2011 and had foreclosure sales completed on or after January 1, 2012. However, if the intra-state netting results in a negative calculation for the same state in the same month, we will not transfer that negative calculation or "credit" to the calculations of your performance in other states or for other months in the same state.
  3. Is there an appeals process for foreclosure time line or other compensatory fees?

    The Servicer may appeal a pending compensatory fee prior to Freddie Mac billing the fee.

    The Monthly Compensatory Fee Analysis Report of the prior month's estimated state foreclosure time line compensatory fees will be available in the Default Reporting ManagerSM on the fourth business day of the following month. The Servicer must review the report each month, and if they believe a compensatory fee listed on their report is incorrect, the Servicer has 30 days from the date of the report's publication to submit an appeal.

    For mortgages referred to foreclosure on or after October 1, 2011, the monthly bill will not include those mortgages for which the compensatory fees were waived.

    For mortgages referred to foreclosure prior to October 1, 2011, the annual bill will not include those mortgages for which the compensatory fees were waived throughout the year.

    Example: A foreclosure sale occurs in October for which the Servicer has exceeded Freddie Mac's state foreclosure time line as listed in Exhibit 83, Freddie Mac State Foreclosure Time Lines, and is subject to a compensatory fee. The Servicer must access the Monthly Compensatory Fee Analysis Report in the Servicer Performance Profile (available on the fourth business day in November). The Servicer then has 30 days from the fourth business day to submit an appeal to Freddie Mac (see Directory 5).
  4. Can I dispute the compensatory fees citing the state or court-related delays as part of the monthly compensatory fees appeal process?

    Yes. If you believe a delay was beyond your control, you must submit adequate documentation that supports your claim(s) in your appeal.
  5. Can I still make data corrections under the requirements?

    Servicers should, and will be allowed to, submit data to correct reporting discrepancies. However, adjustments will be made to foreclosure time line compensatory fees only if the corrected or missing data is reported within 30 days of the Monthly Compensatory Fee Analysis Report and is submitted as part of a Servicer's timely appeal of the compensatory fee.
  6. How are foreclosure time line delays required by state legislation addressed in performance measurements and compensatory fees?

    In a situation in which a state foreclosure time line supersedes the time line dictated by Freddie Mac and a compensatory fee has been assessed, Servicers may appeal the assessment and show that the delay was beyond their control, that they sent letters and responses in a timely fashion, and that they worked with state agencies in a prudent manner.
  7. Are the limits on the incentives and compensatory fees in a consecutive 12-month period? 

    If an incentive is received for a given loan, that loan will not be eligible for another incentive until six months after the first incentive. Additionally, only two incentive payments are allowed for the life of the loan.

Systems

  1. Does Electronic Default Reporting (EDR) capture all acceptable delays for servicing delinquent loans?

    EDR captures the most relevant delays in servicing delinquent loans. Please review Guide Section 64.10 and Exhibit 82 or the EDR Quick Reference Guide on the Learning Center for more information.

Other

  1. What loan types or products require Early Delinquency Counseling?

    Mortgage products that require Early Delinquency Counseling are listed in Guide Section 64.5C. The products include Home Possible® Mortgages and other mortgages for which Freddie Mac requires a Servicer to offer special servicing and Early Delinquency Counseling.

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