Freddie Mac Requires Lender-Place Insurance Compliance Certification, Updates Foreclosure And Transfer Tax Policies

Foreclosure Freddie Mac Mortgage Servicing Force-placed Insurance

On March 17, Freddie Mac issued Bulletin 2014-3, which requires servicers to provide a certification that they are or will be in compliance with new lender-placed insurance requirements announced in Bulletin 2013-27. With regard to alternatives to foreclosure, Bulletin 2014-3 (i) makes optional requirements announced in Bulletin 2013-27 related to the processing of modifications for mortgages with pre-modification mark-to-market loan-to-value ratios less than 80%; (ii) requires servicers to provide notices on behalf of Freddie Mac in certain circumstances when Freddie Mac participated in evaluating a borrower for a workout or relief option and declined to approve the workout or relief request; (iii) reorganizes property valuation requirements for modifications; and (iv) provides additional guidance related to paystub requirements for income documentation submitted with a Borrower Response Package. Finally, Freddie Mac also (i) updated requirements for the reimbursement of transfer taxes; (ii) permitted servicers to instruct foreclosure counsel to conduct a foreclosure in Freddie Mac’s name, without obtaining prior written approval, if doing so would avoid any obligation to pay a transfer tax; and (iii) provided guidance on numerous additional servicing issues.