Industry News

Loan servicers rewarded with double pay

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Freddie Mac offers carrots for short sales, loan workouts Freddie Mac is doubling the amounts paid to loan servicers who are able to engage in workouts with borrowers that help them avoid foreclosures. Some critics have said that because of the way they are compensated, loan servicers often won't put in the time and expense required to craft repayment plans, loan modifications or engage in short sales. Freddie Mac announced today it will double compensation for servicers who close short sales or pre-foreclosure sales to $2,200. Compensation for loan modifications is being increased from $400 to $800, and servicers who draw up approved repayment plans will be paid $500 instead of $250. Freddie Mac will also give servicers up to 300 days to work with delinquent borrowers in Washington, D.C., and 20 states that have "relatively fast" foreclosure process. The affected states include Alabama, Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Maryland, Michig...