Freddie Mac Announces Numerous Servicing Requirements

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On June 14, Freddie Mac issued Bulletin 2013-10 to announce servicing policy changes with regard to Hurricane Sandy, foreclosure and alternatives to foreclosure, and other servicing issues. The Bulletin announces that servicers must submit any Hurricane Sandy exterior property inspection reimbursements by September 16, 2013, using a new template included in the Bulletin. Regarding foreclosures, the Bulletin, among other things, (i) sets the parameters under which servicers may utilize bulk trial foreclosures as an alternative foreclosure process in Florida, (ii) updates requirements for requests related to the preservation of deficiency rights, (iii) revises FICO score seasoning requirements for standard short sales and deeds-in-lieu of foreclosure (DILs), (iv) revises property inspection and closing requirements for DILs and adds a MLS requirement for short sales, and (v) removes, in most instances, the requirement that a servicer obtain a copy of a borrower’s tax transcript or most recent signed federal income tax return to be evaluated for HAMP. Among numerous other servicing policy updates, the Bulletin also (i) specifies that Freddie Mac does not reimburse for credit reports obtained in servicing activities, and (ii) requires servicers to notify Freddie Mac within 24 hours of blocking or rejecting a mortgage or mortgage transaction based on a valid match to the OFAC list of Specially Designated Nationals and Blocked Persons.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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