Freddie Mac Bulletin 2026-5: Key Servicing Updates and Changes

Padgett Law Group offers a brief summary of the servicing updates detailed in Freddie Mac's Bulletin 2026-5, which was published on April 8, 2026. Relevant excerpts are included below copied and pasted directly from the Bulletin:

Freddie Mac Flex Modification:

Adjusted the requirement for Servicers to provide a date by when the Borrower must sign and return an executed modification agreement.

Currently, Freddie is prescriptive in instructing the Servicer to provide 14 days from the date the Servicer sent the modification agreement for the Borrower to return the final signed modification documents.

The Changes:

• Time Frame for Signed Flex Modification:

  • Changing this requirement to instead permit the Servicer to provide an acceptable time frame by which the documents must be returned.

  • Additionally, while the Servicer is required to provide a date by which the modification agreement must be signed and returned, provided the Servicer receives the executed agreement by the Modification Effective Date, the modification will be completed even if the documents are returned after the date previously communicated by the Servicer.

• Application of Amounts Held in Suspense:

  • To clarify that at the end of a Trial Period Plan, if suspense funds held per the requirements in Guide Section 9206.2(b)(ii) are in excess of the total amount of arrearages and expenses and remain unapplied, those funds must be applied to reduce the post-capitalized UPB.

• Streamlined Eligibility:

  • For a Freddie Mac Flex Modification, the Borrower must be 90 days delinquent as of the evaluation date, and payments received after the evaluation date do not affect Borrower eligibility even if the payment results in the Borrower becoming less than 90 days delinquent. This update aligns with the recently announced changes to Freddie Mac Flex Modification eligibility requirements for Borrowers impacted by an Eligible Disaster.

Bankruptcy and Foreclosure Legal Fees:

To support the amendment to the Bankruptcy Chapter 13 Federal Rules 3002.1, which became effective in December 2025, we have created new expense codes and updated the allowable fees associated with certain existing expense codes.

The new expense codes are as follows:

• • 011068 (Chapter 13 - Mid-Case Review Audit Agreed Response up to $250)

  • 011069 (Chapter 13 - Mid-Case Review Audit Disagreed Response up to $675)

  • 011070 (Chapter 13 - Trustee’s Notice of Disbursements Made Agreed Response up to $250)

  • 011071 (Chapter 13 - Trustee’s Notice of Disbursements Made Disagreed Response up to $675)

Existing expense codes have been updated as follows:

• • 011047 – Increased the reimbursement amount of the “Response to Final Cure for Agreed Response” up to $260.00

  • 011048 – Increased the reimbursement amount of the “Response to final cure in dispute” up to $750

Foreclosure on Cooperative Share Loans:

Freddie Mac removed the requirement for Servicers to obtain Freddie Mac’s prior written approval before incurring legal expenses in connection with the foreclosure of a Cooperative Share Loan. Servicers can receive reimbursement up to $1,600 by using expense code 014005 – Foreclosure on a Cooperative Share. Please refer to Guide Chapter 8801 for additional special Servicing requirements for Cooperative Share Loans.

Private Selling Officers:

Freddie Mac created a new expense code for “Private Selling Officers” when a foreclosure sale is conducted by an auction service in lieu of the Sheriff Sale. Servicers can be reimbursed up to $300 by using expense code 032002 – Private Selling Officers.

Note: This fee is only applicable when authorized by State law, and the Private Selling Officer must be appointed through the court.

Lender-Paid Mortgage Insurance:

In an effort to simplify our approach with Seller/Servicers entering into Voluntary Partial Cancellation (VPC) of Servicing Contract Rights Agreements with Freddie Mac, lender-paid mortgage insurance payments pertaining to VPC Mortgage Loans have been removed from the closing payment structure. This adjustment is intended to facilitate smoother transactions and enhance the overall client experience.

eNote Certifications:

The Bank of New York, NA, a Designated Custodian, has successfully completed its testing to participate in Freddie Mac’s eMortgage program. Lenders wishing to engage with this Designated Custodian for eNote certifications will now need to sign new Guide Form 1035DCA, Addendum to Designated Custodial Agreement: Single-Family Mortgages (Freddie Mac Form 1035DC) for Electronic Documents Related to Single-Family eMortgages, as an addendum to Form 1035DC, Designated Custodial Agreement: Single-Family Mortgages.