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Updated Documentation Requirements Provide More Flexibility as Announced in Guide Bulletin 2012-28

December 14, 2012

To provide you with more flexibility when doing business with Freddie Mac, we are revising our requirements for verbal verification of employment (VOE), verification of existence of business, and secondary financing documentation.

In addition, we are updating the Single-Family Seller/Servicer Guide (Guide) to reflect the revisions previously announced for our Freddie Mac Relief Refinance MortgageSM requirements, 2013 loan limits, and clarifications to condominium project eligibility requirements.

You can find complete details on these and the other changes outlined below in Guide Bulletin
2012-28.

Originate and Underwrite

Verbal Verification of Employment and Verification of Existence of Business

Effective immediately, you now have the option to obtain a verbal VOE for employed borrowers and verify the existence of a business from a third-party source for self-employed borrowers after the note date, but prior to the delivery date of the mortgage.

As a reminder, you must represent and warrant that the requirements of your Purchase Documents have been satisfied as of the delivery date. If you are not able to verify the borrower’s employment or the existence of business before the delivery date, the mortgage is not eligible for sale to
Freddie Mac.

Loan Prospector® feedback messages will be updated at a future date to reflect revised requirements for verbal VOEs and verifications of business; however, you can apply the new requirements to Loan Prospector mortgages effective immediately.

Relief Refinance Mortgage Expiration Date and New Delivery Deadline

As announced in our November 19, 2012, Single-Family Update email, the expiration date for our Relief Refinance Mortgage will now be based on the Application Received Date instead of the note date of the mortgage. This change is a result of the implementation of the Uniform Loan Delivery Dataset (ULDD) and the collection of Application Received Date as a data point and will make it easier for you to manage your pipeline against the December 31, 2013, expiration date of our Relief Refinance Mortgage.

Secondary Financing

We are revising our secondary financing documentation requirements to provide you with more flexibility when documenting the terms of secondary financing, the fees and costs paid in connection with secondary financing, and the evidence of subordination of secondary financing to the first lien.

In addition, we are clarifying that the requirements relating to secondary financing apply to all financing that is subordinate in lien priority to the first lien mortgage.

Additional Updates

Today’s Guide Bulletin provides additional updates, including:

  • Making minor revisions to Guide Chapter 42 to clarify our condominium project review and eligibility requirements which were simplified and reorganized in Guide Bulletin 2012-14.
  • Updating the Guide to reflect the new property valuation requirements for Relief Refinance Mortgages secured by properties affected by disasters, as announced in Guide Bulletin 2012-24.
  • Reminding Sellers/Servicers that base conforming loan limits and high-cost area loan limits will remain at the current levels for mortgages with funding or settlement dates on or before December 31, 2013, as announced in our November 29, 2012, Single Family Update email.
  • Reminding Sellers/Servicers who use the services of a warehouse lender that Freddie Mac may refuse to fund or delay funding if the warehouse lender has not submitted acceptable documentation as required in Guide Chapter 19, Warehouse Financing Arrangements.

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