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.
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.
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.
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.
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
