FHLMC Bulletin 2010-1
January 27th, 2010
On January 26, 2010, Freddie Mac has issued the following Single Family Seller/Servicer Guide Update regarding Guide Bulletin 2010-1.
Today, we issued Single-Family Seller/Servicer Guide (Guide) Bulletin 2010-1, which provides Servicers with Home Affordable Modification program (HAMP) updates, including information on the following:
- Important imminent default requirements
- Freddie Mac's new Imminent Default IndicatorTM
- Recent U.S. Department of the Treasury (Treasury) announcements
In addition, today's Guide Bulletin provides a servicing announcement for all modified mortgages.
Important Imminent Default Requirements
HAMP updates in this Guide Bulletin include the following requirements that are effective for all new imminent default evaluations being conducted on or after
March 1, 2010:
- Introducing Imminent Default Indicator, our new HAMP servicing tool that must be used as part of any imminent default evaluation.
- Revising our requirements for determining imminent default to require that borrowers who are current or less than 60 days delinquent be evaluated for imminent default before being considered for a HAMP Trial Period Plan, and providing revised imminent default evaluation and process requirements. This includes eliminating the existing Debt Credit Ratio (DCR) test and revising the cash reserves requirements.
- Providing additional guidance with respect to the income documentation and verification requirements for borrowers who must be evaluated for imminent default.
Please refer to the Bulletin’s Attachment A, Determining Imminent Default Under Single-Family Seller/Servicer Guide Section C65.4, for complete imminent default requirements.
Freddie Mac's New Imminent Default Indicator
As announced in our
October 14 Single-Family Advisory e-mail, Imminent Default Indicator is a new Freddie Mac HAMP servicing tool that will help you determine if a borrower with a Freddie Mac mortgage is in imminent default. The tool replaces a portion of the current imminent default evaluation conducted prior to evaluating certain borrowers for eligibility for a modification under HAMP.
Imminent Default Indicator can help you identify most borrowers who are in imminent default. However, the determination of a borrower’s imminent default status will remain with you if Imminent Default Indicator is unable to determine whether the borrower is in imminent default. In addition, the new HAMP servicing tool:
- Provides a consistent and standard method to aid in evaluating borrowers with less than $25,000 in cash reserves.
- Assists in performing due diligence to better assess a distinct borrower risk profile.
- Offers a more streamlined, automated approach to borrower evaluations.
- Leverages local economic and current industry data in addition to Servicer-provided borrower data.
What You Need to Know About Imminent Default Indicator
- Imminent Default Indicator will be accessible from our Servicing Technology Tools Web page on FreddieMac.com, not from our HAMP secure Web page, as previously announced. Once available, you can access the tool using your Workout Prospector® user ID and password. Please read our October 14 e-mail for detailed information.
- Information regarding the tool, including the updated Imminent Default Indicator Technical Specifications Version 1.7 and an Imminent Default Indicator frequently asked questions document, can be found on our secure HAMP Web page.
- An Imminent Default Indicator Users’ Guide will be available soon to provide helpful information on how to use this new HAMP servicing tool.
- New Exhibit 90, Imminent Default IndicatorTM License Agreement, has been added to the Guide with this Bulletin. Servicers using Imminent Default Indicator are bound by all of the requirements of Exhibit 90 as if they actually signed the agreement as a “Licensee.”
Recent Treasury Announcements
Today's Guide Bulletin provides reminders and additional requirements related to the following Treasury announcements:
In addition to the HAMP changes above, with this Guide Bulletin, we are revising our servicing requirements on all mortgages being modified to eliminate the requirement for Servicers to obtain a subordination agreement from any junior lien holders unless the title insurer requires it to issue a title endorsement.
For more information, visit these resources:
About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico