FHLMC Guide Bulletin 2014-18 Servicing Update
On October 15, Freddie Mac released an update titled Single-Family Seller/Servicer Guide Bulletin 2014-18.
Home Possible Enhancements and Other Updates Announced in Guide Bulletin 2014-18
We’re enhancing Freddie Mac’s Home Possible® Mortgages to provide you with greater flexibility to help your borrowers with an affordable lending solution. Today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-18 has the details on the enhancements, effective for mortgages with settlement dates on or after November 24, 2014.
The Bulletin also announces other revised selling requirements that help streamline the way you do business with Freddie Mac.
Home Possible Mortgages
We are removing certain restrictions and revising our requirements for Home Possible Mortgages related to:
- Temporary subsidy buydown plans.
- Secondary financing.
- Manually underwritten mortgages.
- No cash-out refinance mortgages.
- The use of gift funds.
- Construction Conversion and Renovation Mortgages.
- Life caps for 5/1 adjustable-rate mortgages (ARMs).
In addition, the benefits of the Home Possible Neighborhood Solution® Mortgages are now available to all Home Possible borrowers. As a result, we are retiring the Home Possible Neighborhood Solution offering.
Loan Prospector® will be updated by November 24, 2014, to support the changes to the Home Possible Mortgage requirements.
Other Mortgage Eligibility and Credit Underwriting Updates
- HPCTs and HPMLs. We are adding “Higher-Priced Covered Transaction” (HPCT) as a Guide glossary term and clarifying that the same eligibility standards for Higher-Priced Mortgage Loans (HPMLs) apply to HPCTs. We are also expanding the eligible ARM products for HPMLs and HPCTs to include ARMs with initial periods of five years.
- Third-party asset verification. We are allowing third-party asset verifications in response to the emergence in third-party asset verification services.
- One-year ARMs. These mortgages are now eligible for sale again under our WAC ARM Cash execution.
Property Eligibility Updates
Also in response to your feedback, we are updating:
- Guide Chapter 42, Special Requirements for Condominiums, to highlight the sequential process flow of our condominium project review and eligibility requirements. We are also updating and providing additional clarity to certain requirements.
- Guide Chapter 44, Property and Appraisal Requirements, to align with market terminology. Exhibit 36, Home Value Explorer® (HVE®) Messaging within the Uniform Collateral Data Portal® (UCDP®), is being retired because information in the exhibit is outdated. Updated information regarding UCDP messages can be found on our UCDP Web page.
We’re updating Chapter 17, Mortgage Delivery Instructions, to reflect the third quarter 2014 Uniform Loan Delivery Dataset (ULDD) specification addendum published on September 23, 2014.
For More Information
Contact your Freddie Mac representative.
Please click here to view Guide Bulletin 2014-18 [pdf].
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