Freddie Mac has issued Bulletin No. 2008-1making changes to their Selling and Servicing requirements.

The following changes were made to the Servicing requirements;

Removing requirement that Servicers use designated counsel for foreclosures on and bankruptcies associated with Mortgages secured by 1-unit properties (with the exception of Manufactured Homes) in New Jersey and the New York City metropolitan area.

Because of the strides that have been made to improve foreclosure timelines in New Jersey and the New York City metropolitan area, Freddiee Mac is removing the requirement that Servicers use designated counsel in connection with bankruptcies associated with, and foreclosures on, 1-unit properties in these areas.
Freddiee Mac continues to require that all Servicers use designated counsel for foreclosures and bankruptcies on Manufactured Homes and 2- to 4-unit properties in New Jersey and the New York City metropolitan area. If a Servicer has poor time line performance, Freddie Mac reserves the right to require the Servicer to use designated counsel in connection with bankruptcies associated with, and foreclosures on, 1-unit properties in any designated counsel State.

Changes to collection requirements - breach letters

To provide earlier notification of the severe repercussions of Delinquency and default, and further encourage Borrowers to immediately contact Servicers to explore their workout options and avoid foreclosure, Freddie mac is changing the Guide to require that, effective March 1, 2008, Servicers send the breach letter (also known as the acceleration letter) to delinquent Borrower(s) no later than the 60th day of Delinquency.

Except for the change in timing of the breach letter, Freddie Mac continues to require that loss mitigation efforts continue after the breach letter is sent and there is no change to the timing requirements for referring Home Mortgages to foreclosure.
In connection with this change, effective April 1, 2008, Servicers are required to report to Freddie Mac via EDR the date the breach letter was sent to the Borrower.

Bankruptcy changes

Chapter 66, Foreclosure, mentions that when foreclosure counsel or the foreclosure trustee requests documentation, Servicers must supply it within two Business Days. Section 67.7 has now been modified to remind Servicers that they have the same responsibility to bankruptcy counsel.

Chapter 11 and Chapter 13 reorganizations under the United States Bankruptcy Code pose the risk of a claim being impaired or "crammed down". For this reason, a reference has been added to Section 67.7, Bankruptcy general requirements, to Section 67.13, Bankruptcy cramdowns, to remind Servicers of their responsibilities when a Borrower's reorganization plan requests a cramdown.

Designated counsel/trustee – two new Pennsylvania firms
Over the past several months Freddie Mac has expanded its designated counsel program. On January 8, 2008, Freddie Mac announced via e-mail that as part of the expansion two new Pennsylvania designated counsel firms: McCabe, Weisberg & Conway, P.C. and Powers, Kirn & Javardian, LLC were added. These new firms began accepting new program referrals on February 1, 2008.

Contact information for the two new Pennsylvania firms has been added to the designated counsel/trustee list on FreddieMac.com available at by clicking here. 

Updated contact information on Exhibit 85
Contact information on Exhibit 85 has been updated for First American Title Insurance Company and Old Republic National Title Insurance Company.

Additionally, listed under the section titled "Selling and Servicing Changes" is;

Freddie Mac is including its requirements for the purchase Texas Equity Section 50(a)(6) Mortgages in the Guide. Seller/Servicers must be approved to sell Texas Equity Section 50(a)(6) Mortgages to Freddie Mac. The Seller/Servicer should request this approval by contacting its Freddie Mac representative or calling (800) FREDDIE.

Each Servicer must be a Tier 1 or Tier 2 Servicer or concurrently transfer Servicing to a Tier 1 or Tier 2 Servicer.

The Servicer must have adequate procedures in place to receive and respond timely to Borrower inquiries, claims of defects and other complaints received in connections with a Texas Equity Section 50(a)(6) Mortgage. Servicers must cure all curable defects in accordance with the provisions of Section 50(a)(6) of Article XVI of the Texas Constitution within the time period specified in Section 50(a)(6).

To view the Bulletin in its entirety, including all changes to the Selling requirements, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, OH  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 450 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.