New Freddie Mac Representation and Warranty Framework
For loans with Freddie Mac settlement dates on or after January 1, 2013, a new representation and warranty framework will be in effect. This new framework will provide more certainty and transparency for Freddie Mac Sellers by helping to address Seller concerns around loan repurchase risk.
Under this new framework, once a mortgage has established an acceptable payment history, and meets certain eligibility criteria, Freddie Mac will not exercise its remedies, including the issuance of a repurchase request, in connection with a Seller/Servicer’s breach of certain selling representations and warranties. It is important to note that we are not changing the representation and warranty requirements currently in effect.
A key component of the new framework is borrower payment history. To be eligible for the new selling representation and warranty framework, a mortgage must meet the following requirements, in addition to certain eligibility criteria outlined in the Bulletin:
- For mortgages other than Freddie Mac Relief Refinance MortgagesSM, the borrower has no 30-day or greater delinquencies in the first 36 months following the Freddie Mac settlement date.
- For Relief Refinance Mortgages, the borrower has no 30-day or greater delinquencies in the first 12 months following the Freddie Mac settlement date.
- Or, for any mortgage, the borrower had no more than two 30-day delinquencies and no 60-day or greater delinquencies in the first 36 months, following the Freddie Mac settlement date, and the payment is current on the 60th month.
In addition, it is important that you are aware of the exclusions as outlined in Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-18, where you will remain accountable for certain representations and warranties for the life of the loan.
Take advantage of the resources we have developed to help you prepare for the January 1, 2013, effective date.
- Guide Bulletin 2012-22 on changes to Freddie Mac’s Quality Control Processes and Requirements.
- October 19, 2012, Industry Letter on Freddie Mac's Quality Control Enforcement Practices.
- Guide Bulletin 2012-18 on Freddie Mac’s new representation and warranty framework.
- September 11, 2012, Industry Letter on Freddie Mac’s Quality Control Process.
- New Representation and Warranty Framework FAQs
- Overview of the New Framework: Selling Representation and Warranties
- Overview of Repurchase and Appeal Process
Training & Education
Take advantage of our Learning Center’s training opportunities and educational resources on the new Representation and Warranty Framework.
- Register today for our updated Quality Control webinar.
This new framework is the result of collaborative work with Freddie Mac and Fannie Mae at the direction of the Federal Housing Finance Agency (FHFA).