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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?

Fun fact

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.

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