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New Selling Representation and Warranty Framework Takes Effect in the New Year

December 17, 2012

The mortgages you deliver on and after January 1, 2013, may be eligible to receive future representation and warranty relief as described in Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-18. Under the new representation and warranty framework, if specific requirements are met, Freddie Mac will not exercise its remedies, including issuing repurchase requests, for breaches of certain selling representations and warranties.

The key to qualifying for enforcement relief from these representation and warranty responsibilities is to incorporate the principles of our quality control (QC) processes and deliver quality mortgages.

You can review our QC processes and practices related to our selling representations and warranties requirements in our September 11 and October 19, 2012, Industry Letters, which include details on QC sampling, mortgage file reviews, QC feedback, repurchase and appeals, and factors for determining repurchase alternatives we may offer.

The new selling representation and warranty framework provides you with more certainty about your repurchase risk exposure from the mortgages you originate and sell to us. This framework is part of a series of initiatives that the Federal Housing Finance Agency has directed Freddie Mac and Fannie Mae to implement.

For More Information

To help you become familiar with the eligibility requirements of the new framework and our QC processes, review the following resources where you will find details of our implementation.

  • The September 11, 2012, Guide Bulletin 2012-18 and Industry Letter for more information on our modified approach to exercising our remedies for breaches of certain selling representations and warranties.
  • The October 19, 2012, QC Industry Letter and Guide Bulletin 2012-22 for additional information on our QC processes and upcoming QC changes related to the new selling representation and warranty framework.
  • Our article about the exclusions under the new framework on our Single-Family News Center.
  • The webinar, Freddie Mac Quality Control, on the Learning Center.
  • New Freddie Mac Representation and Warranty Framework Web page for details on the new framework.

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