Workout Prospector provides automated settlement functionality for Freddie Mac Flex Modifications.
When you save a Flex Modification in the Modification Program – Approve status, the Loan Mod Settlement link displays on the To Do List.
The Loan Mod Settlement link on the To Do List provides access to the Loan Modification Settlement screen. From this screen, you can make any adjustments that are necessary to reflect the final terms of the modification and submit it to Freddie Mac.
For mortgages insured by the FHA, or guaranteed by the VA, or RHS you must submit Form 1128, Loss Mitigation Transmittal Worksheet, for settlement of a mortgage modification, subject to the applicable agency's modification guidelines.
Certain fields on the Loan Modification Settlement screen automatically populate based on the data entered for the modification and the suggested results of the modification solution. You may adjust the required fields (indicated with a red asterisk) as needed, to reflect the final terms of the modification.
The following table provides the data field definitions for the Loan Modification Settlement screen.
Loan Modification Settlement Field Definitions
Definition
The interest rate for the modified mortgage.
Accounting Net Yield
The accounting net yield (ANY) based on the modified mortgage terms. The ANY is the difference between the modified note rate and the servicing spread on the modified mortgage. This field automatically calculates based on the modified Note rate.
Reminder: The servicing spread on the modified mortgage is the lower of 25 bps (.25%) or the servicing spread on the mortgage prior to modification.
Effective Date of Loan Modification Interest Rate Change
The date on which the new interest rate on the modified mortgage will be effective. This date is one month prior to the first modified payment due date.
If you change this date, the First Payment Due Date is recalculated.
First Payment Due Date
The due date of the first modified payment.
This field automatically populates based upon the Effective Date of Loan Modification Interest Rate Change.
Term of Modification (In Months)
The full term of the modified mortgage, reflected in months.
The date on which the modified mortgage matures. This field automatically calculates and will change if you adjust the Effective Date of Loan Modification Interest Rate Change.
Workout Prospector calculates the maturity date as follows:
First Payment Due Date + New Remaining Term = Maturity Date
If the first payment due date is March 1, 2012 and the new term is 480 months, the maturity date is February 1, 2052.
The monthly principal and interest payment on the modified mortgage.
The maximum rate payable under the terms of the Note. This field is applicable only to HAMP modifications and will not display for Standard Modifications or Streamlined Modifications.
Current UPB (pre-modification)
The unpaid principal balance reported to Freddie Mac as of the last accounting cycle cutoff prior to the first modified payment due date.
Interest from DDLPI to Effective Date of Modification Interest Rate Change
The amount of interest calculated at the pre-modification note rate from the DDLPI to the date the interest rate on the modified mortgage is effective.
Workout Prospector matches the DDLPI to the unpaid principal balance reported to Freddie Mac as of the last accounting cycle cutoff prior to the first modified payment due date.
If the Note is an ARM, you must calculate delinquent interest using the interest rate in effect during each month of the delinquent period to account for any ARM adjustments to the interest rate.
Amounts greater than $100,000 require manual settlement review.
Other Amounts Advanced or to be Advanced
The total amount for any of the following expenses that will be capitalized to the mortgage:
Amounts greater than $100,000 require manual settlement review.
Legal Fees and Costs
The total amount for any foreclosure expenses incurred that will be capitalized to the mortgage. This includes attorney fees and title costs incurred as part of the foreclosure process, not to exceed the reimbursable limits in Guide Exhibit 57A, Approved Attorney Fees and Title Expenses.
Amounts greater than $100,000 require manual settlement review.
Property Preservation Expenses
The total amount for any property preservation expenses or property inspection fees, not to exceed the reimbursable limits in Guide Exhibit 57, 1-4 Unit Property Approved Expense Amounts that will be capitalized to the mortgage.
Amounts greater than $100,000 require manual settlement review.
Total Additions Plus Current UPB
This field automatically populates and is calculated as follows:
Current UPB (pre-modification) + Interest from DDLPI to Effective Date of Modification Interest Rate Change + Other Amounts Advanced or to be Advanced + Legal Fees and Costs + Property Preservation Expenses
Amount Held in Suspense/Restricted Escrow
The sum of the following:
Borrower Cash Contribution to Reduce Capitalization
The amount of any cash contribution the borrower elects to make to reduce the amounts that would otherwise be capitalized.
Deferred Non-Interest Bearing UPB
The amount of principal forbearance on the modified mortgage.
If you forbear principal, you must add a balloon payment for the amount of the principal forbearance. The balloon payment will be due on transfer, at payoff, or at maturity. Interest will not accrue on the forborne principal balance.
Interest Bearing Modified UPB
The UPB of the modified mortgage. This field automatically populates and is calculated as follows:
Total Additions Plus Current UPB - Amount Held in Suspense/Restricted Escrow - Borrower Cash Contribution to Reduce Capitalization - Deferred Non-Interest Bearing UPB
This amount does not include any forborne principal. The borrower’s monthly P&I payment is calculated based on the interest bearing UPB.
Before you submit the modification to Freddie Mac, ensure that you have documented any additional details that you want to communicate to us. To do this, click Comments on the To Do List to access the Comments screen. For additional information on how to document comments for modifications, see Comments for Modifications.
Perform the following steps when submitting settlement data for a loan modification to Freddie Mac:
If you attempt to enter a modification into Workout Prospector and take it from Draft status all the way though to Modification Program- Approve and then submit it for settlement on the same business day , the message shown below displays.
Wait one business day and then submit the modification for settlement.
In some instances there may be discrepancies that you are not able to resolve and require Freddie Mac to manually review. To submit a modification for manual review:
1. Click Manual Settlement Review on the bottom of the Loan Modification Settlement screen. A message displays confirming the submission.
As a reminder, we recommend that you click the Pdf Download button and retain a copy of the settlement data you submitted in your servicing file.
After you have submitted the modification to Freddie Mac for settlement, monitor the status of the modification via the reports available on the Modifications tile under the Manager Series Reports section of the Servicer Performance Profile.
This document is not a replacement or substitute for the requirements in the Freddie Mac Single-Family Seller/Servicer Guide or any other contractual agreements. This information does not constitute an agreement between Freddie Mac and any other party. © 2024 Freddie Mac
