Freddie to Implement Web Based Reimbursement System for Servicers

By: Jann Swanson •

Servicers will soon be required to submit requests for reimbursements from Freddie Mac through a new web based program announced on Thursday.  The new system will replace the existing Online Reimbursement System and, according to Freddie Mac, was designed to "create operational efficiencies for both Servicers and Freddie Mac.  Servicers will be transitioned onto the new system over the next two quarters.

Freddie Mac said that the system was developed in response to feedback from servicers and will allow them to "more quickly and effectively obtain reimbursement for expenses related to default management."

The company said it hopes that the new system will offer its users a number of benefits including:

  • Real time decisions on submitted claims
  • The elimination of paper claims
  • Improved access to the status of a submitted claim
  • The ability to attach any required expense documentation electronically to the claim

All claim status information will reside in the new system and will eliminate the current need for Servicers to access the Expense Manager tool in order to determine the status of previously submitted claims.

The overall goal: raise servicer incentives to modify loans?

Freddie Mac will be contacting current users of the on-line system to schedule their transition to the new system and once servicers have switched over, which is expected to happen by the fourth quarter of 2010, the old system will be discontinued and the web based system will become mandatory.  Servicers who have not been using the on-line system must submit the Reimbursement System Sign-up Form which is expected to be available soon at http://www.freddiemac.com/singlefamily/service/tools.html.

Once a Servicer in enrolled in the new system it must:

  • Handle its own system administration.
  • Use the new system for all expense reimbursement requests.
  • Use the system to electronically submit the following claims that have previously been submitted on paper:

      -  requests for reimbursement of expenses for FHA, VA, and RHS guaranteed mortgages;

      -  resubmissions of expenses adjusted or denied in a previous claim;

      -  claims for mortgages secured by properties sold to a third party for less than the total debt.

  • Use the Reimbursement System to request pre-approval to exceed Freddie Mac expense limits;
  • Attach any required expense documentation directly to the claim rather than faxing or e-mailing the documentation to Freddie Mac;

The system has several key features including what is described as "Easy-to-navigate applications", file upload capabilities, customized user maintenance, tools that can assist in tracking default management expenses, and customized work queues that are designed to included specific criteria that can be filtered and viewed.

The new servicing system can be accessed through the Freddie Mac Service Tools page at the link given above.