Selling Representation and Warranty Framework
The selling representation and warranty framework helps address Seller/Servicer concerns related to loan repurchase risk.
Under the framework, Freddie Mac will not exercise its remedies, including the issuance of a repurchase request, for breaches of certain selling representations and warranties described in
Single-Family Seller/Servicer Guide (Guide) Section 6.14(a) if a mortgage meets certain eligibility criteria.
Framework Versions 1 and 2
Guide Section 6.14 lists the requirements of Version 1 and Version 2 of the framework.
- The original framework, as introduced in September 2012, is referred to as Version 1, with the requirements applying to mortgages with Freddie Mac settlement dates on and after January 1, 2013 and before July 1, 2014.
- Version 2 refers to the framework as modified by the enhancements announced in May 2014 that are effective for mortgages with Freddie Mac settlement dates on and after July 1, 2014.
Under Version 2, a mortgage that meets certain eligibility requirements will be granted relief from certain selling representations and warranties, if one of the following conditions are met:
- The mortgage has established an acceptable payment history, or
- There is a satisfactory conclusion of a Freddie Mac quality control review.
Review the differences in requirements under Version 1 and Version 2 in these tables.
Freddie Mac provides Seller/Servicers with reports on mortgages that have been granted relief under Version 1 and Version 2 of the framework. The reports are provided to the entity responsible for the selling representations and warranties. However, Freddie Mac will discontinue the distribution of such reports in early 2015 when the Freddie Mac Loan Coverage AdvisorSM becomes available to customers.
It is important for Seller/Servicers to review Guide Section 6.14 to become familiar with the eligibility criteria and the effective dates to obtain relief under the framework.
The Framework's Life-of-Loan Exclusions
Guide Section 6.14(c) describes the exclusions to this framework. Seller/Servicers are not relieved from Freddie Mac’s enforcement of its representations and warranties with respect to the following matters:
- Charter matters.
- Misstatements, misrepresentations, and omissions.
- Data inaccuracies.
- Clear title/First Lien priority.
- Compliance with laws.
- Unacceptable mortgage products.
- Guide Bulletin 2014-21 announced changes to the framework's life-of-loan representations and warranties.
- Guide Bulletin 2014-8 announced enhancements to the representation and warranty framework.
- Guide Bulletin 2012-22 announced changes to Freddie Mac's Quality Control Processes and Requirements.
- October 19, 2012, Industry Letter provided supplemental information on Freddie Mac's Quality Control Enforcement Practices.
- Guide Bulletin 2012-18 introduced Freddie Mac's selling representation and warranty framework.
- September 11, 2012, Industry Letter described Freddie Mac's Quality Control Process.
- Overview of the Selling Representation and Warranty Framework
- Representation and Warranty Framework FAQs
- Overview of Repurchase and Appeal Process
- Understanding the Selling Representation and Warranty Relief Date Report job aid.
- Freddie Mac Loan Coverage AdvisorSM
See a side-by-side comparison of Version 1 and Version 2.