Freddie Mac boosts mortgage servicer incentives
Mortgage financier to offer increased payments to loan servicers in effort to increase mortgage workouts.
July 31 2008 - Freddie Mac is doubling the amount of money it pays loan servicers for each successful mortgage workout among other measures to keep struggling borrowers out of foreclosure, it said Thursday.
The mortgage financier is also giving more time to negotiate workouts in states with fast foreclosure processes and will reimburse servicers for door-to-door outreach.
Freddie will pay $500 for each repayment plan and $800 for each loan modification on Freddie-owned mortgages. Servicers will receive $2,200 for each short sale where Freddie accepts less than the full amount owed on the mortgage.
Freddie Mac will also start reimbursing servicers for the cost of door-to-door outreach programs, give servicers more time to negotiate workouts in states with fast foreclosure processes, and make administrative changes intended to streamline the workout process. Freddie Mac will extend the time for foreclosures in Washington D.C. and 20 states, including Arizona, California, Georgia, Michigan, Mississippi, Tennessee and Texas.