August 28, 2014

Freddie Mac joins SCRA initiative

Aug. 29, 2014 – After the White House announced an initiative to maximize servicemember benefits under the Servicemembers Civil Relief Act, Freddie Mac encouraged mortgage servicers to participate in the initiative to make sure servicemembers are taking advantage of available protections.
The SCRA puts an interest rate cap of six percent on mortgages for eligible, active servicemembers. The Obama administration announced changes that allow mortgage servicers to accept alternative documentation to verify military status, in order to make it easier for servicemembers to benefit from the law. Specifically, mortgage services are now authorized and encouraged to use the Defense Manpower Data Center (DMDC) database to confirm a borrower's military status instead of requiring the service member to provide a copy of their orders.
Freddie also encouraged mortgage servicers to take part by searching the online DMDC on a quarterly basis to find servicemembers in their portfolio not yet taking advantage of the interest rate cap, and to offer interest rate relief to those borrowers.
Freddie said that its mortgage policies changed effective Aug. 26 in accordance with the initiative – changes will be included officially in the September Guide Bulletin.