GSE Reminds Servicers of Default-Related Legal Services Requirements

In a notice Thursday, ""Freddie Mac"":http://www.freddiemac.com/ encouraged servicers to prepare for new requirements for default-related legal services that will take effect in less than a month.

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Under the new requirement, ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and Freddie Mac servicers must select qualified law firms by June 1 to handle all new referrals of default-related legal services, such as foreclosures, loss mitigation, bankruptcy, and related litigation. With the effective date nearing, Freddie Mac reminded servicers the selection process has several steps.

The requirements replace Freddie Mac's ""Designated Counsel Program"":http://www.freddiemac.com/service/msp/pdf/desigcounsel.pdf and Fannie Mae's ""Retained Attorney Network"":https://www.fanniemae.com/content/list/retained-attorney-list.pdf.

The new guidelines were first announced in November 2012 through separate bulletins from the GSEs. Fannie Mae's announcement can be found ""here"":https://www.fanniemae.com/content/announcement/svc1222.pdf, and Freddie Mac's bulletin can also be found ""online"":http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1225.pdf.

The law firms selected by the servicers must meet minimum GSE requirements and complete training.

The Federal Housing Finance Agency's (FHFA), the GSEs' conservator and regulator, ""directed"":http://dsnews.comarticles/fannie-mae-and-freddie-mac-to-do-away-with-attorney-networks-2011-10-18 Fannie Mae and Freddie Mac to phase out their current attorney networks and to adopt a uniform set of requirements for managing default-related legal services.

Freddie Mac encouraged employees of Freddie Mac servicers to enroll in its customer ""web training"":http://www.freddiemac.com/ontrack/html/LearningCenter/ClassDescription.jsp?crsNum=SAI_SSMLF.