Mortgage Servicing and Loan Modifications: 7.5.5.5 Charge-Offs
Freddie Mac will consider a charge-off of a mortgage loan that has an unpaid principal balance of $5000 or less and is 120 days or more delinquent.310 The property must be owner-occupied and maintenance of the property must be up to neighborhood standards and in compliance with municipal requirements.311 Generally, a charge-off ends collection efforts on the mortgage but does not necessarily cancel the note or release the lien on the property.