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Loan Prospector June 13 Release

Revised May 20, 2010

On June 13, 2010, we are making the following changes to Loan Prospector® to align with the credit and mortgage eligibility requirements announced in our Single-Family Seller/Servicer Guide (Guide) Bulletin 2010-7 issued on March 11:

With our June 13 release, we are also updating the existing credit reporting company (CRC) technical affiliate drop-down list to add two new technical affiliates, modify existing technical affiliate contact information, and remove companies no longer in business.

Removal of Initial Interest Mortgage Offering Identifiers from Loan Prospector

In our Guide Bulletin 2010-7, issued on March 11, Freddie Mac announced we are discontinuing the purchase of mortgages with an interest-only option and retiring our Initial InterestSM Mortgage offering for mortgages with application dates on or after June 13, 2010, and for mortgages with Freddie Mac settlements on or after September 1, 2010.

Beginning June 13, Initial Interest Mortgages will be ineligible for submission or resubmission to Loan Prospector. To align with this change, on June 13 we are updating Loan Prospector to remove:

  • The Initial Interest Offering Identifiers from the browser access method.
  • The Initial Interest Offering Identifiers (230, 231, 232, 233) from your loan origination system (LOS). Please check with your LOS vendor to find out when your Loan Prospector interface will be updated.

Please note, you must complete all Initial Interest Mortgage transactions in Loan Prospector before June 13. You will not be able to manually underwrite Initial Interest Mortgages after June 13. These loans must have a Freddie Mac settlement date on or before September 1, 2010.

On or after June 13, if you submit a new loan using the Initial Interest Offering Identifiers through your LOS or if you resubmit through the Loan Prospector browser access method or your LOS, you will receive the following processing status ineligible feedback message notifying you that the mortgage is not eligible for sale to Freddie Mac:

Message Code Feedback Message Purpose
ELV 20 Product ineligible for Initial Interest offering. Indicates Initial Interest Mortgages are ineligible for purchase.

Update to Reflect Mortgages for Newly Constructed Homes Documentation Requirement Changes

On June 13, we are updating Loan Prospector to reflect changes for maximum age of credit and capacity documentation requirements for Mortgages for Newly Constructed Homes must not be dated more than 120 days from the effective date of permanent financing as outlined in Guide Bulletin 2010-7, issued on March 11.

With the Loan Prospector June 13 release:

  • New Loan Prospector submissions of Mortgages for Newly Constructed Homes on or after June 13, 2010, and Loan Prospector resubmissions on or after January 1, 2011, will reflect the new 120-day age of documentation requirement.
  • Resubmissions of Mortgages for Newly Constructed Homes that were submitted for the first time prior to June 13, 2010, and comply with our previous requirements will be eligible for sale to Freddie Mac until December 31, 2010.

Important Information About New Documentation Requirements for Mortgages for Newly Constructed Homes

To help you prepare for this change, please review the following guidance on Mortgages for Newly Constructed Homes submissions and resubmissions in Loan Prospector:

  • Submissions of Mortgages for Newly Constructed Homes Prior to June 13:
    • Submissions will reflect the 18-month (540 day) documentation requirement.
    • If the documentation requirement expiration term is 18 months, we recommend you submit your loan prior to June 13, but you must deliver the loan by December 31, 2010.
  • Resubmissions of Mortgages for Newly Constructed Homes On or After June 13 for Loans Originally Submitted Prior to June 13
    • Resubmissions will reflect the original documentation expiration term of 18 months (540 days) or December 31, 2010, whichever comes first.
  • Initial Submissions of Mortgages for Newly Constructed Homes On or After June 13
    • New submissions will reflect the new 120-day age of documentation requirement.

Please note: For loan transactions in Loan Prospector using merged credit or a Merged Credit Reference Number (MCRN), the Loan Prospector assessment expiration date will be determined using the date of the initial merged credit report, which may be earlier than the first submission date in Loan Prospector.

Super Conforming Mortgages to Be Assessed as Mortgages for Newly Constructed Homes

On June 13, Loan Prospector will be updated to assess super conforming mortgages as Mortgages for Newly Constructed Homes. These mortgages must meet the requirements of the Guide, including the revised age of documentation requirements.

Updating the Technical Affiliate List

Also as part of this Loan Prospector June 13 release, we are updating the existing CRC technical affiliate drop-down list to add new technical affiliates, modify an existing technical affiliate company name, and remove companies no longer in business.

We are adding the following new technical affiliates that will offer merged credit reports through Loan Prospector:

  • Credit Information Systems
  • Trak-1 Technology

Additionally, the company name for Cogent Road Inc. will be updated to Funding Suite. We are also removing the following companies that are no longer in business:

  • Credit Bureau of San Luis Obispo & Santa Barbara Counties
  • LandAmerica via ISS
  • LandAmerica via Percentage
  • Merchants Information Solutions

The technical affiliate field provides you with a more effective way to request new merged credit, or use a previously obtained MCRN from a sponsored technical affiliate. Currently the only credit reporting company supporting this enhancement is Equifax Mortgage Solutions (EMS).

Lenders should contact your LOS vendor to determine when the technical affiliate list will be updated in your system.

For More Information Review:

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