Payoff Process Enhancements
May 2014
Overview of changes
 Yield Maintenance (YM) calculation
standardized
 Allows more flexibility for Yield Maintenance
payoffs with unscheduled date changes
 Improve timelines of payoff exceptions
 Extended Prepayment Option
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Payoff Calculation Standardization
 Freddie Mac has 2 different Yield Maintenance Riders (7/93 or
9/96)
 Effective June 2, 2014,Yield Maintenance calculation will be
standardized with industry standards
 Utilizing the 9/96 Rider or Standard
Calculation starts with the first of
the month following the date of the
Note until the end of the Yield
Maintenance period (full months not partial)
 No change to the calculation – Only
9/96 option available
 The 7/93 option should no longer be utilized effective June 2,
2014
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MF Multisuite Yield Maintenance Calculator
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Yield Maintenance Calculator - Rider
 Change
» Rider selection
– No change to
calculation
 Yield Maintenance
Type
» “9/96” Only Option
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Yield Maintenance Calculator – Remaining Term
 Example
» Remaining YM
Period - Full
Months
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 Extended Prepayment Option
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Payoff Date Changes - Flexibility
 Extended Prepayment Option
» Borrower submits Request to Payoff mortgage to Servicer
» Servicer presents extended prepayment option to Borrower
and provides the Borrower Authorization form
» Borrower initials and
signs the Borrower
Authorization form and
returns to Servicer
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Borrower Authorization Form
 Form must be initialed and signed by the Borrower; then
returned to the Servicer
 Servicer must maintain the original executed form
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Extended Option payoff request
 Servicer completes the new “Loan Payoff Notice”
 New Section “Extended Payoff” added to the Loan Payoff
Notice
» This section is completed if the Extended Prepayment Option
has been accepted by the borrower prior to submitting the
request to Freddie Mac
 Servicer completes the
Extended Payoff section
» Extended payoff quote
expiration must be populated
 Servicer uploads the completed
“Loan Payoff Notice” to DMS
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New Loan Payoff Notice
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Payoff Expiration Date Scenario’s
 Scenario 1
» Loan scheduled to payoff March 3, 2014
» Extended payoff Quote Expiration - March 10, 2014
 Scenario 2
» Loan scheduled to payoff March 24, 2014
» Extended payoff Quote Expiration - March 31, 2014
 Scenario 3 *
» Loan scheduled to payoff March 26, 2014
» Extended payoff Quote Expiration - March 31, 2014
*If scheduled payoff is < less than 5 Business days before the last business day of the
month, the quote expiration date must be the last business day of the month
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Summary
 Effective June 2, 2014
» Use standardized calculation for all payoffs (9/96 method)
» Utilize the new “Loan Payoff Notice” form
» Offer the extended payoff option to borrowers
» Maintain original borrower authorization
 Questions?
» Contact your payoff representative
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Payoff Team
Name
Designation
Loan Servicing
Carl McLaughlin Director
Email
Contact Number
Carl_mclaughlin@freddiemac.com
704-714-3803
Sherry Stanard
MF Loan Accounting
Manager
sherry_stanard@freddiemac.com
703-714-2863
Felicia Hicks
Team Lead
felicia_hicks@freddiemac.com
703-714-2897
Marcus
Valentine
Team Lead
marcus_valentine@freddiemac.com 703-714-3045
Winston BurrowsSenior
winston_burrows@freddiemac.com 703- 714-2913
Payoff Mailbox: Mfopsloanacctpayoffs@freddiemac.com
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Thank you.
Any Questions?
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