FreddDieMac Solving Default Management Challenges Foreclosure Timeline Management-1

8/9/2019 FreddDieMac Solving Default Management Challenges Foreclosure Timeline Management-1

1/47

Solving Default Management

Challenges Series

Foreclosure Timeline Management


2/47


3/47

Freddie Mac 2009 3

Customer Educat ion

Tools and Tips

Visit our Learning Center to view other distance learning offerings:www.FreddieMac.com/learn

Close all other applications to enhance your workstations performance

Maximize the window used for viewing this recording

For technical support, call (866) 229-3239


4/47 Freddie Mac 2009 4

Customer Educat ion

Objectives

We want to provide you with an overview of thedefault management area with a focus on common

servicing challenges regarding foreclosure timelinemanagement.



Customer Educat ion

Agenda

Overview, challenges and best practices for foreclosuretimeline management:

Prepare for foreclosure

Selecting counsel/designated counsel and required documentation

Initiate foreclosure

Manage the foreclosure

Schedule the foreclosure sale

Conduct the foreclosure sale

Bidding instructions

Reporting requirements

Post foreclosure sale activities

Expense reimbursement

Canceling insurance



Customer Educat ion

Foreclosure Process Flow



Customer Educat ion

Foreclosure Process Flow

Prepare for Foreclosure Initiate Foreclosure Manage the Foreclosure

Schedule the

Foreclosure Sale

Conduct the

Foreclosure Sale

Post-FC Sale

Responsibilities



Customer Educat ion

Accelerating the Mortgage

First-lien, not previously modified

First-lien, previously modified

Second mortgage/HIL


9/47

Freddie Mac 2009 9

Customer Educat ion

Accelerating the Mortgage- Best Practices

Send an acceleration letter as soon as youidentify that the delinquent mortgage has a

borrower no contact situation or you identify

that the property is abandoned.


10/47

Freddie Mac 2009 10

Customer Educat ion

Selecting the Foreclosure Counsel orTrustee

Designated Counsel/Trustee

Non-designated Counsel/Trustee


11/47

Freddie Mac 2009 11

Customer Educat ion

Benefits of Using Designated Counsel

Loans in the Designated Counsel program receive

foreclosure timeline benefits in the Servicer Performance

Profile Foreclosure and bankruptcy fees and costs are managed

directly between Freddie Mac and Designated Counsel

Counsel will order the BPO (Brokers Price Opinion), and

prepare the bidding instructions for the foreclosure sale

Form 104DC(hard copy or online) is the only documentationrequired for reimbursement of foreclosure and bankruptcy

costs


12/47

Freddie Mac 2009 12

Customer Educat ion

Select Foreclosure Counsel


13/47

Freddie Mac 2009 13

Customer Educat ion Select Foreclosure Counsel, contd


14/47

Freddie Mac 2009 14

Customer Educat ion

Designated Counsel- Best PracticesPromote competition by hiring two or more attorneys in

each state where your volume is sufficient to warrantusing more than one attorney. Refer business to the

firms with the best timelines and performance

Always communicate your expectations to the attorney inwriting

Give the foreclosure attorney a current list of your

department personnel including name, telephone number

and title. Update this list regularly


15/47

Freddie Mac 2009 15

Customer Educat ion

Prepare for Foreclosure

Required documentation for counsel:

Copies of Note (original if required)

Mortgage or Deed of Trust

Copy of original title insurance policy

Copy of breach,accelerations or demand letter sent toborrower

Military affidavits

Executed Substitution of Trustee, as necessary

Payoff statement with per diem interest as of the date of the

foreclosure referral


16/47

Freddie Mac 2009 16

Customer Educat ion

Documentation- Best PracticesWhen acquiring new servicing portfolios address missing

mortgage assignment problems and other loan

documentation deficiencies through due diligence

reviews

Maintain a database of information. Include contactnames and telephone numbers to help you locate

representatives of prior Servicers who may need to sign

missing assignmentsProvide all reinstatement and payoff figures within 24

hours after you receive the request


17/47

Freddie Mac 2009 17

Customer Educat ion

Question

What percentage of delays in foreclosure are due

to poor coordination between attorneys and

Servicers?

a) 5%

b) 10%

c) 30%

d) 50%


18/47

Freddie Mac 2009 18

Customer Educat ion

Question

What percentage of delays in foreclosure are due

to poor coordination between attorneys and

Servicers?

a) 5%

b) 10%

c) 30%

d) 50%


19/47

Freddie Mac 2009 19

Customer Educat ion

Collect and Prepare Documentation

Begin collecting and preparing documentation

required for foreclosure referral before theacceleration period ends.


