SBL Guide Addendum Being Integrated Into the Seller/Servicer Guide
June 20, 2016
What you need to originate and service a Small Balance Loan (SBL) will now be more transparent and readily available.
On Thursday, June 30, we will retire the SBL Guide Addendum and fully integrate its contents into the searchable Freddie Mac Multifamily Seller/Servicer Guide (the Guide) published on AllRegs®. On that date, the SBL Guide Addendum will no longer be in effect.
We have simplified and clarified many SBL requirements, making it even easier to do business with Freddie Mac.
- We are adding 10 new chapters (SBL Guide Chapters) to the Guide to house SBL-specific requirements. The requirements in the SBL Guide Chapters are exclusively for SBLs and can differ significantly from those for non-SBLs. The SBL Guide Chapter titles include an “SBL” suffix as part of their chapter number. The entire text of the new SBL Guide Chapters will appear in black on AllRegs, so we recommend that SBL Seller/Servicers review them in their entirety.
- We are modifying existing Guide chapters, directory, and glossary to incorporate SBL-specific requirements that do not require corresponding separate SBL Guide Chapters. Guide text for changes in non-SBL Guide Chapters will be highlighted in green on AllRegs.
The following chart includes all of the revised Guide chapters that will be relevant to originating and servicing SBLs, including a “Highlights” column with notes of particular interest.
|2||General Freddie Mac Policies||
SBL Sellers can deliver the following Borrower underwriting forms with E-Signatures from Borrowers:
Freddie Mac will accept Electronic Signatures on all third party reports
|3||Seller/Servicer Eligibility Requirements|
|4||Suspension or Termination of a Seller/Servicer|
|5||General Warranties by the Seller/Servicer|
|6SBL||SBL - Legal Services for SBL Mortgage Origination and Servicing|
|7||Fraud Prevention, Detection and Reporting: Reporting Suspicious Activity|
|8SBL||SBL Property Fundamentals||
Simplified the analysis and requirements for Independent Properties, including indirect access and shared facilities
Added scattered site requirements
Confirmed that in Top Markets, as few as two units may be inspected in certain circumstances
Reorganized chapter for ease of use
|9SBL||SBL Borrower/Borrower Principal Fundamentals|
|10||Fundamentals of Mortgages, Mortgage Origination and Credit UW|
|12||Appraiser and Appraisal Requirements|
|14||Property Condition Report Requirements|
|14SBL||SBL Physical Risk Report Requirements||Number of days required for completion of Priority Repairs other than PR-90 Repairs is being extended from 180 to 365 days|
|15||Third-Party Reports and Property Inspections for Forward Commitments|
|16SBL||SBL Seismic Risk Assessment Requirements|
|18SBL||SBL Originating a SBL Mortgage||
Consolidated SBL Mortgage requirements into an easy to use chart
Updated descriptions of the standard and Early Rate Lock delivery options
|27||Commitment or Early Rate-Lock Application|
|29SBL||SBL Title, Description, Survey and UCC Search|
|30||Ground Lease Mortgages|
|32SBL||SBL Final Delivery Requirements||Final Delivery of an SBL Mortgage will be a single delivery package instead of "Core" and "Non-Core" packages|
|33||Warehousing, Secured Advances and Other Secured Lending Arrangements|
|34||Retention of Mortgage File|
|36||General Servicing Policies|
|39||Administration of Reserves; Monitoring Repairs||Servicers are permitted to extend Completion Dates for existing loans as long as the Priority Repair does not pose life, health or safety issues|
|40||Assessments and Other Post-purchase Reporting|
|41SBL||SBL Transfers of Ownership|
|42||Transfers of Servicing|
|43||Specific Servicing Responsibilities|
|44||Delinquency, Default and Loss Mitigation Strategies|
|45||Real Estate Owned|
|46SBL||SBL Repurchase; Loss Share, B-Piece; Collateral|
|48||Termination of Servicing|
|50||General Accounting and Reporting Requirements|
|53||Determining and Remitting Payments|
|54||Accounting and Reporting|
|55||Documentation and Deliveries|
In conjunction with the June 30 Guide update, we are also making the following SBL-specific form, exhibit, and checklist revisions:
- The Underwriting Checklist used for SBLs and the following five SBL-specific forms will be published on AllRegs:
Item Title Exhibit 1, Section 1.2 Small Balance Loan Checklist Form 920 SBL Collateral Certification Form 921 Letter of Credit – SBL Certification Form 1104 SBL Physical Risk Report Form 1115SBL Borrower and Borrower Principal Certificate – SBL Form 1117SBL Borrower Certification of Physical and Environmental Property Condition – SBL
- SBL Exhibit 13: SBL Prepayment Provisions is being retired; Sellers should refer to the form SBL Notes available on FreddieMac.com for applicable prepayment provisions.
- The Small Balance Loan Checklist is being revised to add the requirement for disclosure and a legal analysis if the SBL Seller/Servicer, or any of its directors, officers, or affiliates has an ownership interest in the borrower or the property.
If you have questions about these changes, we encourage you to contact your Freddie Mac representative.