This story appeared in Bank Digest.
The Office of Inspector General for the Federal Housing Finance Agency has released a report indicating that Freddie Mac could further reduce reimbursement errors by reviewing more servicer claims. When Freddie Mac purchases a mortgage loan, it contracts with mortgage servicers, such as large banks or mortgage companies, to handle routine loan activities, such as collecting and fowarding mortgage payments. When borrowers become delinquent, a servicer may be required to maintain the property, pay taxes and insurance, and liquidate the loan. After the loan is liquidated, the servicer seeks reimbursement of its expenses from Freddie Mac.