Freddie Mac Updates SCRA and Other Servicing Requirements

Article by: Dean Kanellis

On August 15, Freddie Mac issued Bulletin 2013-05, which, among other things, revises requirements relating to the SCRA and clarifies servicer responsibilities to effectively implement legal relief protections for borrowers in military service. In particular, Freddie will no longer require servicers to collect and report official documentation of a servicemember’s disability or death and available government benefits in the event a servicemember dies or becomes disabled while on active duty. Additionally, Freddie Mac created Section 82.2(c) to include the additional foreclosure relief it provides to Servicemembers and their Dependents.

Other revisions relate to:

  • Providing special requirements for Borrowers impacted by an Eligible Disaster, including the new
    Capitalization and Extension Modification for Disaster Relief;
  • Adding new Guide Chapter A66, Provisions for Expediting Freddie Mac Default Legal Matters,
    which includes the requirements for common methods of expediting Freddie Mac Default Legal
  • Revising property inspection requirements;
  • Revising requirements for the reimbursement of (1) attorney fees and costsrelated to contested foreclosures and mediation, (2) expenses incurred for title work, and (3) condominium, homeowners association (HOA) and Planned Unit Development (PUD)
    assessments in super lien States; and
  • Updating our unemployment forbearance requirements.

Our Fees

Our fees are competitive and conform to industry standards. In most instances, the following fee arrangements are available:

1. Collection matters are handled on a contingency fee basis, but an hourly option is available and sometimes requested by clients who hold large balance claims. At a clients’ request, fees for collection matters can be billed on a per item flat fee basis for letters, pleadings, motions, and executions.

2. Uncontested foreclosures and related bankruptcy and eviction matters are most often billed on a flat fee basis according to the Fannie Mae guidelines. Contested matters, and counterclaims, generally require additional flat fee or hourly billing, subject to client approval;

3. Uncontested replevin cases are also handled on a flat fee basis. If the right to recover possession is opposed, the matter is converted to an hourly fee basis, upon client approval;

4. Mechanic’s lien matters are treated the same as replevin cases, unless they involve multiple properties, or otherwise relate to unusual subject matter;

5. Our firm is also pioneering the availability and use of alternative fee arrangements (“AFA’s”) for legal services that have traditionally been billed hourly. The availability of AFA’s is a product of our firm’s ambition to deliver legal services in an efficient and cost-effective manner, and help clients more effectively forecast and contain costs. AFA’s are available for an ever expanding range of matters, including litigation defense, discovery disputes, and appellate practice.