FHLMC Guide Bulletin 2015-17: Origination Defects and Remedies Framework Announced
October 7, 2015
In Single-Family Seller/Servicer Guide (Guide) Bulletin 2015-17, we’re announcing an origination defects and remedies framework (the “remedies framework”), effective for mortgages with Freddie Mac settlement dates on or after January 1, 2016. The framework provides you with more clarity on how we categorize origination defects, Seller corrections of defects and available remedies. This framework expands the selling representation and warranty framework and will help you manage risk more effectively.
We’re announcing the remedies framework jointly with Fannie Mae at the direction of the Federal Housing Finance Agency.
The following are highlights of the framework included in the Bulletin:
- Categories of defects. After a quality control (QC) review of a loan, origination defects, if any, fall into one of three categories. This determines whether the Seller can correct the defect and what remedy is required.
- Definitions. New terms have been added to the Guide to help you understand the application of the remedies framework.
- Remedying origination defects. We’ve outlined our four-step process that we will follow to categorize origination defects, Seller corrections of the defects and available remedies.
- Please take advantage of our Quality Control Information Manager and Freddie Mac Loan Coverage Advisor® to help you manage the QC review process and track the representation and warranty relief dates for loans you’ve sold us.
For More Information
- Read Guide Bulletin 2015-17 [pdf].
- Review our Selling Representation and Warranty Framework Web page.
- Contact your Freddie Mac representative.
Source: Freddie Mac