Freddie Mac Doubles Financial Incentives To Servicers

August 29, 2008

Freddie Mac told mortgage servicers on July 31 it was doubling the amount of money it pays for each workout that keeps a delinquent borrower with a Freddie Mac-owned mortgage out of foreclosure. Freddie Mac also announced it will 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.

"We are taking these steps because we want to reinforce the tremendous importance of workouts and reward their use," said a Freddie Mac vice president. "Giving our servicers more time and greater compensation to help troubled borrowers is fundamental to preserving homeownership and maximizing our efforts to minimize foreclosures."

Posted in Lending, Real Estate