Freddie Mac Single-Family Seller/Servicer Guide 9201.1 — Rationale for Servicer loss mitigation activities
Freddie Mac Guide §9201.1 (Rationale for Servicer loss mitigation activities). Gap-fill (verbatim, ID-diff).
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Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 9201.1 — Rationale for Servicer loss mitigation activities — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Single-Family Seller/Servicer Guide 9201.1 — Rationale for Servicer loss mitigation activities
Freddie Mac’s interest in a Mortgage, the Borrower and the home securing the Mortgage begins when Freddie Mac purchases the Mortgage. The Borrower’s ownership of the home is jeopardized when he or she stops making monthly payments. Freddie Mac is committed to helping Borrowers find a solution to the Delinquency if they are experiencing financial difficulty in making the Mortgage payment. The Borrower must make a commitment to reduce any discretionary, unnecessary expenditures as a condition of Freddie Mac granting a relief or workout option. Additionally, the Borrower is expected to work out similar relief or workout options with other creditors whenever possible. Freddie Mac recognizes that not every Borrower who is experiencing financial difficulty can retain home ownership. When this is the case, the Servicer can help a Borrower understand the benefits of selling the property to avoid the consequences of foreclosure, where applicable, and the risk of a deficiency judgment. Freddie Mac wants the Servicer to pursue alternatives to foreclosure whenever possible because they benefit not only the Borrower but also the Servicer, Freddie Mac and other interested parties in the Mortgage by: ■ Eliminating the staff time and expense the Servicer incurs to service a delinquent Mortgage or a Mortgage in foreclosure ■ Reinstating the Servicing fee income the Servicer earns if a Mortgage Delinquency is cured or reinstating part or all of the Servicing fee income if a Mortgage is modified ■ Improving the Servicer’s relationship with the Borrower ■ Minimizing Freddie Mac’s credit losses ■ Reducing an MI or guarantor’s claim payment, when applicable Even after the Servicer has initiated foreclosure, it should still pursue alternatives to foreclosure to mitigate potential credit losses, whenever possible.
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Source of record: https://claudeforcompliance.com/regs/fhlmc-9201-1/
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