MCLEAN, VA--(Marketwired - Nov 20, 2014) - Today Freddie Mac (
Freddie Mac Executive Quote
Attribute to Dave Lowman, Executive Vice President, Single Family Business, Freddie Mac:
"Today's announcement goes a long way in providing clarity and certainty to lenders as to when a loan will be subject to a repurchase. Lenders have been specifically concerned that the life of loan exclusions could undermine the selling representation and warranty relief, leaving a back door for the GSE to put loans back to them after granting relief. Addressing these concerns by providing tighter definitions and clarity should encourage Sellers to serve a broader range of qualified borrowers."
Background Facts:
- Version 1 of the representation and warranties framework was effective for mortgages sold to Freddie Mac on or after January 1, 2013. Version 2 of the framework, which relaxed acceptable payment history requirements for relief and provided relief from certain representations and warranties after acceptable quality control review, is effective for mortgages sold on or after July 1, 2014.
- With today's announcement Freddie Mac is enhancing the selling representation and warranty life-of-loan exclusions introduced in Version 1 of the Framework by providing a more definitive measure for when the exclusions related to misstatements, misrepresentations, omissions and data inaccuracies may be invoked, including implementation of a significance test.
- These updates are retroactively effective for mortgages that have Freddie Mac settlement dates on or after January 1, 2013.
- Additionally Freddie Mac is updating the compliance with law definition in the Selling Guide to provide more certainty on how Freddie Mac will enforce remedies for compliance with laws. This change is effective for mortgages with settlement dates on or after November 20, 2014.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.