Advance Management Program (AMP) FAQ

In the context of VPC transfers, a Legacy Servicer is also referred to as a Transferor Servicer (defined as "Transferor Servicer" in the interim servicing agreements). Legacy Servicers are participants in the VPC program, where a Legacy Servicer's Servicing Contract Rights (SCRs) are relinquished to and purchased by Freddie Mac at the time of VPC transfer of a pool of eligible loans.

In the context of VPC transfers, an Interim Servicer is also referred to as a Transferee Servicer (defined as "Transferee Servicer" or "Servicer" in interim servicing agreements). Freddie Mac leverages different types of Interim Servicers for different purposes. One example is an aggregator or aggregation Interim Servicer, who assists Freddie Mac in preparing reperforming loans (RPL) and non-performing loans (NPL) for sale in conjunction with servicing.

Reimbursement for Servicer advances will be accomplished via the existing Automated Clearing House (ACH) process. The Legacy Servicer receives reimbursement via the boarding balance process in AMP at the time of transfer. Funds are sent via the ACH process using the ACH instructions that they have on file for the Servicer number. The Interim Servicer must submit the request for reimbursement via AMP monthly as expenses are incurred, and at the trigger event they must file applicable claims in PAID. Funds are returned via the ACH process utilizing the ACH instructions on file for the Servicer number as well.

A Transferor Servicer has two main responsibilities:

To Freddie Mac: Provide the requested balances and specific information (if requested) on the Advance Balance Report and upload the Advance Balance Report via AMP. This is the file that we’ll use to reimburse your outstanding recoverable expenses.

Note: unrecoverable advances should be submitted in PAID (Payments Automated Intelligent and Dynamic).

To Transferee Servicer: Provide documentation, coverage dates and other relevant expense information (e.g., invoices) at the time of transfer.

For the Transferor Servicer, recoverable advances will be reimbursed using the Advance Balance Report and won’t require coverage dates at the time of VPC; however, the coverage dates should be provided to the Transferee Servicer. The expectation is to adhere to the allowable limits in the Single-Family Seller/Servicer Guide (Guide).

Unrecoverable advances will be reimbursed using PAID, which may require coverage dates at the time of submission, per Guide policy.

No. Using the AMP tool, servicing advances will be reimbursed using a significantly easier process and won’t require coverage dates.

At the final claim event (foreclosure, short sale, third-party foreclosure sale, deed-in-lieu, payoff, and other events), the Transferee Servicer may need to file a final claim in PAID that will include all advance activity, identical to the claim process employed on all Freddie Mac loans.

After submission of the Advance Balance Report, the Transferor Servicer is responsible for responding timely to any inquiries about the amounts and provide all invoices, documents and trailing expenses to the Transferee Servicer.

There will be a Detailed Adjustment Report (DAR) containing a loan modification adjustment credit for the capitalized advances in the reporting cycle after the modification settles, which will be remitted in AMP by the Transferee Servicer to clear the advance balance.

DAR credits will not be drafted. (Refer to FAQ #6.)

For existing active loans on the Transferee Servicer’s portfolio as of October 27, 2023, we’ll leverage an agreed upon conversion balance as the beginning balance in AMP.

For subsequent VPC-transferred loans on the Transferee Servicer’s portfolio, the beginning balance will be established using the Advance Balance Report reconciled to the boarding balance from the time of transfer.

The existing reports in eBill contain an AMP identifier flag as well as the gross transactions for each of the four AMP expense codes. These existing reports in combination with the new AMP reports allow you to reconcile your activity monthly.

Question: If the Transferor Servicer determines that some of the unrecoverable advances weren't part of the initial claim submission in PAID, can they come back later and submit the remaining unrecoverable advances in PAID? Does anything need to be shared with the Transferee Servicer? (Applicable to Transferor Servicers)

Answer: Servicers should make every attempt to submit claims timely, as outlined in the Guide and VPC Agreement. The Transferor Servicer can submit additional claims for unrecoverable advances in PAID if it's later discovered they were missed in the initial submission. Because the advances cannot be claimed back to the borrower, nothing needs to be shared with the Transferee Servicer.

Servicers must make every effort to ensure the advances included on the Advance Balance Report are reconciled and free of errors and defects.

In situations where advances were claimed erroneously, the Transferor Servicer must work in partnership with the Transferee Servicer to adjust any incorrect advances and report the outcome to Freddie Mac. As detailed in the VPC Agreement, the Transferor Servicer shall act in good faith to work cooperatively with Freddie Mac and the Transferee Servicer throughout every stage of the process to determine and reconcile all servicing advances.

For trailing advances, the Legacy Servicer should pass them to the Interim Servicer, who can submit them via AMP. Once they receive the funds, they can pay the Legacy Servicer.

The process to submit RPAs in PAID when approval is needed to exceed the Guide allowable limits hasn’t changed. If the RPA is approved and you seek reimbursement prior to a trigger event, submit the approved amount as an advance in AMP.

After a loan modification occurs, you can use the following PAID expense codes for reimbursement:

• 300003: Recordation Fees
• 300004: Title Costs, if applicable (except with respect to title costs in connection with a foreclosure proceeding)
• 042001: Notary Fees

Freddie Mac will provide initial access starting August 1, 2024. Beginning on August 12, 2024, Access Manager administrators will be able to provide user access. If you need additional help, reach out to the Customer Support Contact Center (800-FREDDIE).

No. The required fields on the boarding balance template are the Freddie Mac Loan Number, Corporate Recoverable Balance and Escrow Recoverable Balance. The Third-Party Recoverable Balance and Corporate Non-Recoverable Balance fields aren’t required, but Servicers should enter $0 if a balance won’t be added.

The Legacy Servicer and Interim Servicer should work to have their file submitted by the 5 business day after the loans have transferred.

No. The initial boarding balance file shouldn’t contain any negative balances. Negative transfer balances reflect a credit/prepaid amount, and funds should be provided to the Interim Servicer and not included on the boarding balance template.

No. Only loans with balance corrections should be resubmitted.

Payment will be issued within two business days after the loans are reconciled. Payment will be made to the ACH instructions on file for the applicable Servicer number.

Legacy Servicers participating in the VPC process for the first time must submit a 1132AMP form to the CashCollections mailbox ([email protected]) to receive payment. If you don’t have the 1132AMP form, reach out to the Interim Servicing team at [email protected].

After being paid, if the Legacy and Interim Servicers determine that the balance amount(s) submitted were incorrect even if they match, both Servicers will need to resubmit the delta amount, not the full amount. For example, if the escrow amount was reconciled and the Legacy Servicer was paid $100, but the correct amount was $120, both Legacy and Interim Servicers will need to submit $20 in escrow amounts through a subsequent boarding balance submission. Only then will the Legacy Servicer be reimbursed the total $120.

Servicers must make every effort to provide the correct information.

No. If you have identified an error with boarding balances for VPC deals prior to July 2024, please reach out to the Interim Servicing Team at [email protected].

Yes. Subservicers will need to be given access to AMP through Access Manager to submit a boarding balance file.

Payments are made utilizing the ACH instructions on file for the applicable Servicer number. If needed, the Legacy Servicer will need to transfer funds to their subservicer.