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Loan Prospector September 23 Release

September 12, 2012

On September 23, 2012, to help you continue to assess Freddie Mac mortgage offerings in Loan Prospector®, we are updating the system to reflect requirement changes previously announced in several Single-Family Seller/Servicer Guide (Guide) Bulletins. These Loan Prospector updates include:

  • Changing the names of the Home Possible® Mortgage product offerings and adding revised feedback messages to reflect the changes announced in Guide Bulletin 2011-4.
  • Removing the Alt 97® Offering Identifier 210 to align with changes in Guide Bulletin 2012-8.
  • Removing the new construction value of “Newly Built” option from the system for conventional loans, as announced in Guide Bulletin 2012-4.

Also as part of this Loan Prospector September 23 release, we are:

  • Removing LandSafe as a credit reporting company (CRC) option.
  • Revising feedback messages to provide additional guidance on assessing Federal Housing Administration (FHA) loans and the use of Loan Prospector feedback certificates.

Updates to the Names of Home Possible Mortgage Offerings

As announced in Guide Bulletin 2011-4, issued March 1, 2011, we reduced the maximum loan-to-value (LTV), total LTV (TLTV), and Home Equity Line of Credit TLTV (HTLTV) ratio requirements to 95 percent for all conventional mortgages we purchase. This change applied to Home Possible Mortgages, as well as certain negotiated terms for mortgages with settlement dates on or after
June 1, 2011.

To align with this credit underwriting change, the Loan Prospector September 23 update will include changes to the following Home Possible Mortgage product names:

Offering Identifier Old Name New Name
241 Home Possible 97 Home Possible
243 Home Possible 97 Neighborhood Solution Home Possible Neighborhood Solution

Please note: The Home Possible 3 percent Cash and Home Possible 3 percent Cash Neighborhood Solution offerings were retired, effective for mortgages with settlement dates on and after
June 1, 2011.

The following revised feedback messages will be received, as applicable, for submissions and resubmissions of Home Possible Mortgages in Loan Prospector on and after September 23:

Message Code Feedback Messages
ELV 36 'Number of Units' must = 1 or 2 for Home Poss NH Solution.
ELV 37 3-4 unit property with LTV>95% not eligible for Home Poss.
ELV 40 Manufact Home must = 1-unit for Hm Poss/Hm Poss NH Solution.
ELV 43 ARMs ineligible for Home Possible 3-4 unit properties.
LPR JM This loan was submitted as Home Possible NH Solution.
LPR JK This loan was submitted as Home Possible.
PUR 41 Two months reserves required for Home Possible (2-4 unit).
PUR 42 1 mo reserves required for Hm Poss NH Solution may be a gift.


Removal of Offering Identifier 210 for Alt 97 Mortgage

The Alt 97 Offering Identifier 210 will be removed from Loan Prospector to align with the changes to eligible sources of borrower funds announced in Guide Bulletin 2012-8 on March 15, 2012. The Alt 97 Mortgage offering is being retired, effective for mortgages with settlement dates on and after August 1, 2012.

On and after September 23, you will receive the following new feedback message, as applicable, for submissions and resubmissions through Loan Prospector using the offering identifier 210 Alt 97:

Message Code Feedback Messages
INV CP This Alt 97 product ineligible for delivery to Freddie Mac.


Removal of New Construction Value of “Newly Built”

The new construction value of “Newly Built” will no longer be available through Loan Prospector for conventional loans to align with the changes announced in Guide Bulletin 2012-4, issued on February 10, 2012. On and after September 23, if “Newly Built” is selected in the new construction drop-down, Loan Prospector will return the following new feedback message:

Message Code Feedback Messages
INV CQ New Construction indicator(Newly Built) not valid for CONV.


Removal of LandSafe as a Credit Reporting Company in Loan Prospector

On September 23, Loan Prospector will be updated to remove LandSafe as a CRC option in Loan Prospector and in the system-to-system specifications. LandSafe announced earlier this year that it will no longer provide new merged credit reports to lenders and third-party originators. For more details on LandSafe discontinuing credit services in Loan Prospector, review our January 31, 2012 Single-Family News Center article, LandSafe Discontinuing Credit Services Available in Loan Prospector.


Revised Feedback Messages to Align with the FHA TOTAL Mortgage Scorecard

The following revised feedback messages will be received, as applicable, for new submissions and resubmissions of FHA loans in Loan Prospector on and after September 23:

Message Code Feedback Messages
INV BE Borr 'Present Housing Expense' must be >=0 and <$100,000.
DTE CR Gift Ltr Amt must be >0 when Gift Ltr Source is not “N/A”.
DTE CT Gift Ltr Source cannot be “N/A” when Gift Letter Amt is >0.


New and Updated Feedback Messages Provide Additional Guidance

Also, as part of this Loan Prospector September 23 release, the following feedback messages will be added and updated to provide you with guidance on using the Loan Prospector feedback certificate for all new submissions and resubmissions of conventional loans. For more information, refer to the Guide.

Feedback Messages
New
Notice: This feedback certificate is not a replacement or substitution for the requirements and information set forth in the Freddie Mac Single-Family Seller/Servicer Guide and/or Master Agreement.
Updated
Notice: This checklist is not a replacement or substitution for the requirements and information set forth in the Freddie Mac Single-Family Seller/Servicer Guide, LP Web Interface Online Help, LP User Agreement, or LP Functionality Guide.

The following updated feedback message will help customers determine the appropriate customer support telephone number to use. This feedback message will be returned on all conventional loans on and after September 23:

Feedback Message
Self-help tools and resources for this error can be found here: /learn/uw/functionality.html. For live agent assistance, please click the following link for our Customer Service Center's contact information and hours of operation: http://www.loanprospector.com/contact/.


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