Freddie Mac CONNECT: What’s in store for 2024?
Written by: Heather Papows – Senior Consultant, Loan Servicing & Secondary Market
Freddie Mac’s CONNECT virtual conference last month presented sellers and servicers insight on what their focus points are heading into 2024. The resounding message received throughout the assortment of sessions is that FHLMC is committed to digitalizing their platforms, and enhancing how data is communicated.
As part of their Reimagine Servicing rollout, they are updating technology through the use of automations, providing more effective reporting tools, and simplifying the seller/servicer experience. Their upcoming investor reporting innovations aim to collect more data in the activity report files, including escrow and curtailment details.
For those who manage commitments, their funding and pricing platforms are seeing new template features to simplify rate-shopping, which is helpful for those who may not use (or optimally update) a PPE. Modernization of the cash contract process is also underway, with changes to mandatory pricing first and best efforts to follow.
But the biggest takeaway centered around their efforts to develop a new portal, to be used for streamlining the custodial review process. Currently, FHLMC completes “periodic” reviews of servicer recons- which for some servicers may be annually, whereas others may not remember the last time they were requested. With this platform’s development and upcoming rollout (estimated for Q3 2024), FHLMC will have a smoother, more automated method of tracking, requesting, and reviewing required reconciliation forms. This will allow them to complete more reviews annually and could mean you’re up for review sooner than you think.
So what should you do to ensure you’re ready for all the changes coming your way? Here’s a few steps to get you going:
Be sure you’re monitoring and resolving any aging edits on your LRDR. This is a direct reflection of what FHLMC sees in your reporting, and what they would expect to see cleared up on a reconciliation. Aged edits can be an indicator of unresolved issues- and the promptness of resolving them would be first on FHLMC’s priority selection list when considering who to audit.
Take a deeper look at the monthly reconciliation forms you’re completing, the numbers you are inputting, and the backup you use to support it. Invest the time in reconciliation reviews now, identifying any cleanup items that may come about as a result, before an audit finds them first.
Check in with the team that’s managing these responsibilities. Make sure they’re working off the latest guide updates and what is expected of them. If they’re not- give them the support they need to get in check with formal training guides, job aids, and procedural reviews.
Whether you’re a seasoned FHLMC seller/servicer, or newer to the arena, there’s always room to review and reflect on the current state of your operation. Partnering with Spillane Consulting Associates provides you the assurance and confidence you need to do business with investors like Freddie Mac. For more information, please contact our Director, Bill Dolan, at WDolan@scapartnering.com or by phone at (617) 694-2617.
