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Guided Steps to Loss Mitigation Options

Get a head start by answering a couple of questions about your borrower’s hardship and get instant results such as key requirements for applicable mortgage relief or workout options based on your responses. Connect to detailed requirements, training and additional info for each result to determine the best outcome for your borrower.

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A few easy steps to faster mortgage resolution

Is the borrower experiencing a hardship?
What type of hardship is the borrower experiencing?

Temporary but ongoing

A current hardship i.e. unemployment, where the borrower needs temporary mortgage relief.

Ability to resume payments

A resolved hardship where the borrower has the financial capacity to pay their pre-forbearance monthly mortgage payments again.

Long-term or permanent

An unresolved hardship where the borrower needs additional mortgage payment relief.

Does the borrower want to remain in the home or leave?

Results Overview: Loss Mitigation Options

This guided experience is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer Guide or terms of your Master Agreement or other Pricing Identifier Terms. The below information is a summary of key requirements.

If the borrower is not experiencing a hardship and wants lower monthly mortgage payments by lowering the interest rate, review one of our refinance mortgage products for more information.

For questions, contact our Customer Support Contact Center (800) FREDDIE.

This guided experience is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer Guide or terms of your Master Agreement or other Pricing Identifier Terms. The below information is a summary of key requirements.

Criteria Highlights Forbearance
Mortgage assistance type Relief option
Hardship type Temporary but ongoing: A current hardship i.e. unemployment, where the borrower needs temporary mortgage relief.
Description
  • A written agreement that defines whether the borrower may make reduced or no monthly payments for a specified period of time.
  • A term of 1-6 months, and one or more extension of 1-6 months, not to exceed 12 months.
  • The P&I must be lower than the contractual P&I.
Eligibility
  • The borrower is current or less than 360 days delinquent.
  • The property is a primary residence.
Documentation If Quality Right Party Contact is achieved, no Borrower Response Package is required
Servicer Incentive N/A
Related Guide Information Guide Chapter 9203
Resources and training Visit the Forbearance web page
Disaster and National Emergency Declaration related requirements

For questions, contact our Customer Support Contact Center (800) FREDDIE.

This guided experience is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer Guide or terms of your Master Agreement or other Pricing Identifier Terms. The below information is a summary of key requirements.

Criteria Highlights Reinstatement
Mortgage assistance type Relief option
Hardship type Ability to resume payments: A resolved hardship where the borrower has the financial capacity to pay their monthly mortgage payments again.
Description A borrower restores a delinquent mortgage to current status by paying the total delinquent amount, including advances, delinquent principal and interest, legal costs and other expenses incurred and that are past due.
Eligibility The borrower must have the financial capacity to bring the mortgage current.
Documentation The borrower must submit information demonstrating their financial ability to pay a full or partial reinstatement and/or repayment plan.
Servicer Incentive N/A
Related Guide Information Guide Chapter 9203.
Training and resources Visit the Reinstatement web page.
Disaster and National Emergency Declaration related requirements Visit the Disaster Relief web page or view Guide Chapter 8404.
Criteria Highlights Repayment Plan
Mortgage assistance type Relief option
Hardship type Ability to resume payments: A resolved hardship where the borrower has the financial capacity to pay their monthly mortgage payments again.
Description
  • An agreement that gives the borrower a defined period of time to bring the mortgage current by paying regular monthly payments plus an additional agreed upon amount in repayment of the delinquency.
  • The term can be one month and less than or equal to 12 months, unless a greater term is approved by Freddie Mac.
Eligibility The borrower must have the financial capacity to bring the mortgage current.
Documentation The plan must be sent to the borrower, not required to sign.
Servicer Incentive $500
Related Guide Information Guide Section 9203.8.
Training and resources Visit the Repayment web page.
Disaster and National Emergency Declaration related requirements Visit the Disaster Relief web page or view Guide Chapter 8404
Criteria Highlights Payment Deferral
Mortgage assistance type Relief option
Hardship type Ability to resume payments: A resolved hardship where the borrower has the financial capacity to pay their monthly mortgage payments again.
Description An agreement where the borrower will be brought current by deferring up to two months of delinquent P&I, creating a non-interest-bearing forborne balance that will become due at the earlier of the mortgage maturity date, payoff date, or upon transfer or sale of the mortgaged premises
Eligibility
  • The borrower has the financial capacity to resume making their monthly payments, but who are unable to afford the additional monthly contributions required by a repayment plan.
  • Borrower must be 30- or 60- days delinquent.
  • The borrower must have made, at minimum, two consecutive monthly payments, resulting in the delinquency status remaining unchanged for at least three consecutive months.
  • The mortgage must have been originated at least 12 months prior to the evaluation date for the Payment Deferral.
  • The mortgage must be a conventional First Lien Mortgage currently owned or guaranteed by Freddie Mac; and
  • May be a fixed-rate Mortgage, an ARM or a step-rate Mortgage.
Documentation
  • A complete Borrower Response Package is not required to evaluate the borrower.
  • A Servicer may use an Evaluation Notice.
Servicer Incentive $500
Related Guide Information Guide Section 9203.18.
Training and resources Visit the Payment Deferral web page.
Disaster and National Emergency Declaration related requirements

For questions, contact our Customer Support Contact Center (800) FREDDIE.

This guided experience is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer Guide or terms of your Master Agreement or other Pricing Identifier Terms. The below information is a summary of key requirements.

