Freddie Mac announced February 3rd a new Workout Strategy For High Risk Loans pilot program designed to keep more at-risk borrowers in their homes by employing third-party servicers that specialize in servicing Alt-A and other types of higher risk mortgages.
Under the new pilot, a selected portfolio of higher risk mortgages that is at least 60 days delinquent will be given to a specialty servicer for intensive attention using the full range of Freddie Mac workout opportunities, including the Streamlined Modification Program developed with the Federal Housing Finance Agency, Fannie Mae, and the HOPE Now Alliance, according to a Freddie Mac statement.
Initially, the pilot will target an estimated 5,000 reduced documentation loans from California, Nevada, and other states with high delinquency rates. Although Alt-A loans were made to borrowers with strong profiles and represent a fraction of Freddie Mac's single family portfolio, the loans account for half of its seriously delinquent mortgages. Freddie Mac will determine whether to broaden or modify the strategy after reviewing the pilot's June results.
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