Managing Distressed Properties

Transcript

1 Managing Distressed Properties Throughout the foreclosure process, you must monitor and protect the condition of the property. When you determine that a property is distressed, you must act promptly and in a responsible manner to protect both your interests and ours. This quick refere nce outlines the activities you must perform when you become aware of a distressed property. Please ensure that your foreclosure and bankruptcy representatives and other staff who work with distressed properties have a copy of this quick reference and that Single - Family they refer to it for all Freddie Mac mortgages. Refer to (Guide) Sections 8403.1 , 8403.2 Seller/Servicer Guide Guide Chapter 8404 for additional information on distressed , and properties. If you have any questions about managing distressed properties, please contact (800) FREDDIE. What Is a Distressed Property? that may pose a risk of property ownership to us. A distressed property is one that: A distressed property is real property  Requires substantial repairs, or  t physical deterioration, or Has sustained significan condemned by a local authority  Has been Examples of distressed properties include, but are not limited to properties that have been: Damaged from natural or man - made disasters   Abandoned and are deteriorating due to vacancy, was te and/or lack of utilities  Affected by environmental hazards such as oil or chemical spills, toxic waste or other poisons Reporting a Distressed Property to Us Report all mortgages on distressed properties that are 30 or more days delinquent to us via Ele ctronic Default Reporting (EDR) within the first three business days of the month following the month in which you identified the problem. Use default reason code 011 ( P roperty P roblem) and the appropriate occupancy code. If the problem identified is con taminated drywall report default reason code 032 (Contaminated Drywall) rather than default reason code 011 (P for additional information. EDR Quick Reference Guide Refer to the roperty P roblem). If the mortgage has been identified with a risk of property contact and report the mortgage to us, , you must ownership Form 1013, 1 - 4 Unit Property Inspection Report, and any other relevant even if it is not delinquent. To do this, submit information regarding the risk of property ownership to us within three busi ne ss days of identifying the risk. We may request additional documentation, if necessary. Additionally , y ou must also conduct a search of the records of the local safety violations filed code aut hority to determine if there are any outstanding health or against either the borrower or the property. Report any code violations that you discover to Freddie Mac within three business days of identifying the er , you must violation. Document when each condition was discovered and attach a copy of each Furth code violation. and documentation in your initial submission to Freddie Mac. submit all required information E - mail the documentation to us at [email protected] . You may also mail or fax the documentation to us : Regular or Overnight Mail Fax 4933 - Freddie Mac (571) 382 Special Asset Unit Attn: Attn: Special Asset Unit 8 100 Jones Branch Drive McLean, VA 22102 uly 2017 www.FreddieMac.com/learn/ J

2 Managing Distressed Properties Initiating Foreclosure on a Distressed Property ressed. To request our approval, You must obtain Freddie Mac’s approval to initiate foreclosure if the property is dist submit a detailed description of the situation and your recommendation within five business days of discovering the condition. We will approve or deny your request and provide you with further instructions. For additiona l information, . 9301.8 refer to Guide Section Evaluating the Situation Once you determine that a property is distressed, it’s important that you evaluate the situation thoroughly. When evaluating the situation, you should determine:  The borrower’s intenti ons  If the borrower has filed an insurance claim and is requesting any assistance The extent of damage and the cost to repair the property  If there is a lawsuit pending that may jeopardize our lien position  determine if a relief or workout option is appropriate. After you evaluate the situation, Monitoring a Distressed Property Perform the following activities to monitor and protect distressed properties:  ed under the Maintain a record of when the condition was discovered. If the property is abandoned and you are allow security instrument, take all necessary actions to protect the property from waste, damage and vandalism and to prevent any additional loss. Guide Exhibit 57, 1 - 4 Unit Ap proved Expense Note: If any expenses to protect the property will exceed the limits in Amounts , - you must obtain Freddie Mac’s written pre approval for the expense before incurring it. If unusual or emergency circumstances do not allow you to request our prior written approval, then you must notify us via the If we determine that your decision Reimbursement Sys tem by the next business day after you incurred the expense. to incur the expense was reasonable, we will reimburse the expense.  Inspect the property monthly until the condition is resolved.  File a claim with the appropr iate property insurer on our behalf if the property is damaged and th e borrower has not filed a claim. Always make certain that you comply with any VA, RHS, FHA, or MI requirements, if applicable. - Family This document is not a replacement or substitute for the information found in the Freddie Mac Single and/or terms of your Master Agreement and/or other Pricing Identifier Terms. Seller/Servicer Guide © 2017 Freddie Mac 2 J uly 2017 www.FreddieMac.com/learn/ Page

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