Criteria Highlights Freddie Mac Flex Modification®
Mortgage assistance type Workout option (home retention)
Hardship type Long-term or permanent: An unresolved hardship where the borrower needs a lower monthly mortgage payment.
Description
  • The Flex Modification program is intended for borrowers who are unable to resume making their pre-forbearance payment by targeting a payment reduction by capitalizing arrearages, extending the term and potentially lowering the interest rate.
  • A borrower completes a three-month trial period plan.
Eligibility
  • A borrower is 60 days or more delinquent.
  • A borrower may be current or less than 60 days delinquent and occupies the property as a primary residence.
  • The mortgage must have been originated at least 12 months prior to the evaluation date.
  • The mortgage must be a conventional first lien mortgage currently owned or guaranteed in whole or in part by Freddie Mac.
Documentation
  • A borrower must complete a Borrower Response Package.
  • Requirements differ for a Streamlined offer of a Flex Modification.
Servicer Incentive

Within two months of a successful settled modification:

  • $1,600 if mod is < 120 DD
  • $1,200 if mod is 121 - 210 DD
  • $400 if mod is > 210 DD
Related Guide Information Guide Section 9206.2.
Training and resources Visit the Flex Modification web page.
Disaster and National Emergency Declaration related requirements Visit the Disaster Relief web page or view Guide Chapter 8404.

For questions, contact our Customer Support Contact Center (800) FREDDIE.

This guided experience is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer Guide or terms of your Master Agreement or other Pricing Identifier Terms. The below information is a summary of key requirements.

Criteria Highlights Standard Short Sale
Mortgage assistance type Workout option (liquidation)
Hardship type Long-term or permanent: An unresolved hardship where the borrower needs to transition to more affordable housing.
Description
  • A liquidation option for a borrower who is unable or unwilling to sustain homeownership where they transition to more affordable housing through the sale of the mortgaged premises for less than the total amount necessary to satisfy the mortgage.
  • Servicers are delegated to approve a short sale that meets the eligibility requirements.
Eligibility
  • The borrower is experiencing or have experienced one of the eligible hardships.
  • The sale must be an arm's length transaction.
  • The borrower has listed the mortgaged premises for sale with a licensed real estate broker and on the Multiple Listing Service covering the market in which the mortgaged premises
  • The borrower has not acquired a new mortgage in the six months preceding the borrower's delinquency or, if the borrower is current, in the six months preceding the evaluation of the borrower for a short sale.
Documentation requirements Borrower Response Package is required.
Servicer Incentive $2,200
Related Guide Information Guide Chapter 9208
Training and resources Visit the Short Sale web page.
Disaster related requirements Visit the Disaster Relief web page or view Guide Chapter 8404.
Criteria Highlights Deed-in-lieu
Mortgage assistance type Workout option (liquidation)
Hardship type Long-term or permanent: An unresolved hardship where the borrower needs to transition to more affordable housing.
Description
  • A borrower's voluntary conveyance of clear and marketable title to the property to Freddie Mac in exchange for a discharge of debt.
  • Servicers are delegated to approve a deed-in-lieu of foreclosure that meets the eligibility requirements.
Eligibility
  • The borrower is experiencing or has experienced one of the eligible hardships.
  • The borrower must be able to convey clear and marketable title to the mortgaged premises to Freddie Mac.
  • The borrower has not acquired a new mortgage in the six months preceding the borrower's delinquency or, if the borrower is current, in the six months preceding the evaluation of the borrower for a deed-in-lieu of foreclosure. The borrower is only permitted to have obtained a new mortgage if the borrower's eligible hardship was distant employment transfer.
Documentation requirements Borrower Response Package is required.
Servicer Incentive $1,500
Related Guide Information Guide Chapter 9209
Training and resources Visit the Deed-in-lieu web page.
Disaster related requirements Visit the Disaster Relief web page or view Guide Chapter 8404.

For questions, contact our Customer Support Contact Center (800) FREDDIE.

More on Loss Mitigation Options

Forbearance

Extended unemployment is a reality that many borrowers continue to face. As a Freddie Mac Servicer, you have additional solutions to help unemployed borrowers keep their homes. By offering eligible borrowers our new forbearance relief options – a short-term unemployment forbearance period and, if needed, the possibility of an extended unemployment forbearance period – you can effectively assist struggling borrowers through a period of unemployment.

Reinstatement and Repayment

The most desirable resolution to a delinquency is reinstatement. Reinstatement is the act of restoring a delinquent mortgage to current status.

Payment Deferral

Help more homeowners with the relief solutions for those who have experienced a short-term hardship or disaster.

Flex Modification

A flexible workout option for borrowers who experience a permanent hardship and are in need of payment reduction relief.

Short Sale

A Freddie Mac standard short sale (short sale) is the sale of the mortgaged premises for less than the total amount necessary to satisfy the mortgage. Learn more from the Guide and technology tools.

Standard Deed-in-Lieu

A liquidation option to help at-risk borrowers avoid foreclosure.

Military Relief Options for Service Members

Freddie Mac recognizes the commitment and increasing sacrifice our military service members and their families make every day. We encourage Servicers to offer service members Freddie Mac military relief options, including leveraging The Servicemembers Civil Relief Act (SCRA).

Committed to Helping Homeowners Avoid Foreclosure

During this critical time for homeowners and the housing market, we vigorously back our long-standing commitment to help borrowers avoid foreclosure and keep their homes whenever possible.

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