Freddie Mac will charge mortgage servicers more for revising foreclosures or violating certain reporting timelines.
The government-sponsored enterprise will issue a $5,000 fine (previoiusly $250) to servicers for failing to report on the status of at least 75% of their mortgages as part of a file review program updated last year. A second violation in one 12-month period will cost a servicer $10,000 (previously $550), and a third violation would result in a $15,000 fine (previously $1,000), according to an alert sent to servicers Tuesday.
If a servicer is forced to “rollback” an REO, meaning it must pull the mortgage out of REO status and back into foreclosure, Freddie will charge a $1,000 compensatory fee.
“This compensatory fee is designed to recover the labor and other costs Freddie Mac incurs to correct this serious violation in a timely manner,” Freddie said in the alert.
Servicers are required to maintain accurate files and records. If it has to use Freddie staff to reconstruct faulty archives, Freddie will charge $76 an hour per employee rather than the $100 per loan previously charged.
The GSE contracts with more than 1,400 servicers to handle its $1.8 trillion servicing portfolio.
A report filed last week from the Federal Housing Finance Agency Inspector General showed Freddie Mac and the FHFA did not provide enough oversight for its servicers.