Skip to Page Content | Skip to Site Navigation | Skip to Section Navigation

Frequently Asked Questions

The following answers to frequently asked questions provide additional information about changes to our cash, servicing-released execution, as announced in Single-Family Seller/Servicer Guide Bulletin 2010-9.

  1. What are the criteria used to determine if a Seller is able to sell loans through the cash, servicing-released execution?
  2. If our organization is no longer approved to sell loans through the cash, servicing-released execution, are we still liable for the selling representations and warranties on loans previously delivered using this sale option?
  3. If we are removed from the cash, servicing-released execution, can we re-apply in the future? If so, how can we re-apply?
  4. What is the turnaround time for evaluating and responding to our application for re-entry into the cash, servicing-released execution?
  5. If we are removed from the cash, servicing-released execution, what will happen to the loan commitments currently in our pipeline?
  6. Once we have been approved to sell mortgages through the cash, servicing-released execution, how long will our approval be valid?
  7. If our status as an approved Freddie Mac Seller were to ever end, would we still be liable for the selling representations and warranties on loans previously delivered using this sale option?
  8. Our organization’s financial condition has changed since Freddie Mac determined we are not able to use the cash, servicing-released execution. How do we submit updated financials for further evaluation to determine if we may be approved to use this execution option?
  9. If we are a Seller-only entity and we are removed from cash, servicing-released execution, how else can we do business directly with Freddie Mac?
  10. If we are removed from the cash, servicing-released execution, will this impact our ability to continue to sell mortgages to Freddie Mac using the cash, servicing-retained option; cash using a concurrent transfer of servicing; or for securities using a Guarantor or MultiLender Swap execution?  
  11. Our organization has more than one approved Freddie Mac Seller number. If we received a letter stating that we are no longer eligible to use the cash, servicing-released execution, are the other branches of our organization, which have different Seller numbers, also prohibited from using this execution?
  12. We only use the cash, servicing-released execution to obtain indication pricing for our own execution analyses. Will we still be able to obtain cash, servicing-released indication pricing, even though we can no longer sell mortgages through this execution?
  1. What are the criteria used to determine if a Seller is able to sell loans through the cash, servicing-released execution?

    A Seller's ability to sell loans through the cash, servicing-released execution is based on a combination of interdependent factors. Each Seller is evaluated on an individual basis to determine if they are eligible to use this execution option. Some of the primary factors used to determine a Seller’s eligibility include, but are not limited to:

    • Overall credit quality of loans sold to Freddie Mac
    • Seller financial strength
    • Total amount of servicing assets
    • Historical volume delivered through the cash, servicing-released execution
    • Inactivity/lack of use of the cash, servicing-released execution
  2. If our organization is no longer approved to sell loans through the cash, servicing-released execution, are we still liable for the selling representations and warranties on loans previously delivered using this sale option?
    Yes. Your organization is still liable for the selling representations and warranties because we are only discontinuing your access to the cash, servicing-released execution, not your status as a Freddie Mac-approved Seller. As a result, your representation and warranty obligations as it relates to mortgages previously sold to us through the cash, servicing-released execution still apply.
  3. If we are removed from the cash, servicing-released execution, can we re-apply in the future? If so, how can we re-apply?

    Yes. If a significant event occurs that improves your organization’s financial condition, after a minimum of six months following this event your organization may re-apply to use the cash, servicing-released execution.

    If you are a mortgage banker (unregulated institution), you must submit an updated Form 1055, Mortgage Bankers Financial Reporting Form, online at www.mbfrf.org.  You can also download this form and view instructions for use on FreddieMac.com at /singlefamily/forms/sell/1055_update.html.

    For other regulated institutions, you must submit Form 16SF, Annual Eligibility Certification Report, and/or Form 1107SF, Seller/Servicer Change Notification Instructions, as applicable, to Freddie Mac to report changes in your organization’s financial status or structure.
  4. What is the turnaround time for evaluating and responding to our application for re-entry into the cash, servicing-released execution?

    We will determine your ability to use the execution and respond to your application within 10 business days.
  5. If we are removed from the cash, servicing-released execution, what will happen to the loan commitments currently in our pipeline?

    We will honor loan commitments currently in your pipeline through purchase. However, you will not be able to take out new loan commitments using the cash, servicing-released sale option after the effective date of your removal.
  6. Once we have been approved to sell mortgages through the cash, servicing-released execution, how long will our approval be valid?

    You will be approved to sell mortgages using the cash, servicing-released execution unless we notify you otherwise.

  7. If our status as an approved Freddie Mac Seller were to ever end, would we still be liable for the selling representations and warranties on loans previously delivered using this sale option?

    Yes. Your organization would still liable for the selling representations and warranties. The contract and Guide terms in place at the time of the sale are not voided based on your approval status with Freddie Mac.

     

  8. Our organization's financial condition has changed since Freddie Mac determined we are not able to use the cash, servicing-released execution. How do we submit updated financials for further evaluation to determine if we may be approved to use this execution option?

    If you are a mortgage banker (unregulated institution), you must submit an updated Form 1055, Mortgage Bankers Financial Reporting Form, online at www.mbfrf.org. You can also download this form and view instructions for use at /singlefamily/forms/sell/1055_update.html.

     

    For other regulated institutions, you must submit Form 16SF, Annual Eligibility Certification Report, and/or Form 1107SF, Seller/Servicer Change Notification Instructions,as applicable, to Freddie Mac to report changes in your organization’s financial status or structure.

  9. If we are a Seller-only entity and we are removed from cash, servicing-released execution, how else can we do business directly with Freddie Mac?
    To continue doing business with us, you will need to enter into a Concurrent Transfer of Servicing Agreement with a Freddie Mac-approved Servicer. To establish this arrangement, both your organization and the Servicer must submit a fully executed Form 960, Agreement for Concurrent Transfer of Servicing for Single-Family Mortgages.
  10. If we are removed from the cash, servicing-released execution, will this impact our ability to continue to sell mortgages to Freddie Mac using the cash, servicing-retained option; cash using a concurrent transfer of servicing; or for securities using a Guarantor or MultiLender Swap execution? 

    No.  A Seller's change in their ability to use the cash, servicing-released execution does not affect their ability to sell mortgages to us for cash, servicing-retained; cash using a concurrent transfer of servicing; or for securities using a Guarantor or MultiLender Swap execution.
  11. Our organization has more than one approved Freddie Mac Seller number. If we received a letter stating that we are no longer eligible to use the cash, servicing-released execution, are the other branches of our organization, which have different Seller numbers, also prohibited from using this execution?

    No, this does not apply to other branches of your organization, which have different Seller numbers. We recently removed selling system access to the cash, servicing-released functionality, for Seller numbers that have been inactive for the most recent 12-month period. Organizations that currently have more than one approved Freddie Mac Seller number in the same Seller family may have their system access removed for a particular Seller number, while other Seller numbers remain active. If you received a letter stating that you are no longer eligible for this execution option, it applies only to the organization and Seller number identified at the bottom of the letter.
  12. We only use the cash, servicing-released execution to obtain indication pricing for our own execution analyses. Will we still be able to obtain cash, servicing-released indication pricing, even though we can no longer sell mortgages through this execution?

    No. At this time, the rate sheet pricing functionality in the selling system is tied to a Seller’s eligibility for the cash, servicing-released execution. Because your organization is no longer eligible to use this execution, you will not be able to continue receiving indication pricing for the servicing-released execution.

Back to Top