Freddie Calls On Loan Servicers To Diversify Foreclosure & Bankruptcy Referrals

Housing Wire reports:

• In a seller and servicer bulletin released Thursday morning, Freddie Mac announced some very big changes to how it expects its servicers to manage their foreclosure and bankruptcy referrals to eligible legal counsel in key U.S. states. The changes represent the first time that a GSE has exerted direct influence over servicing practices in what is typically a widely unregulated area of mortgage banking.

• In particular, Freddie Mac said that servicers must retain more than one law firm or trustee in high-volume foreclosure states, and that servicers will be required to have formal contingency plans in place for managing file referrals in the event that a law firm or trustee cannot accept new bankruptcy or foreclosure referrals.

For more, see Freddie Mac: Servicers Need to Diversify Foreclosure, Bankruptcy Referrals.

Go here to view the Freddie Mac's April 17 seller and servicer bulletin.