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Seller-Owned Modified Mortgages
Quickly and easily meet your borrowers’ needs without another closing

Related Products

Seller-owned Modified Mortgages give you the flexibility you need to build long-term borrower loyalty, with requirements to help you easily sell mortgages you have held in your portfolio and modified before delivery to Freddie Mac.

Modifying loans in your portfolio, where the new mortgage is a fixed-rate mortgage, ARM or balloon/reset mortgage, expands your ability to meet your existing refinance borrowers' needs without another closing – reducing loan runoff from your servicing portfolio. Less documentation, underwriting and title requirements, and easier verifications, offer you the process efficiencies you need during times of high volume.  

Use Seller-owned Modified Mortgages to augment customer relationships you’ve already built, while providing an exceptional enhancement to your borrower-retention product line and a Freddie Mac secondary market sale for the modified mortgage.

Product Features

Feature Requirements
Property Type
  • 1- to 4-unit primary residences
  • Second homes
Eligible Mortgage Products
  • Must be fixed-rate, ARM or balloon/reset mortgages that have been modified prior to the delivery date.
  • The term may not extend beyond 30 years from the note date or the effective date of permanent financing for a mortgage originated as a Mortgage for a Newly Constructed Home.
  • Seasoned mortgages determined using the modification date and not the original note date.
Maximum LTV Ratios
  • LTV/TLTV/HTLV ratios did not exceed Single-Family Seller/Servicer Guide (Guide) limits on the note date; current LTV/TLTV/HTLV ratios do not exceed Guide limits as of the delivery date.
Eligibility/Underwriting
  • Non-Loan Prospector® mortgages with a minimum Indicator Score of 680.
  • Not eligible for Loan Prospector representation and warranty relief.
  • The minimum Indicator Score cannot be more than 120 days old at the time of delivery.
  • The borrowers are the same as the borrowers on the original mortgage except that a borrower who contributed no qualifying income, assets or reserves to the mortgage may have been removed.
Execution Options
  • Servicing-retained Cash (mandatory only)
  • WAC ARM Cash
  • Fixed-rate Guarantor
  • WAC ARM Guarantor
  • MultiLender Swap
Delivery Fees
  • Postsettlement delivery fees may apply based on the individual characteristics of the mortgage, and include CS/LTV delivery fees for Non-Loan Prospector mortgages. See Guide Exhibit 19 [PDF 380K ] for details on applicable fees.
Special Delivery Requirements
  • You must deliver all mortgage data required by Form 11 or Form 13SF, as applicable, including Date of Note, Original Loan Amount, the Modification/Conversion Date, Credit Score Value (CSV) and Credit Score Type.
Single-Family Seller/Servicer Guide
  • Refer to Guide Chapter 32

 

Download a Seller-owned Modified Mortgage fact sheet [PDF 189K] for more details.

Lender Benefits

With Seller-owned Modified Mortgages, you will be able to:

  • Expand your product line with a borrower-retention alternative to refinances.
  • Reduce loan runoff from your servicing portfolio with a competitive option for your current borrowers.
  • Leverage the secondary market through Freddie Mac to effectively manage your portfolio with an outlet for your modified loans.
  • Take advantage of flexibility for your Seller-owned Modified Mortgage and seasoned mortgage sales with seasoning based on the modification date, not the original note date.
  • Enhance your relationship with your existing borrowers and benefit from cross-sell opportunities.

Benefits for Your Borrowers

For your borrowers, Seller-Owned Modified Mortgages provide:

  • Cost savings with a mortgage modification that doesn't require a new closing.
  • Time savings and convenience with fewer documentation and verification requirements.

For More Information

Training Opportunities

Resource Link
Seller-Owned Converted Mortgages Description and Fact Sheets
Seller-Owned Modified Mortgages Description and Fact Sheets
Seller-Owned Modified and Converted Mortgage Quick Reference [PDF 134K]

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.


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