Payoff Process Enhancements May 2014. © Freddie Mac 2 Overview of changes Yield Maintenance (YM)...
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Transcript of Payoff Process Enhancements May 2014. © Freddie Mac 2 Overview of changes Yield Maintenance (YM)...
© Freddie Mac 2
Overview of changes
Yield Maintenance (YM) calculation standardized
Allows more flexibility for Yield Maintenance payoffs with unscheduled date changes
Improve timelines of payoff exceptions
Extended Prepayment Option
© Freddie Mac 3
Payoff Calculation Standardization
Freddie Mac has 2 different Yield Maintenance Riders (7/93 or 9/96)
Effective June 2, 2014,Yield Maintenance calculation will be standardized with industry standards
Utilizing the 9/96 Rider or Standard Calculation starts with the first of the month following the date of the Note until the end of the Yield Maintenance period (full months - not partial)
No change to the calculation – Only 9/96 option available
The 7/93 option should no longer be utilized effective June 2, 2014
© Freddie Mac 5
Yield Maintenance Calculator - Rider
Change
» Rider selection
– No change to calculation
Yield Maintenance Type
» “9/96” Only Option
© Freddie Mac 6
Yield Maintenance Calculator – Remaining Term
Example
» Remaining YM Period - Full Months
© Freddie Mac 8
Payoff Date Changes - Flexibility
Extended Prepayment Option
» Borrower submits Request to Payoff mortgage to Servicer
» Servicer presents extended prepayment option to Borrower and provides the Borrower Authorization form
» Borrower initials and signs the Borrower Authorization form and returns to Servicer
© Freddie Mac 9
Borrower Authorization Form
Form must be initialed and signed by the Borrower; then returned to the Servicer
Servicer must maintain the original executed form
© Freddie Mac 10
Extended Option payoff request
Servicer completes the new “Loan Payoff Notice”
New Section “Extended Payoff” added to the Loan Payoff Notice
» This section is completed if the Extended Prepayment Option has been accepted by the borrower prior to submitting the request to Freddie Mac
Servicer completes the Extended Payoff section
» Extended payoff quote expiration must be populated
Servicer uploads the completed “Loan Payoff Notice” to DMS
© Freddie Mac 12
Payoff Expiration Date Scenario’s
Scenario 1
» Loan scheduled to payoff March 3, 2014
» Extended payoff Quote Expiration - March 10, 2014
Scenario 2
» Loan scheduled to payoff March 24, 2014
» Extended payoff Quote Expiration - March 31, 2014
Scenario 3 *
» Loan scheduled to payoff March 26, 2014
» Extended payoff Quote Expiration - March 31, 2014*If scheduled payoff is < less than 5 Business days before the last business day of the
month, the quote expiration date must be the last business day of the month
© Freddie Mac 13
Summary
Effective June 2, 2014
» Use standardized calculation for all payoffs (9/96 method)
» Utilize the new “Loan Payoff Notice” form
» Offer the extended payoff option to borrowers
» Maintain original borrower authorization
Questions?
» Contact your payoff representative
© Freddie Mac 14
Payoff Team
Name Designation EmailContact Number
Carl McLaughlinLoan Servicing Director [email protected] 704-714-3803
Sherry StanardMF Loan Accounting Manager [email protected] 703-714-2863
Felicia Hicks Team Lead [email protected] 703-714-2897
Marcus Valentine Team Lead [email protected] 703-714-3045
Winston Burrows Senior [email protected] 703- 714-2913
Payoff Mailbox: [email protected]