Freddie Value Reconsider Requests


On May 1, Freddie provided guide updates related to underwriting.


  • Freddie issued Bulletin 2024-6 on reconsideration of value process requirements.
  • Also issued updates on underwriting and credit reports in Loan Product Advisor (LPA).
  • Reconsideration of Value
  • Implemented requirements related to reconsideration of value (ROV) that promote consistency when a perceived appraisal issue and/or appraisal deficiency exists.
  • Seller must have policies and procedures in place addressing seller/borrower requests.
  • Defined ROV policy and procedure requirements; seller requirements established.
  • Updates to ROV policy impact Freddie Guide Section 5604.4 (opinion of market value).
  • Title Letter Opinions
  • Expanded types of mortgages eligible for delivery with attorney opinion of title letter.
  • Including mortgages secured by a unit in a condo project, by a property subject to restrictive agreements or restrictive covenants, by property located in US jurisdictions.
  • Expansion impact Freddie Guide Sections 4702.1, 4702.3, 4702.4 and 4702.7.
  • Credit Underwriting
  • Updated guide to specify that a credit report must generate an inquiry that can be identified on subsequent credit reports (i.e., the credit report must be a hard pull).
  • When Seller is processing multiple mortgage applications for the same Borrower, same assets may be used to meet the reserve requirements for each mortgage transaction.
  • Limited acceptable sources of large deposits to borrower's income, funds awarded provided source is not an interested party, funds derived from eligible asset types.
  • Impacted Guide S. 5203.1 (credit reports), 5501.2 (reserves), 5501.3 (asset eligibility)
  • Loan Produce Advisor Assessment
  • Removed requirement that at least 1 borrower on transaction must have usable credit score for Loan Product Advisor to consider borrower cash flow in credit assessment.
  • As part of this expansion to the cash flow eligibility requirement, for Loan Product Advisor Accepts, if positive cash flow is identified and no Borrower has a credit score.
  • Feedback will indicate Seller not required to document additional payment references.
  • Required that trended credit data be included in credit reports submitted to LPA.
  • Updated automated income assessment with Loan Product Advisor using tax data to clarify that IRS Form 8821 is an acceptable alternate form in lieu of IRS Form 4506-C.
  • Updates impacted Freddie Guide Sections 5201.1, 5203.1, 5302.5, and 5903.5.
  • Duty to Service Fee Cap
  • In connection with delivery of mortgages eligible for duty to serve credit fee caps in Bul 2022-22, sellers not required to deliver ULDD Identifier value of J84, #152184.
  • To indicate premise located in rural area and originated by a small financial institution.
  • Will use ULDD data points party role type (Sort ID 628), party role identifier (Sort ID 627) for loan origination company when determining if mortgage meets requirements.
  • Screen name for party role identifier appears as loan origination company identifier.
  • Updates will impact Freddie Guide sections 6302.8; also, Exhibits 19A and 34.
  • Unform Instruments
  • In response to industry feedback, published additional State-specific MultiState 30-day average SOFR ARM instruments that require State-specific authorized changes.
  • There is no content changes to newly published instruments other than incorporating all State-specific required authorized changes and adding a State-specific tagline.
  • Instruments available to immediate use; updates impact Freddie Guide Exhibit 4A.
  • ULDD Data Point Implementation
  • Added clarifying language to the implementation notes for ULDD Data Point Down Payment Source Type (Sort ID 173/174) to use the valid value of Originating Lender.
  • For all lender sources, including a non-originating lender; impacted Guide S. 6302.5.
  • Clarified language to the implementation notes for ULDD data point bedroom count (Sort ID 77) for one-unit properties valued by a hybrid appraisal; impact S. 6302.8.
  • Effectiveness
  • New requirements for handing of ROV requests will become effective Aug. 29, 2024.
  • Acceptable sources for large deposit provisions becomes effective on Sep. 30, 2024.
  • Updated requirements related to the inclusion of traded credit data effective Aug. 4.
  • Loan Product Advisor assessment provisions related to credit score effective May 5.
  • Uniform instruments must be used for mortgage notes dates on/after Nov. 1, 2024.
  • In May 2024, FHFA reported on appraisal reconsideration of value policies, #210755.
  • In May 2024, HUD issued amended ROV guidance and lender requirements, #210754.
  • In May 2024, Fannie published updated appraisal ROV requirements, see #210750.
  • Aug. 2024 Freddie Updated Effectiveness
  • On Aug. 6, 2024, Freddie issued extension of mandatory effective date from Aug. 29, 2024 application received dates to application received dates on, after Oct. 31, 2024.

Regulators Freddie
Entity Types Bank; CU; MG Orig; Servicer; Thrift
Reference Bul 2024-F, 8/6/2024; Bul 2024-6, 5/1/2024; IRS Form 8821;
Functions Actuarial and Valuation; Compliance; Financial; Legal; Operations; Underwriting
Countries United States of America
Category
State
Products Banking; Loan; Mortgage
Regions Am
Rule Type Final
Rule Date 5/1/2024
Effective Date 10/31/2024
Rule Id 210584
Linked to Rule :152184
Reg. Last Update 8/6/2024
Report Section US Banking

Last substantive update on 08/07/2024