Revised Relief Refinance Mortgage Requirements and ULDD Transition Period Announced in Guide Bulletin 2013-2
January 31, 2013
To help you reach more borrowers with our Freddie Mac Relief Refinance MortgageSM offering in the new year, we are providing an additional flexibility by revising the 120-day delivery date requirement and providing new guidance regarding acceptable lender contributions, as announced in the Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-2.
With today’s Bulletin, we are also announcing a Phase II Uniform Loan Delivery Dataset (ULDD) transition period for Sellers.
You will also find important reminders on adopting the Phase II ULDD specification and selling one-year adjustable rate mortgages (ARMs) in today’s Bulletin.
Originate & Underwrite and Sell & Deliver
To make it easier for you to sell Relief Refinance Mortgages, we are making the following requirement changes:
- Removing the requirement that the mortgage be delivered no more than 120 days after the note date. To provide you with a new measure of operational ease, effective immediately, we are no longer requiring that Relief Refinance Mortgages be delivered within 120 days after the note date. Instead, Relief Refinance Mortgages must have settlement dates no more than 12 months after the note date, which aligns with the requirements for all other mortgages delivered to Freddie Mac.
A new appraisal will not be required if the Relief Refinance Mortgage is delivered more than 120 days after the note date. It is important to remember that all Relief Refinance Mortgages must have settlement dates on or before September 30, 2014, as announced in Bulletin 2012-28.
- Providing guidance for the use of lender contributions. If you plan to offer borrowers a contribution for their refinance transaction, review today’s Guide Bulletin for details on allowable cash or cash-like contributions and contributions toward the payoff of the mortgage being refinanced.
The new requirements on lender contributions are effective for mortgages with Application Received Dates on or after April 30, 2013, but you may implement them as soon as possible.
We encourage you to review the Guide Chapters on Relief Refinance Mortgages to have a full understanding of these revised requirements.
Announcing a transition period for the Phase II ULDD requirements. Today’s Bulletin also announces a transition period for the Phase II ULDD specification requirements beginning on May 17, 2014, when the selling system will be updated with the Phase II ULDD fields, and ending on August 25, 2014, when Sellers are required to begin delivering the Phase II ULDD data.
Make sure to review today’s Guide Bulletin for important reminders and additional details on:
- The Phase II ULDD Specification. The Phase II ULDD specification, published on December 13, 2012, provides the framework for collecting and delivering Phase II ULDD data for loans delivered on or after August 25, 2014. Review today’s Guide Bulletin for critical milestones and resources that can help you with your Phase II ULDD transition.
- One-year ARMs sold for Cash. On November 19, 2012, we announced that we are suspending the purchase of one-year ARMs under the Weighted Average Coupon (WAC) ARM Cash execution. We are updating the Guide to reflect this announcement.