MCLEAN, Va., Oct. 31, 2012 /PRNewswire/ -- Freddie Mac (OTC:FMCC) today announced the nation's nine mortgage insurance companies have signed delegation agreements so Freddie Mac servicers can approve short sales and deeds in lieu of foreclosure on the insurance companies' behalf beginning November 1, 2012. By reducing the potential costs, delays and uncertainty involved in the short sale and deed in lieu process, the delegation agreements should enable more distressed borrowers to avoid foreclosure.
- The delegation agreements authorize Freddie Mac to approve short sales or deeds in lieu of foreclosure for distressed borrowers with Freddie Mac owned-or guaranteed mortgages without a separate and potentially time-consuming review by the mortgage insurance company. Freddie Mac will instruct its servicers to use the delegations to more quickly and efficiently help borrowers through the short sale process.
- The mortgage insurance companies who signed the delegation agreements with Freddie Mac are CMG Mortgage Insurance Company, Essent Guaranty, Inc., Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Company, Radian Guaranty, Inc., Republic Mortgage Insurance Company, Triad Guaranty Insurance Corporation, and United Guaranty Corporation.
- Today's announcement builds on recent Freddie Mac efforts to encourage more short sales. On November 1, Freddie Mac's new Standard Short Sale will go into effect, streamlining the short sale approval process and broadening the ability of servicers to help distressed borrowers.
- Freddie Mac's Congressional charter requires private mortgage insurance if the borrower's downpayment is less than 20 percent of the value of the home they are financing
- The Freddie Mac Guide Bulletin announcing the changes can be found at http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1223.pdf
Attribute to Tracy Mooney, Senior Vice President, Servicing and REO at Freddie Mac:
"We applaud the nation's mortgage insurers for committing to work with us and our servicers to help more borrowers obtain short sales and other foreclosure alternatives. By paving the way for more borrowers to avoid foreclosure, today's announcement will support the housing recovery and help reduce taxpayer losses."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing. www.FreddieMac.com.
SOURCE Freddie Mac