Contingency Plan for Final Delivery Packages
We have been tracking the status of the coronavirus (COVID-19) and its incidence around the world. To help minimize potential impacts to our ability to fund the loans you have closed, we would like to share with you the following steps that Freddie Mac is taking in the event of (i) a widespread disruption in the overnight package delivery system, (ii) a corporate decision by Freddie Mac to stop accepting package deliveries, or (iii) corporate decisions by warehouse lenders, Optigo® lenders and/or closing counsel that would limit their ability to deliver original loan documents to Freddie Mac (each, a Delivery Stoppage).
- In the next 24-48 hours, we will begin incorporating new language into our letters of commitment and early rate-lock agreements that outlines a contingency plan for any temporary changes to our Final Delivery Package requirements (the Contingency Plan). The Contingency Plan also addresses logistical concerns with respect to possession of the hard copy delivery portion of the Final Delivery Package and allows for Optigo lenders and/or closing counsel to execute and deliver bailee acknowledgments in lieu of our standard delivery procedures.
- In the next 24-48 hours, we will be contacting each Optigo lender separately to send you an Omnibus Amendment to Letters of Commitment and Early Rate-Lock Agreements to address all loans that are currently under commitment or locked and which Freddie Mac has not yet funded and you have not yet provided the hard copy delivery portion of the Final Delivery Package to us (the Omnibus Amendment). The Omnibus Amendment will incorporate the Contingency Plan into all of your outstanding letters of commitment and early rate-lock agreements with Freddie Mac.
- We are also modifying the Warehouse Lender Release of Security Interest (Form 996M) and will make it available to your warehouse lenders. It will account for the scenario in which your warehouse lender (or your closing counsel on behalf of the warehouse lender) maintains possession of a note and needs to continue to possess such note on behalf of Freddie Mac until the Delivery Stoppage has been discontinued. As needed, we will work with warehouse lender on alternative bailee forms.
We are hopeful that these processes will help you to continue to meet mandatory delivery dates. In light of the speed with which this public health crisis is developing, we kindly ask that you work with Freddie Mac in good faith and expedite the review of your Omnibus Amendment.
We appreciate your flexibility, support and cooperation at this time.