Freddie Mac Issues Guide Bulletin 2018-2: Servicing Updates

Freddie Mac issued Guide Bulletin 2018-2 (Bulletin), setting forth servicing updates to the Single-Family Seller/Servicer Guide. Pursuant to the Bulletin, Freddie Mac updated requirements with respect to charge-off recommendations. The updated requirements: identify the scenarios that require a charge-off recommendation; revise lien release requirements upon charge-off approval; and add an example under the definition of “risk of property ownership”. Freddie Mac also updated requirements with respect to document custodians. The updated requirements: permit seller/servicers to enter into tri-party agreements with up to two document custodians (provided that one of them is a designated custodian); require seller/servicers to complete new Form 1035WF (Designated Custodial Agreement: Single Family Mortgages (Wells Fargo Bank, N.A.)) when establishing a designated custodian relationship with Wells Fargo Bank, N.A.; and no longer require seller/servicers that currently utilize Wells Fargo Bank as a document custodian (pursuant to an existing Form 1035, Custodial Agreement: Single Family Mortgages) to monitor the eligibility status of Wells Fargo Bank (as Freddie Mac now performs that function). In addition, Freddie Mac: updated Forms 16SF (Annual Eligibility Certification Report) and 1107SF (Seller/Servicer Change Notification); clarified requirements for determining the trial period payment and terms of a Capitalization and Extension Modification for Disaster Relief; and removed the requirement that a condominium homeowners association maintain certain additional liability insurance coverage. The updated charge-off requirements are effective August 1, 2018 (however, servicers may implement earlier if able). All other updates are effective immediately.

Click here to view the Freddie Mac Guide Bulletin 2018-2