FHLMC Guide Bulletin 2014-8: Enhancements to Representation and Warranty Framework
On May 12, Freddie Mac issued an update titled Enhancements to the Representation and Warranty Framework Announced in Guide Bulletin 2014-8.
Enhancements to the Representation and Warranty Framework Announced in Guide Bulletin 2014-8
Today, we are announcing enhancements to the selling representation and warranty framework with Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-8 [PDF]. These enhancements were developed with Fannie Mae, and at the direction of the Federal Housing Finance Agency.
The framework enhancements include:
- Relaxing the definition of acceptable payment history for determining when a mortgage is eligible for relief from certain selling representations and warranties.
- Granting relief from certain selling representations and warranties after a satisfactory conclusion of a quality control (QC) review of the mortgage.
- Providing Sellers with written notification of mortgages that have met the eligibility requirements for relief.
Framework Versions 1 and 2
- The current framework is referred to as “Version 1” and its requirements will continue to apply to mortgages with Freddie Mac settlement dates on and after January 1, 2013, and before July 1, 2014.
- The framework, as modified by the enhancements, is referred to as “Version 2” and will be effective for mortgages with Freddie Mac settlement dates on and after July 1, 2014.
New Repurchase Alternative
In today’s Bulletin, we are also announcing that if the primary mortgage insurance (MI) on a mortgage is rescinded:
- A repurchase will not automatically be required.
- The mortgage file will be called in for a QC review. Freddie Mac may offer an alternative to repurchase, if the mortgage is determined to be eligible for a repurchase alternative.
- A Seller/Servicer may be allowed to “stand-in” and pay the full MI claim payable under the original policy if the mortgage and the Seller/Servicer meet certain eligibility requirements.
- The MI stand-in option is effective for mortgages with Freddie Mac settlement dates on or after July 1, 2014.
For More Information
- Read Guide Bulletin 2014-8 [PDF] to learn more about the enhancements being made to selling representation and warranty framework.
- Review Guide Section 6.14 for the complete eligibility requirements and the exceptions under the framework.
- Visit our Freddie Mac Representation and Warranty Framework Web page.
- Register for our new webinar, Selling Representation and Warranty Framework, Version 2.
- Visit the Learning Center for updated reference tools in support of the framework.
Please click here to view the update in its entirety.
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