On October 14th FHLMC issued Bulletin Number 2005-5, amending both Selling and Servicing requirements.

Some items Included in this bulletin are;

• Update to the Guide requiring Servicers to report to the IRS and to Borrowers a discharge of indebtedness occurring on or after January 1, 2005, on IRS Form 1099-C, Cancellation of Debt.
• Revisions to the Servicer Performance Profiles to align with changing industry trends and practices.
• Revisions to the collection efforts requirements for Mortgages with terms modified under the loan modification workout option.
• Revisions to the performance standards and the related compensation for alternatives to foreclosure.
• Elimination of Form 1132S, Authorization for Payment of Servicing Invoices Through the Automated Clearing House (ACH), and the revision of Form 1132, Authorization for Automatic Transfer of Funds Through the ACH, so that it can be used to establish the drafting of fees, regardless of invoice type.

For the full bulletin please click on the following link

FHLMC October 14th Bulletin Number 2005-5