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Selling Representation and Warranty Framework Life-of-Loan Exclusions

The following chart summarizes enhancements to the life-of-loan representations and warranties under the selling representation and warranty framework, as announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-21.

These changes were jointly announced with Fannie Mae at the direction of the Federal Housing Finance Agency.

Exclusions*New Requirements
(Retroactive to Freddie Mac settlements on or after 1/1/13)
Previous Requirements
Charter Matters No change. No change.
Misstatements, Misrepresentations, and Omissions
  • Involves 3 or more mortgages sold to Freddie Mac by the same seller.
  • Were made according to a common pattern of activity which involved at least one party common to all mortgages.  If the common party is the Seller, then the same individual within the Seller's organization; if the common party is a third party, then the same individual or entity.
  • Significance test applies as described in Guide Section 1301.11(c). The misstatement, misrepresentation, or omission is significant if, using true and accurate information, the mortgage would not have been eligible for sale, or would have been eligible, but under different terms.
  • If a mortgage involves fraud, it will be subject to repurchase regardless of the “significance” test.  See Guide Section 1301.11(c) for details on what establishes fraud for the purposes of this life-of-loan exclusion.
  • Involved 2 or more mortgages or related real estate transactions.
  • Were made by 2 or more parties.
Data Inaccuracies
  • Data inaccuracies affect 5 or more mortgages and involve the same delivery data elements.
  • The ULDD data differs from the information in the mortgage file that was used to underwrite the mortgage. 
  • Significance test applies as described in Guide Section 1301.11(c). The data inaccuracy is significant if, using true and accurate information, the mortgage would not have been eligible for sale or would have been eligible, but under different terms.
  • Multiple mortgages are involved.
  • The ULDD data differs from the information in the mortgage file that was used to underwrite the mortgage.
  • The information in the mortgage file indicates that the mortgage was not eligible.
Clear Title/First Lien No change. No change.
Compliance with Laws No change to framework Guide Section 1301.11(c)** No change.
Mortgage Products Eligibility
  • Renamed to “Unacceptable Mortgage Products.”
  • Expanded non-exhaustive list of unacceptable mortgage products.
  • Formerly named “Mortgage Products Eligibility.”
* For complete requirements, see Guide Section 1301.11(c).
** Underlying provisions of the Guide regarding compliance with laws was amended in Guide Section 1301.2(a) and applies to all mortgages with Freddie Mac settlement dates on or after 11/20/14.

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