Subject: Freddie Mac & NFIP Changes
From: 166 - Proctorcompliance <[email-masked]>
To: 166 - Proctorcompliance <[email-masked]>
Date: Fri, 22 Mar 2019 15:38:57 -0400

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 Freddie Mac Updates Servicer Requirements for REO Properties

To simplify the post-foreclosure processes and reduce Servicers’  expenses, Freddie Mac issued Bulletin 2019-6<https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fhs-233108.t.hubspotemail.net%2Fe2t%2Fc%2F*N3xk8ygzCXH7VkH81Q2ZwYbR0%2F*W2T_6PB5C6vn-W1B_zwM1y5jtF0%2F5%2Ff18dQhb0SfHp9c-kh2W5rs3c44T_wDdW4Wr-Y22zGp18VscYXZ1SddPTW53DQ4N5nJfJlW8XRf6c52nm-7W8Zj8XJ8YrnSzW3CkDND3DS-WZW4C2L4j5r8PJgW35_0M779vM-XW3H2N573YpJlsW5lTnhj5lhgkKW5zD8pY5D5x7tW5L1z245pdf0ZVsk3z25J0bCQW60Q75054SnN7W2lmmfD2N33B5W3_t0gL32gFvdW6vYDb47v70tSW4RYYVx3s1XjFW51G8kZ8sSHb9W3X0g0y6bp1cMVbq5fx4TKc2lW5wQ9wm2JczWkW5WRLpj42t5N3W8xSR2P8p-_wGW1x2NTX6p4XHfW5t1BZm1JP_Q3W5C96JZ6NDMT2W4WV7M14Y5_LZW8rh09w7x_p_LW95jvL32xlqmLW6b0QLQ2JVcCvVPB-6_1dgpthW5bGKgX5wgwxYW2_0dGr424f6gW965V4N1dCLt3W5jlyVq3MYw74W2vSTkl1NFfl4W8P4zkF2HbGyQW1s6xkD1m1ztKW972LK32nZ7szW16jnBK19rc8kW7nZ93v64M4WgN43TpbpN7b8MN8ZcKVfzck3xW3nwcmQ99BCq9VcYJKQ7dJ18nW4-6nCl5l49-H0&data=02%7C01%7Cproctorcompliance%40pfic.com%7C1cf5aac0e54246e0b72708d6aefe0773%7Cf1289cc584564f288eab700d1300fc5d%7C0%7C0%7C636888803406307741&sdata=QTPjh0otRpj1xJN3xex75n0QTKoyA6lv%2FSMpAORZSCg%3D&reserved=0>, announcing Guide updates that will become effective for all Freddie loans with a foreclosure sale held, or a deed-in-lieu of foreclosure executed, on or after July 15, 2019 and all active REO properties as of July 15, 2019.

Presently, Servicers are required to complete various post-foreclosure tasks, including maintaining insurance coverage, until the Property Condition Certificate (PCC) completion date. Additionally, Servicers are advancing payments to superior lienholders, as well as paying property tax and HOA/PUD assessments until there is an REO sale pending. The revisions eliminate several Servicer duties during the REO holding period.

After July 15th, unless notified otherwise by Freddie Mac, Servicers will no longer perform the following REO activities after successfully reporting the foreclosure or deed in lieu of foreclosure to Freddie:

   *   Securing, maintaining, inspecting and winterizing the property
   *   Paying property taxes, special assessments and HOA or PUD dues incurred, leasehold estate and Cooperative Unit fees and assessments
   *   Evicting the occupants in the property
   *   Paying utility bills incurred on an REO property, post-foreclosure sale
   *   Marketing, rehabilitating and selling the REOs

Additionally, after July 15th, Servicers must cancel existing property insurance policies 14 days after the foreclosure sale or deed-in-lieu has been reported to Freddie. The current process requires cancellation of the existing property insurance effective on the PCC completion date.   Consequently, reimbursement of insurance premium guidance also incorporates these changes, including Guide Section 9701.10, which was revised to reflect that lender-placed insurance premiums are reimbursable for a period of up to 14 days after the final non-REO activity or up to 14 days after the foreclosure sale and/or the deed-in-lieu of foreclosure has been successfully reported through the Service Loans application.

Freddie will also take over payment of property taxes, condo assessments, HOA dues, and leasehold estates payments after the Servicer reports the foreclosure sale or the settlement of a deed-in-lieu of foreclosure.  As such, Freddie will only reimburse the Servicer for payment of regular condo, HOA, or PUD assessments before the foreclosure sale date or settlement date of the deed-in-lieu of foreclosure, subject to certain terms.

Additionally, Servicers will be required to notify the taxing authority and HOA of Freddie’s ownership of the property within five days of reporting the foreclosure sale or deed-in-lieu of foreclosure, and must ensure the REO is titled as directed in revised Guide Section 9603.10.

To review the impacted Guide sections and associated revisions, see Freddie Mac Single-Family Seller/Servicer Guide Sections 8403.2, 8601.30 through 8601.32, 9202.12, 9301.1, 9603.4, 9603.8, 9603.10 through 9603.14, 9701.5 through 9701.7, 9701.9, 9701.10 and Exhibit 57.