20/47

Freddie Mac 2009 20

Customer Educat ion

Initiate Foreclosure

120th day of

(150


21/47

C t Ed t i


22/47

Freddie Mac 2009 22

Customer Educat ion

Initiate Foreclosure, contdIf the mortgage is Then

Secured by a property

that is owned by a

borrower in active

military service

You must not initiate foreclosure without Freddie Macs prior approval.

Perform the following steps to request Freddie Macs approval to initiate

foreclosure on a property owned by a borrower in active military service:

1. Complete Form 105, Multipurpose Loan Servicing Transmittal(for first-lien mortgages) or Form 102, Second Mortgage/HIL Servicing

Transmittal(for second mortgages and home improvement loans).

2. Attach the following documentation to the Form 105 or Form 102:

Information on any statutory protection available to the servicemember

Whether the borrower has invoked any statutory protection

3. Send or fax the form and supporting documentation to the following

address:

Overnight or Regular Mail Fax

Attention: Foreclosure/Bankruptcy Unit (703) 918-98019

Freddie Mac8250 Jones Branch Drive

Mailstop A61McLean, VA 22102

Freddie Mac will provide you with further instructions


23/47

Customer Educat ion


24/47

Freddie Mac 2009 24

Customer Educat ion

Initiate Foreclosure

Low Balance Mortgages

You must recommend a charge-off to Freddie Mac

instead of a foreclosure for a loan with an unpaid

principal balance (UPB) of $5,000.00 or less,

regardless of the equity in the property Refer to Section B65.50 of the Guide for information

on managing delinquent low balance mortgages


25/47

Customer Educat ion


26/47

Freddie Mac 2009 26

Custo e ducat o

Initiate Foreclosure Best Practices

Communicate our foreclosure timeline

requirements to all of your staff and attorneys

Encourage them to actively decrease timelines

Instruct all of your staff and attorneys to strive fortimelines that are less than our published state

foreclosure timelinesMany of them include cushions for normal delays


27/47

Customer Educat ion


28/47

Freddie Mac 2009 28

Manage the Foreclosure, contd

Process the foreclosure in your institutions namename, or MERS (Mortgage Electronic Registration

System), if applicable

Refer to section 66.17 of the Guide

Customer Educat ion


29/47

Freddie Mac 2009 29

Manage the Foreclosure, contd

Respond to borrowers actions and resolve payment

disputes

Respond to payoff and reinstatement requests within 2

business days

Report approved repayment plans by transmitting EDR

Code 12, Repayment Plan

Customer Educat ion


30/47

Freddie Mac 2009 30

Manage the Foreclosure

Best Practices

After you have initiated foreclosure, continue to pursue a

repayment plan or an alternative to foreclosure inaccordance with Chapters A65 and B65 of the Guide

Work with your attorney to promptly document the

repayment plan in a written agreement or court stipulation

that allows the foreclosure process to resume if the

borrower defaults

As a best practice, request bi-monthly status updates

from the foreclosure attorney

Customer Educat ion


31/47

Freddie Mac 2009 31

Schedule the Foreclosure Sale

Obtain a property valuation, either an automated value orBrokers Price Opinion (BPO) from us via BPODirect no

less than 30 days prior to the foreclosure sale date, toassist in establishing bidding instructions

https://www.bpodirect.net

Request Freddie Mac approval to delay a scheduledforeclosure sale if your proposed delay causes you toexceed FM timelines

