consent, Freddie Mac will provide the most recent Borrower document modifications to the Servicer’s counsel at the beginning of a transaction request. This allows the Borrower to request its standard Freddie Mac loan document modifications during the assumption process without the need to continually re-negotiate what has been obtained at previous loan originations. These two legal best practices have significantly shortened the review timeline. New Fee Structure. In response to Borrower feedback, small post funding request fees have been eliminated beginning with September 2014 securitizations, with Freddie Mac making up the difference to the servicing parties with additional servicing compensation. This additional cost to Freddie Mac is offset by increased customer satisfaction. Assumption and defeasance fees remain but they are reasonable, compensate for the service provided and in the case of assumptions are capped at $250,000. Review fees are standardized and apply only to transactions requiring significant servicer involvement. Guidance Requests. Freddie Mac’s Asset Management staff is available to provide guidance on the Servicing Standard and a formal process has been designed to allow the servicers to consult with Freddie Mac on any matter that is unclear or debatable. Freddie Mac provides extremely quick feedback, CRE Finance World Winter 2015 42 which allows the servicer to more fully understand Freddie Mac’s approach to the servicing standards and to incorporate that approach into its analysis. Multi-loan Requests. In addition to providing consent request guidance as requested on securitized loans, Freddie Mac’s Asset Management staff also plays an important role in facilitating large, complex requests that involve loans in multiple securitizations, as well as on Freddie Mac’s balance sheet or in its warehouse. In these instances, Freddie Mac has stepped into an active “quarterback” role, facilitating open and ongoing communication regarding the request, overseeing a shared time line, and supporting package streamlining as appropriate. These efforts have resulted in efficient management of otherwise unwieldy requests and have produced very satisfied borrowers. There are many features of the Freddie Mac securitization program that make it a desirable financing and investment alternative. Happy borrowers are integral to the ongoing growth of the program as their satisfaction dictates its ultimate success. And that is true not just for our securitization program, but anyone else’s. We have been first in the space of using a servicing standard to drive growth in our securitization program. The broader industry could benefit from a similar approach utilizing the best practices outlined in this article. Understanding the Freddie Mac Servicing Standard “Freddie Mac borrowers expect that “service after the sale” be excellent and that there should be no discernable difference in service between a portfolio execution and securitization execution.”
CREFW-Winter Edition
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