A publication of Winter issue 2015 sponsored by CRE Finance World Winter 2015 41 Particular focus is given to assumptions and ownership transfers as they are the most complex and time sensitive, given binding sales contracts with huge financial implications for breach of contract. That said, all borrower requests are important and, consequently, Freddie Mac’s best practices apply to all types of consents, with service goals of 30 days for all “complex” consent requests and 15 days for “routine” matters. Consent Request Tracker In late 2011, Freddie Mac developed the Consent Request Tracker (“CRT”) to enable all servicers to have visibility into the consent request process for any request for which they have a role. CRT is a web based tool that allows Freddie Mac and the servicers to track the progress and issues (credit or legal) with any given borrower matter. It is both a workflow tool and a reporting tool for management. The tool tracks the request’s journey from party to party and there are comments fields for informational updates. The servicing parties update the tracker in real time, providing the most recent status and relevant commentary for the benefit of all other decision makers. CRT began as a rudimentary, shared pipeline report and has since been enhanced multiple times each year with additional business rules, reporting capabilities and data integrity controls. As a result, over time CRT continues to become more robust, comprehensive and interactive. The tool includes critical dates that measure the amount of time each step in the process is taking, and it clearly identifies where delays occur. Currently, no other tool exists in securitization that allows multiple servicing parties to simultaneously track where any given deal is in the process. As a result of the last round of CRT enhancements released at year-end 2014, users have a comprehensive dashboard that quickly shows them workflow at either the entity level or by individual user. It also provided flexible sorting capabilities, allowing users to view their work load in a wide variety of ways, including aging, request type, and more. With this version, CRT has become a more powerful and effective shared pipeline management tool, thanks in large part to its adoption by the Freddie Mac servicing community. Recent Developments In 2014, Freddie Mac has continued to reduce any remaining differences between processes for portfolio and securitized loans, with a keen focus on service level, quality of work, and the borrower’s overall experience. The Freddie Mac Multifamily Seller/Servicer Guide is continually updated as new initiatives are adopted. Freddie Mac, in collaboration with each of the Master Servicers for its securitizations, has redeveloped Freddie Mac’s comprehensive, standard forms for consent requests to facilitate their adoption post securitization. The servicers have agreed to utilize these forms, bringing much needed standardization to the process. For large deals that cross multiple securitizations and the portfolio, Freddie Mac has instituted kick-off calls and ongoing check-ins for all servicing parties. Where appropriate, streamlined submissions have been orchestrated with one servicer taking the lead on preparing the credit analysis. The single law firm approach was first instituted with large transactions but as discussed below now applies to all transactions regardless of size. In order to achieve our aggressive turnaround times for “best in class” service, the following significant process changes have been made to the Freddie Mac Servicing Standard: Chief Servicing Officer. Each primary servicer must designate a Chief Servicing Officer to attest to each consent request package regarding quality, completeness and adherence to the Servicing Standard. This allows the Master Servicers to utilize a “bank credit committee” model for review while reducing the number of additional information requests between the Primary Servicer and Master Servicer or Freddie Mac (in the case of portfolio loans). In effect, this role serves as a quality control measure and ultimately contributes to timeliness as the Master Servicer (and Freddie Mac) has a high quality, complete package to consider for approval. Streamlined Package Review Process. For securitizations closing in September 2014 and later, the Borrower consent packages will bypass the Special Servicer and go directly to the Directing Certificateholder (“DCH”). Omitting the Special Servicer removes considerable time from the process and gets the borrower’s request to the ultimate decision maker more quickly. Should any given DCH desire the Special Servicer’s evaluation and input, it is the DCH’s obligation to compensate the Special Servicer for the review and to provide a timely decision to the Master Servicer, generally within 5 days. This is no way impedes the Special Servicer’s duties or compensation with respect to non-performing loans. Legal Best Practices. The Servicing Standard now includes legal best practices. A single law firm is now responsible for virtually all borrower requests requiring legal review. This eliminates the additional time and cost involved with multiple law firms representing individual servicing parties and instead allows one law firm to represent the interests of the trust. Also, with the proposed Borrower’s Understanding the Freddie Mac Servicing Standard
CREFW-Winter Edition
To see the actual publication please follow the link above