Report delays to foreclosure sale, such as bankruptcy orprobate via Midanet

Refer to Exhibit 83 of the Guide, for the foreclosure

timelines, by state

Customer Educat ion


32/47

Freddie Mac 2009 32

Schedule the Foreclosure Sale Best Practices

Analyze your average timeline performance for completed

foreclosures in each state on a monthly basis If your average foreclosure timelines exceed our foreclosure

timeline in a particular state, you will have the remainder of the

calendar year to improve your performance and possibly avoidpenalties

Use Freddie Macs Timeline ManagerSM to help you proactively

manage loans through the foreclosure process

Reminder: use the appropriate EDR code when

transmitting delay reasons to Freddie Mac

Customer Educat ion


33/47

Freddie Mac 2009 33

Question

The maximum allowable delay for Chapter 7

Bankruptcy is the same as the Chapter 13

Bankruptcy?

a) True

b) False

Customer Educat ion


34/47

Freddie Mac 2009 34

Question

The maximum allowable delay for Chapter 7

Bankruptcy is the same as the Chapter 13

Bankruptcy?

a) True

b) False


35/47


36/47

Customer Educat ion


37/47

Freddie Mac 2009 37

Question

You must report the Foreclosure Sales Results

within the first 3 business days of the month

following the foreclosure sale date?

a) True

b) False

Customer Educat ion


38/47

Freddie Mac 2009 38

Question

You must report the Foreclosure Sales Results

within the first 3 business days of the month

following the foreclosure sale date?

a) True

b) False

Customer Educat ion


39/47

Freddie Mac 2009 39

Conduct the Foreclosure Sale Best Practices

Obtain your confirmation via Midanet

indicating you have reported the foreclosure sale

results and retain for your records

Report accurate results the same day as theforeclosure sale date to:

Avoid late reporting penalties

Maximize points on your Servicer Performance Profile for the

Default Management criterion Average Number of Days to

Report Foreclosure Sales

Customer Educat ion


40/47

Freddie Mac 2009 40

Post Foreclosure Sale Responsibilities

Request reimbursement of expenses incurred up to and

including the acquisition date on Freddie Mac Real Estate

Owned (REO) properties The acquisition date is:

The foreclosure sale date or

Date of the expiration of the redemption period and/or

Confirmation/ratification date (whichever occurs last)

Request reimbursement of allowable expenses incurred afterthe acquisition date no later than 60 days after settlement of

the sale of the REO


Customer Educat ion


41/47

Freddie Mac 2009 41

Post Foreclosure Sale Responsibilities,

contd

Monitor status of the property via REO Manager

File and conclude property insurance claims, if

applicable, and cancel the existing property insurance

upon receipt of the Property Condition Certificate (PCC)and apply for premium refunds

Within 14 days of receiving the PCC indicating property is

vacant and inspected, cancel the property insurancepolicy


42/47

Customer Educat ion


43/47

Freddie Mac 2009 43

Managing Common Delays to the

Foreclosure Timeline: Probate

Report EDR code 31 (Probate) to report that theborrower is deceased, and the will is being validated

Contact your Freddie Mac Loss MitigationRepresentative to review alternatives to foreclosure



44/47

Customer Educat ion


45/47

Freddie Mac 2009 45

Resources

The Single-Family Seller/Servicer Guide

www.allregs.com

http://www.FreddieMac.com/singlefamily/

FreddieMac.com

Single-Family Seller/Servcier GuideBulletins

The Learning Center

Training questions

[email protected]

571-382-5214

Customer Educat ion
http://www.allregs.com/http://www.allregs.com/


46/47

Freddie Mac 2009

Learning Center UpdatesThe Learning Center Updatespage provides quick access to new and updatedresources to help you with underwriting, mortgage products, selling, servicing, and more.

View a summary of recent changes at www.FreddieMac.com/learn/ch_ind/

www.FreddieMac.com/learn/subscribe

Receive a timely email informing you of newand updated training and education resources.

Its a notification thatsnotjustanother email in your inbox!

atAlsoFREE!Subscribe!

Customer Educat ion
http://www.freddiemac.com/learn/ch_ind/http://www.freddiemac.com/learn/subscribehttp://www.freddiemac.com/learn/subscribehttp://www.freddiemac.com/learn/ch_ind/


47/47

Freddie Mac 2009 47

Thank you for your participation!

FreddDieMac Solving Default Management Challenges Foreclosure Timeline Management-1

Documents

Transcript of FreddDieMac Solving Default Management Challenges Foreclosure Timeline Management-1