Allowed State Foreclosure Timeline Delays and How Freddie Mac Calculates the Additional Time Granted for Such Delays

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Robyn Rich
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Exhibit 83A Determining State Foreclosure Timeline Performance Compensatory Fees State Foreclosure Timeline Performance Compensatory Fees Except as provided below, a Servicer will be assessed a

1 Exhibit 83A Determining State Foreclosure Timeline Performance Compensatory Fees State Foreclosure Timeline Performance Compensatory Fees Except as provided below, a Servicer will be assessed a compensatory fee for failure to complete a foreclosure within Freddie Mac s State foreclosure timeline (Refer to Exhibit 83, Freddie Mac State Foreclosure Timelines, plus any allowed State foreclosure timeline delay days applicable to the foreclosure.) Freddie Mac makes available to Servicers a Foreclosure Timeline Compensatory Fees Reference Guide ( Reference Guide ) on Freddiemac.com at the Learning Center. The Reference Guide can be found at under Secured Resources for Servicers. Allowed State Foreclosure Timeline Delays and How Freddie Mac Calculates the Additional Time Granted for Such Delays In accordance with Section , Freddie Mac will automatically add additional time to the State foreclosure timeline for a Mortgage for the following allowable delays: 02/15/17 Page E83A-1

2 EDR Delay Action Code Used to Report Allowable State Foreclosure Timeline Delay Bankruptcy Chapter 7* Bankruptcy Chapter 11* Bankruptcy Chapter 12* Bankruptcy Chapter 13* Probate Military Indulgence Contested Foreclosure HAMP in Review How Freddie Mac Calculates the Additional Time Granted for the Allowable Delay 65) and the end date (reported via EDR using default action code 76), up to a maximum of 80 days. 66) and the end date (reported via EDR using default action 59) and the end date (reported via EDR using default action 67) and the end date (reported via EDR using default action 31 and the end date (last cycle reported via EDR), up to a maximum of 120 days. 32) and the end date (last cycle reported via EDR), up to a maximum of 455 days. 33) and the end date (last cycle reported via EDR), up to a maximum of 90 days. HAMP in Review begin date (reported via EDR using default action code H7) and end date (reported via EDR using default action code HE), up to a maximum of 60 days. Note: Mortgages that become delinquent after June 30, 2012 will no longer have this allowable delay applied to the calculation of State foreclosure timeline compensatory fees. 02/15/17 Page E83A-2

3 EDR Delay Action Code Used to Report Allowable State Foreclosure Timeline Delay HAMP Trial Period Plan Unemployment Forbearance Standard Modification (or Flex) Trial Period Plan Alternative (Streamlined) Modification Trial Period Plan Appeal of Loan Modification Denial How Freddie Mac Calculates the Additional Time Granted for the Allowable Delay Trial Period Plan begin date (reported via EDR using default action code 09 and default reason code HMP) and the end date (last cycle reported via EDR), up to a maximum of 120 days. unemployment forbearance begin date (reported via EDR using default action code 09 and default reason code 016) and the end date (last cycle reported via EDR), up to a maximum of 180 days. Standard Modification Trial Period Plan or Freddie Mac Flex Modification Trial Period Plan begin date (reported via EDR using default action code BF) and the end date (last cycle reported via EDR), up to a maximum of 120 days. Streamlined Modification Trial Period Plan begin date (reported via EDR using default action code TM) and the end date (last cycle reported via EDR), up to a maximum of 120 days. 38) and the end date (last cycle reported via EDR), up to a maximum of 60 days. * For multiple bankruptcy filings, the 80- or 125-day exclusions apply to each independent bankruptcy filing. How to Calculate State Foreclosure Timeline Performance Compensatory Fees Based on the information the Servicer reports to Freddie Mac via EDR and the foreclosure sale transmission after the completion of the foreclosure sale, Freddie Mac will determine how long it took a Servicer to complete the foreclosure. The calculations for compensatory fees are currently based on the overall State foreclosure timeline from the Due Date of Last Paid Installment (DDLPI) to the date that the foreclosure sale was completed. 02/15/17 Page E83A-3

4 Loan Level Compensatory Fee Calculation Compensatory fee per loan calculation = actual State overall State foreclosure [( ) ( ) ( allowable Per )] ( foreclosure time line delays Diem ) time line standard Loan Level Compensatory Fee Calculation Formula Components Actual overall State foreclosure timeline Actual time taken by the Servicer to complete the foreclosure, from the DDLPI to the foreclosure sale. State foreclosure timeline standard As provided in Exhibit 83, this number represents expected Servicer performance in calendar days from the DDLPI to foreclosure sale. Allowable delays Time added to the State foreclosure timeline standard in accordance with Section Per diem A. For Mortgages referred to foreclosure on or after October 1, 2011, the per diem is equal to the outcome of this calculation: (Unpaid Principal Balance (UPB) ANY ) [ ] 365 days B. For Mortgages referred to foreclosure prior to October 1, 2011, the per diem is the lesser of either $30 per day, or the outcome of this calculation: (UPB ANY ) [ ] 365 days ANY used in the calculation above is the Accounting Net Yield (ANY) in effect on the day of the foreclosure sale. De Minimis Exception Compensatory fees will not be assessed if a Servicer s aggregate monthly compensatory fees are $25,000 or less. 02/15/17 Page E83A-4

5 Mortgages Excluded from State Foreclosure Timeline Compensatory Fee Calculations The following are excluded from State foreclosure timeline compensatory fee calculations: FHA, VA and RHS Mortgages Loans sold to Freddie Mac with recourse and repurchased prior to the assessment of the State foreclosure timeline compensatory fee For Mortgages referred to foreclosure prior to October 1, 2011, the Servicer will not be subject to compensatory fees for a foreclosure and/or bankruptcy handled by a designated counsel that is not completed within Freddie Mac s required State foreclosure timelines, as long as the delay was not caused by the Servicer s failure to (1) refer the Mortgage to foreclosure in accordance with the Guide requirements and/or (2) send all of the documentation, information, signatures and/or funds to the designated counsel as required 02/15/17 Page E83A-5

Effective Foreclosure Timeline Management Reference Guide

Effective Foreclosure Timeline Management Reference Guide A foreclosure timeline is the number of days it takes to process a foreclosure, from the due date of the last paid installment (DDLPI) to the foreclosure