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 © Freddie Mac

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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 © Freddie Mac

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MF Multisuite Yield Maintenance Calculator

© Freddie Mac

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Yield Maintenance Calculator - Rider

 Change » Rider selection – No change to calculation  Yield Maintenance Type » “9/96” Only Option © Freddie Mac

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Yield Maintenance Calculator – Remaining Term

 Example » Remaining YM Period - Full Months © Freddie Mac

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

Extended Prepayment Option

© Freddie Mac

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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 © Freddie Mac

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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 © Freddie Mac

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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 © Freddie Mac

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New Loan Payoff Notice

© Freddie Mac

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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

© Freddie Mac

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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 © Freddie Mac

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Payoff Team Name Carl McLaughlin Sherry Stanard Designation Loan Servicing Director Email [email protected]

MF Loan Accounting Manager [email protected] Felicia Hicks Marcus Valentine Team Lead Team Lead [email protected]

[email protected]

Contact Number 704-714-3803 703-714-2863 703-714-2897 703-714-3045 Winston BurrowsSenior [email protected]

703- 714-2913 Payoff Mailbox:

[email protected]

© Freddie Mac

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Thank you.

Any Questions?

© Freddie Mac

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