Freddie Mac wants to keep closer tabs on all the organizational changes made by its sellers and servicers and has revised its seller/servicer guide's notification policy to reflect its heightened interest.
The revisions, outlined in Freddie's Seller/Servicer Bulletin 94-6,become effective Aug. 1 and will require the use of a new FHLMC notification report, Form 1107.
Freddie said its organizational notification policy is, for the most part, unchanged - a one business day-after notification requirement remains in effect for most organizational or status changes, such as name changes, fiscal year-end changes, and major changes in ownership or organization brought about by occurrences such as mergers or consolidations.
One exception, however, is when a seller/servicer plans to transfer either all of its assets or the assets of a mortgage-related function, such as originations or servicing, without the transfer of accompanying liabilities to an institution that is not a Freddie Mac-approved seller/servicer. When this is planned, the transferring institution must notify Freddie at least 75 business days prior to the proposed asset transfer. These transfers typically occur during RTC-assisted transactions, Freddie said, but they do occur in other instances as well.
In this type of organizational change, the transferring seller/servicer's status, number and accompanying rights and privileges will not transfer to the institution intended to receive the assets unless it's an approved Freddie seller/servicer. That institution must obtain Freddie Mac's approval prior to the transaction.
Freddie said for it to be able to review the application and render a decision, the proposed transferee must submit an application within 75 business days of any transfer. Failure to do so will preclude the transferee from selling mortgages to, or servicing for, Freddie Mac.
If a proposed transfer of assets includes a transfer of servicing, the request for approval of the proposed transfer of servicing should be submitted along with the application to become a seller/servicer, but no later than 30 business days prior to the effective date of the transfer.
If the proposed transfer of servicing will result from an organizational or status change, the required request for approval of transfer of servicing must be submitted 30 days prior to the effective date of the proposed transfer, even though the notification of the organizational change is not required until after the change has occurred.