Selling System News and Reminders
August 18, 2014
It's been a busy summer at Freddie Mac, and we have several selling system updates and reminders for you. Many of our changes are designed to increase loan data quality and accuracy, and could help reduce your post-funding data corrections. It's all part of our ongoing effort to enhance our tools to provide you with greater certainty that the loans you deliver to us meet our purchase requirements.
Please be sure to share the following information with others in your organization to ensure they have the latest news:
Effective Today, August 18, 2014
- Loan-to-Value (LTV) Edits: You may receive one or more critical edits to help ensure that the following requirements are met:
- The Seller-delivered LTV Ratio Percent (Sort ID 255) equals the Freddie Mac calculated LTV Ratio Percent.
- The Seller-delivered Combined LTV Ratio Percent (Sort ID 91) equals the Freddie Mac calculated Combined LTV Ratio Percent.
- The Seller-delivered Home Equity Combined LTV Ratio Percent (Sort ID 92) equals the Freddie Mac calculated Home Equity Combined LTV Ratio Percent.
Remember: If your loan has secondary financing, you must deliver the appropriate secondary financing data and include the secondary financing in your delivered values calculations.
- Construction Conversion & Renovation Mortgages with Modification Documentation Changes: You no longer need to deliver the Initial P&I Payment Amount (Sort ID 268), Scheduled First Payment Date (Sort ID 344) and Loan Maturity Date (Sort ID 340) at closing.
- Construction Conversion & Renovation Mortgages with Integrated Documentation: Freddie Mac now permits 12 months or less from the Construction to Permanent First Payment Due Date (Sort ID 167) and the Note Date to be 115 days or more before the Scheduled First Payment Date (Sort ID 272).
- Seller Owned Modified Mortgages: You no longer need to deliver the Initial Principal and Interest Payment Amount (Sort ID 268) in the Closing tab. In addition, Freddie Mac no longer requires the Construction to Permanent First Payment Due Date (Sort ID 167) to be the same as the Scheduled First Payment Date (Sort ID 272) in the Modification tab.
We encourage you to update your systems accordingly, as soon as possible.
Effective October 20, 2014
- ZIP Code Edit: The selling system will deliver a critical edit if the ZIP code delivered in the selling system does not match the ZIP code on the associated appraisal report delivered through the Uniform Collateral Data Portal®.
- Field Reviews: The selling system will allow you to select the value ‘Field Review' as the Property Valuation Method Type/Other Description (Sort IDs 89/90) for conforming loans. Previously, the selling system only allowed the ‘Field Review' value to be selected for super-conforming loans.
Data Quality Reminders
To avoid post-funding data corrections, it's critical that the data you enter is accurate and complete. Please note the following items we've identified as challenging for Sellers:
- HMDA Rate Spread Percent (Sort ID 208): The HMDA Rate Spread Percent data point captures the difference between the annual percentage rate (APR) and the average prime offer rate (APOR). This data point only needs to be provided for first lien mortgages when the HMDA Rate Spread Percent is 1.5 percent or greater. Enter the spread (difference) between the APR on the mortgage and the APOR. Do not enter the APR, APOR, or the note rate.
For help in calculating the rate spread, access the Federal Financial Institutions Examination Council's Rate Spread Calculator.
By populating this field, you are assisting Freddie Mac in determining whether the loan is a Higher Priced Mortgage Loan or High Cost Home Loan as defined by applicable Federal and state laws. For mortgages with a rate spread reported under HMDA, you should deliver to Freddie Mac the same rate spread reported under HMDA.
- Disclosed Index Rate Percent (Sort ID 312): For all ARMs, you must deliver the Disclosed Index Rate Percent, which is the value of the index (Sort ID 110-Index Source Type) used to generate the final Truth-in-Lending statement. The index is used to calculate the initial note rate for an ARM (not taking into account any discounts or premiums); and the Disclosed Index Rate Percent is the value of the index in effect on the day the disclosure to the borrower was prepared.
Selling System Tutorial
Learn more about the topics noted above, and others, in our Selling System Updates, 3rd Quarter Tutorial 2014. It's a great way to find out about recent system updates, tips, best practices, and what's coming soon.
Uniform Loan Delivery Dataset (ULDD) Phase 2 Effective Date
And last, don't forget that the ULDD Phase 2 effective date is right around the corner. All loans with Application Received Dates on or after March 1, 2014, and delivered on or after August 25, 2014, must meet the ULDD Phase 2 requirements. We have several tools to help you prepare:
- Customer Test Environment: Simply enter your existing login to leverage the CTE and test your loan delivery processes.
- Prepare for the ULDD Phase 2 Conversion job aid.
- Get Ready for ULDD Phase 2 tutorial.
If you have questions about the selling system changes, please contact your Freddie Mac representative.