Freddie Mac Changes Low Activity Fee To No Activity Fee

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On June 25, Freddie Mac announced in Bulletin 2013-12 that, based on industry feedback, it is changing its recently-announced “low activity fee” to a “no activity fee.” In May, Freddie Mac announced that, effective January 1, 2014, a seller/servicer would be charged a $7,500 fee if the seller/servicer did not either (i) sell mortgages to Freddie Mac with an aggregate unpaid principal balance greater than $5 million during the immediately preceding calendar year, or (ii) service, or act as a servicing agent for, mortgages for Freddie Mac with an aggregate unpaid principal balance of at least $25 million as of December 31 of the immediately preceding calendar year. Under the revised policy, seller/servicers can avoid the fee if they (i) sell to Freddie Mac during the immediately preceding 36 months, or (ii) service, or act as a servicing agent for, a mortgage portfolio for Freddie Mac as of December 31 of the immediately preceding calendar year. In addition, new seller/servicers are exempt from the fee until they have been approved by Freddie Mac for three years.

Topics:  Banks, Fees, Financial Products, Freddie Mac

Published In: General Business Updates, Finance & Banking Updates, Residential Real Estate Updates

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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