FHLMC Guide Bulletin 2013-20 Valuation Data Enhancements
On October 8, Freddie Mac released Systems Changes to Enhance Freddie Mac Valuation Data Announced in Guide Bulletin 2013-20.
Systems Changes to Enhance Freddie Mac Valuation Data Announced in Guide Bulletin 2013-20
In January 2013, the Consumer Financial Protection Bureau (CFPB) issued a final rule on the Equal Credit Opportunity Act (ECOA) amendment under Regulation B. The final rule, which is effective on January 18, 2014, requires creditors to provide applicants with free copies of all appraisals and other written property valuations developed in connection with an application for credit.
As part of our ongoing support to help you prepare for the mortgage industry’s new rules, Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-20 announces enhancements to our tools and systems that provide Freddie Mac proprietary property valuation data. These enhancements will help make our valuation data easier for loan applicants and borrowers to understand.
Please review today’s Bulletin for details on how we are enhancing Home Value Explorer® (HVE®) data, Loan Prospector®, Uniform Collateral Data Portal® (UCDP®), and BPOdirect® as summarized below, and for guidance on what supporting text should be provided when you share our valuation data with borrowers or loan applicants.
In addition, the Bulletin announces important changes to mortgage file requirement for Freddie Mac Relief Refinance MortgagesSM and Servicing changes related to property valuation requirements. We are also extending the effective date for the Seller/Servicer fraud-related training requirement for third-party vendors announced in an earlier Bulletin.
Originate & Underwrite and Sell & Deliver
- Using HVE data for loan originations. We are making changes to the way HVE data is displayed and/or adding supporting text to help explain Freddie Mac’s HVE data distributed through:
- Loan Prospector
- HVE look-up tool
As a reminder, if you receive HVE data directly from Freddie Mac tools, the use of the HVE data is governed by the terms and conditions of Guide Exhibit 32, Terms Relating to Use of Data Generated by Home Value Explorer. We have updated Exhibit 32 to revise our restrictions on how and under what conditions you can disclose HVE data to loan applicants and borrowers.
- Updating requirements for Relief Refinance Mortgages. To provide you more flexibility,we no longer require a defined documentation format for HVE point value estimates for Relief Refinance Mortgages. However, if HVE is used to determine a property’s value for a Relief Refinance Mortgage, you must be able to provide the HVE documentation if requested by Freddie Mac.
- Adding supporting text for BPOdirect valuation data. We are updating the BPOdirect screen that returns an HVE point value estimate (also known as “Auto Value”) and the broker price opinions (BPO) provided through BPOdirect to include supporting text for use when valuation information is shared with borrowers.
- Providing property valuation information to borrowers. Servicers must provide the borrower with property valuation information and any pertinent notices, as required by all applicable laws, when loss mitigation decisions are made. This requirement applies regardless of whether the Servicer, Freddie Mac or both are making the decision on the workout or relief option. This requirement is effective when you begin providing Freddie Mac valuation information to borrowers to meet CFPB’s final rule on the ECOA amendment.
- Revising our property valuation requirements for modifications. Servicers must meet the updated requirements for obtaining property valuations for loan modifications, including those processed under the Home Affordable Modification Program. These revised requirements include, but are not limited to the requirements to obtain the information either through an HVE authorized distributor or BPOdirect, and to use the Auto Value for a property if one is available in BPOdirect. We are also discontinuing the Automated Valuation Model special report currently available on FreddieMac.com. These changes are effective when you begin providing Freddie Mac valuation information to borrowers to meet CFPB’s final rule on the ECOA amendment.
For More Information
- Review Guide Bulletin 2013-20 [PDF].
- Visit our webpage, Using Freddie Mac Valuation Data.
- Call your Freddie Mac representative.
- Look for additional operational and system details which will be provided through future Single-Family Update emails.
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