Workout Incentive Program
Newly Increased Compensation for Pursuing Workout Options to Help Keep Borrowers in Homes
Servicers and Freddie Mac both have an interest in helping borrowers who are delinquent in their mortgage payments avoid foreclosure and remain homeowners. Workouts offer alternatives to foreclosure that, in most cases, keep borrowers in their homes. We know that the resources you devote to pursuing workouts impact your bottom line. That’s why we created the Workout Incentive Program to help you offset your costs and to encourage you to pursue workouts more aggressively, which we believe can help more borrowers avoid foreclosure. In response to today's critical market challenges, we've increased our workout incentives to demonstrate our focus on increasing workouts and foreclosure avoidance.
Key Features
- Mortgages on 1- to 4-unit homes, including those covered by mortgage insurance, are eligible
- Receive a check for eligible workouts each month
Servicer Benefits
Our Workout Incentive Program rewards you, regardless of your tier rating, for the hard work you do to find the right solution for your borrower. The program is designed to
- Help you offset your costs for eligible alternatives to foreclosure
- Complement our array of cutting-edge default management tools
- Encourage you to reach out to borrowers and aggressively pursue alternatives to foreclosure
Borrower Benefits
Freddie Mac is committed to helping borrowers sustain homeownership or avoid foreclosure. We deliver on that commitment by developing management tools that enable you to work effectively with defaulted borrowers, and by giving you monetary incentives for completed eligible alternatives to foreclosure.
We've enhanced our web pages at FreddieMac.com/avoiding_foreclosure to give you a powerful new tool to help your borrowers better understand that they should contact you as soon as possible when financial hardship strikes. The pages explain, in English and Spanish, different types of workout options that may be available to them, and give them resources to locate a qualified credit-counseling agency in their area. Above all, the clear message to borrowers is to seek competent help promptly and avoid foreclosure.
Eligible Mortgages
Mortgages on 1- to 4-unit homes, including those covered by mortgage insurance, are eligible for the program. Second mortgages, home improvement loans, mortgages guaranteed by the FHA, VA, or RHS, and mortgages sold to us with recourse are not eligible. If a mortgage insurer's contribution to a short payoff fully pays off the borrower’s debt to us (also known as a make-whole pre-foreclosure sale), you will receive the incentive amount for a short payoff.
How You Are Paid
We will track all workouts you settle on a monthly basis and send you a check and the loan detail for all of the eligible workouts and repayment plans you settled during the period for which you are being compensated. Please note that compensation for qualified repayment plans will be paid one month in arrears due to cycle cutoff requirements, and that we consider a workout "settled" when we receive and process your necessary documentation and transmissions.
Incentive Amounts
- If your settled workouts are performed by Freddie Mac, you will receive $100 for every settled loan modification and $200 for every settled short payoff.
- If you perform your own workouts, we will pay you incentives for eligible workouts according to the following chart:
| Workout Type |
Incentive Amount |
| Loan Modification |
$800 |
Short Payoff and
Make-Whole Pre-foreclosure Sales |
$2,200 |
| Deed in lieu of foreclosure |
$275 |
| Repayment Plans |
$500 for a successful repayment plan, if the following conditions are met:
- The mortgage must be 60 or more days delinquent at the time the borrower entered into the repayment plan.
- The borrower must completely reinstate or payoff the mortgage.
- You must correctly report the repayment plan to us via electronic default reporting (EDR).
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