Payment Reversal Quick Fixes
Did you know that Freddie Mac refunds about 30 million dollars in principal payment reversals greater than $3,000 every year?
All principal reversals greater than $3,000.00 are subject to Freddie Mac approval. To expedite the approval process, please give your Investor Reporting representative a clear explanation of the reversal cause.
Going forward, we’ll grant approvals on a case-by-case basis if we have correct documentation, a clear explanation, any additional information needed from your company, and resolution from the Servicer.
|Reason for Principal Payment Reversal||Quick Fix|
|Insufficient funds or stop payments and encoding errors||Process the payment reversal prior to reporting or retransmit a revised transaction by removing the principal portion of the payment during the reporting window period.|
|Misapplied payments||Retransmit the transaction with the correct principal payment amount, if you find the payment misapplication before the end of the reporting window.|
|Funding errors||Enter the correct amount of unpaid principal balance at the point of sale.|