Beginning in February, Freddie Mac will require separate evaluations for cash contributions and promissory note contributions from borrowers for short sales and deeds-in-lieu of foreclosure.
Freddie Mac also announced changes to its standard and streamlined modification processes, which will go into effect April 1. Borrowers with market-to-market loan-to-value (LTV) ratios of less than 80 percent are now eligible for a 480-month or 360-month modification with lower principal and interest payments than their current loans.
A 360-month modified loan must lower a borrower's principal and interest payments by at least 20 percent. If a borrower wants a modification for less than 360 months, the servicer must offer them a shorter-term loan ""if certain requirements are met,"" the new rules state.
Freddie Mac is also making changes to its valuation process for foreclosure sale bids. Previously, servicers relied on Freddie Mac's BPOdirect for a valuation prior to a foreclosure sale. Going forward, servicers will rely on a new function, Obtain Credit Bid from Freddie Mac.
The servicer will receive a credit bid and a date through which that bid applies. Freddie recommends servicers request a bid between 30 and 90 days prior to the foreclosure sale date in order to ensure they receive a bid in time and it is still relevant at the time of sale.
Freddie Mac also updated its rules regarding forbearance and modifications for disaster victims. Servicers may use their own discretion to determine the length of time for a short-term forbearance for borrowers in disaster areas, ""provided the servicer calculates the length of forbearance using the extent of damage and the financial impact the eligible disaster has on the borrower,"" Freddie Mac stated.
When modifying loans for disaster victims, servicers may no longer offer adjustable-rate mortgage (ARM) loans. Previously, if a borrower in an ARM wished to obtain a modification but maintain an adjustable rate, the servicer could submit a request to Freddie Mac for permission. This option is no longer available starting February 1.