 NFIP Cancellation Reason Code Revisions

Effective immediately, the National Flood Insurance Manual (October 2018) has been revised to incorporate changes to the requirements for Cancellation Reason Code 26<https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fhs-233108.t.hubspotemail.net%2Fe2t%2Fc%2F*N3xk8ygzCXH7VkH81Q2ZwYbR0%2F*W6-Rsb78n8mdFW5RhdCH58n5lp0%2F5%2Ff18dQhb0S3gV7zM__VTdMJq3QrdQRW1bs3tF8L2mYnW7YPjnm9bkn66W4VPbmG4lL4BrW5CjVbp6Vm_xHW47RWNx31z3qlW6mCfVl8SLqLMW8cqMfW8FxPX0W16GTkx66p_21W6Lf8Qx7gCPb4W5lJbF-5rhtJSW28XPgb1swYCSW31W-b-8j-wVTW4Zp30l1_KC0NW3SdRWl2h0c3NMMkzHBZjkCsW3TGqLs5HzRX5W2gsQf05CWP80W7VSmXb1MW2M6W4W5Ny21R2PY2N778WFHKJP6GW4LnLCk8dCGdpW9kCwlF22MkpfW7GR2CS5PfcTsN4-bZSfK7-NJW7C2MmC3shh8VW6LKzTX6j6tLjN7CPSDF3KBgKW4D9lXm5_R8WQW265SC_3pqxj0N6FvRXqFQg4dN2ypyYVr2B5jW7XMWX15JcZPdW4BXYBQ1ZvNc0W2lTjD764WRNsN7GgK2hv8jb5W7bjL7f3gqPzpW98sLgx4lSycTVzQXY-2H6Qt0W33-GjM99PYrfW1GhSy14dj_2cW3KhdbH2Lpv9gVZv_NJ8L23JHW4GpXtP12tGY_W16j0v27C8gzZW4Ph-gw7ZX9vnN2Q7TmTTwZq9W25Lym25b9_ZY0&data=02%7C01%7Cproctorcompliance%40pfic.com%7C1cf5aac0e54246e0b72708d6aefe0773%7Cf1289cc584564f288eab700d1300fc5d%7C0%7C0%7C636888803406317755&sdata=5HkM6oQjLEtPN0GfVGsTZx0wUcQDaLSzEpNQ2MIbUgE%3D&reserved=0>, Duplicate Policy from Source Other than NFIP.

Prior to the revision, Reason Code 26 required a statement from the lender accepting the non-NFIP policy as a valid replacement of the NFIP policy. The lender’s statement is no longer required.

An NFIP insurer can cancel an NFIP policy using this reason code, with a copy of the non-NFIP policy declarations page or other evidence, without obtaining further approval from FEMA if the policyholder:

   *   Purchased a duplicate non-NFIP policy prior to the NFIP policy’s purchase or renewal date, and
   *   Submitted the request to the NFIP insurer within 30 days of the NFIP policy becoming effective.

 Proctor will continue to monitor these topics and provide updates as they develop.

[Proctor Financial Inc 2 color_nobackground-1.png]<https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fhs-233108.t.hubspotemail.net%2Fe2t%2Fc%2F*N3xk8ygzCXH7VkH81Q2ZwYbR0%2F*W4cFrtG3xfrNBW3LDjsc1jP4BD0%2F5%2Ff18dQhb0SbTJ8XJbV6W7pgMSQ2qwv31W2sc_t11hkJwBVf5hpn57mvC2W1BQYdv6CLqhmW8mQCwm9bTNXYW954KlM4P0Yt6W2c51Nb834zcYW7b9JZ635_0L_W83C5JP1b-mFwN3dlwd8dtyKRW3v7CBP3Wlz2MW5QQgC-561xh-W3HtrQn65jrD8W7nSL7t5tg24_W7Wgk4j3QVfXSW1txG9N6GsfdKW8XNh8_7JMfRQMqkcPnhS_MMW7S7Z5G683GcKW8VV6Bg7r7dGPW7ykH1N7pWssnW7Bk28R2JCs0tW53RRHY8XR5yVW6cQfRF7zQW8pN7wpbjvpkFGqW67RrgW58R2jFW50V09D8-LLs0W50phDF7yntDBW1K90dp1XJ0rbW7wm6kK224H0GW6cwW4K1LRmZwW19zKNs45vVjtW4Pw1Vk2sbPxnVqT_Cy2-PVD7N4CMfSyc3N5TW11kQj062KB-RW2GD9D74bwhKYW3TZLrD3lMr5hVcgzMq9fFkYXW76WKHF7VrNx-W2gXdvy2pglVTW6vc-Z67NpsMrf3cFvNY04&data=02%7C01%7Cproctorcompliance%40pfic.com%7C1cf5aac0e54246e0b72708d6aefe0773%7Cf1289cc584564f288eab700d1300fc5d%7C0%7C0%7C636888803406317755&sdata=YEVqYLPbRapHxnLmynNvdsqp1Qd9zhbGW5RCia2FmoQ%3D&reserved=0>

Proctor Financial, Inc.   5225 Crooks Road    Troy  MI   48098   United States

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