Freddie Mac Issues Guide Bulletin 2017-22: Servicing Updates

Freddie Mac issued Guide Bulletin 2017-22 (Bulletin), setting forth servicing updates to the Single-Family Seller/Servicer Guide. Per the Bulletin, Freddie Mac (jointly with Fannie Mae and at the direction of the Federal Housing Finance Agency) will eliminate the current Imminent Default Indicator test used to determine borrower eligibility for a mortgage modification and replace it with a new rules-based imminent default evaluation process. The Bulletin also announces revised requirements related to the Service Members Civil Relief Act (SCRA). The revised requirements: extend the allowable time a servicer has to provide a written response to an SCRA interest rate reduction request; requires servicers to submit a request for reimbursement of SCRA interest rate credits within 24 months of the end date of a servicemembers period of military service; and update the file format servicers must use to report loans as eligible for an SCRA interest rate subsidy. In addition, the Bulletin announces that Freddie Mac will no longer provide servicers with a paper copy of the property condition certificate when a property is acquired as REO, and sets forth updated requirements for cancellation of a property insurance policy for REO properties. The revised requirements regarding property condition certificates and property insurance policies for REO property are effective November 15, 2017. Servicers must use the updated SCRA file format no later than February 1, 2018 (however, servicers may begin using the updated format immediately). Servicers must implement the new imminent default evaluation no later than July 1, 2018 (however servicers may begin implementing the new evaluation once Workout Prospector is updated to accommodate the intake of imminent default data, but not before then). All other updates are effective immediately.

Click here to view the Freddie Mac Guide Bulletin