Updates to Condominium Delivery Fee, Relief Refinance Mortgages and Asset Documentation Announced in Bulletin 2013-18
September 24, 2013
Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-18 announces selling and servicing updates including:
- Elimination of the California Condominium Unit Mortgages delivery fee.
- Updated requirements for fraud training and reporting.
- Revised requirements for asset documentation.
- Updated requirements for underwriting borrowers on temporary leave.
- Revised Freddie Mac Relief Refinance MortgageSM eligibility requirements.
Today's Guide Bulletin also includes other important updates that may impact the way you do business with us. Review the Bulletin and applicable Guide chapters for complete information on the revised requirements summarized below.
Originate & Underwrite, Sell & Deliver, and Servicing
Eliminating the delivery fee for California Condominium Unit Mortgages. We will no longer assess the delivery fee for California Condominium Unit Mortgages, effective for mortgages with settlement dates on or after October 1, 2013. As a result, we are removing all references and requirements associated with this delivery fee from the Guide.
- Updates to fraud training and reporting. To ensure that adequate fraud prevention measures are in place, effective October 1, 2013, we are requiring that you train the third-party vendors you retain for your mortgage business in the prevention, detection, and reporting of mortgage fraud. In addition, we are specifying that you must have written procedures for reporting fraud and must report to us when you first know or suspect an incident of fraud in connection with a mortgage sold to or serviced for Freddie Mac.
Originate & Underwrite
- Revised requirements for asset documentation. We are updating our asset documentation requirements including, but not limited to, those related to:
- Verifying large deposits that appear in a borrower's asset account statement.
- Using direct account verifications to document assets.
- Using an IRS-qualified employer retirement account as reserves.
The Streamlined Accept and Standard Documentation requirements, as well as the general requirements for verifying documents, have been updated to reflect these changes.
These updated requirements are effective for mortgages with settlement dates on or after March 1, 2014, but you are encouraged to implement them as soon as possible.
Loan Prospector® feedback messages will be updated to reflect these changes.
- Underwriting borrowers on temporary leave. We are updating our requirements for underwriting borrowers on temporary leave from their current employment.
Sell & Deliver
- Updated Relief Refinance Mortgage requirements. We are making the following revisions to our Relief Refinance Mortgage offering:
- Effective immediately, a restructured mortgage may be refinanced as a Relief Refinance Mortgage. Such Relief Refinance Mortgages may be delivered to Freddie Mac through a flow Purchase Contract. In addition, we are stating in the Guide that a mortgage that is being considered for or that received a Freddie Mac modification is eligible for a refinance under our Relief Refinance Mortgage offering.
- Effective on January 1, 2014, we are retiring Guide Chapter C24 because it outlines the requirements only for Relief Refinance Mortgages with Application Received Dates prior to November 19, 2012. In addition, all other Guide references and requirements related to Relief Refinance Mortgages with Application Received Dates prior to November 19, 2012, will also be removed. As a result, Relief Refinance Mortgages with Application Received Dates prior to November 19, 2012, must have Freddie Mac Settlement Dates before January 1, 2014. Sellers should continue following requirements of Chapters A24 and B24, as applicable, for all Relief Refinance Mortgages with Applications Received dates on or after November 19, 2012.
Other Guide Updates
Review today's Guide Bulletin for details on other important Guide updates on, but not limited to:
- Investor Feature Identifiers for temporary subsidy buydown mortgages.
- Acknowledgement Agreements.
- Credit report standards.
- Determination of compliance with loan limits for mortgages with financed mortgage insurance premiums.
Get More Information
For detailed information on the updated requirements announced in today's Guide Bulletin: