As the housing market continues to change, we remain focused on providing you business opportunities that are grounded on responsible lending standards. At the same time, we are committed to improving data and loan quality in support of a strong home financing industry.
With Single-Family Seller/Servicer Guide (Guide) Bulletin 2011-10, we are making changes to our selling requirements to improve the quality of appraisal data and introduce additional borrower qualification sources.
Review today’s Guide Bulletin to get complete details on the Guide changes outlined below.
PROPERTY ELIGIBILITY AND APPRAISAL REQUIREMENTS
Property underwriting and appraisal review requirements
Effective for Mortgages with Settlement Dates on or after September 1, 2011, we are updating Chapter 44, Appraisals, Inspections and the Property Inspection Alternative, to align our requirements for reviewing the appraisal report and underwriting the property with current appraisal report forms. We are also revising Section 44.15(c ), Neighborhood Section, to reinforce Freddie Mac’s commitment to purchase eligible Mortgages in all neighborhoods and market areas, and in particular, to provide additional guidance on underwriting properties in rural locations.
In addition, we are updating Section 44.2, General Property Eligibility Requirements, to remind Sellers that they are responsible for placing as much emphasis on the adequacy of the property as collateral as on underwriting the Borrower’s creditworthiness.
Changes relating to implementation of the Uniform Appraisal Dataset
Effective for appraisals with effective dates on or after September 1, 2011, we are updating Chapter 44 to provide additional information related to properties with certain conditions or quality of construction issues. Specifically, we are revising Section 44.15(e), Property Description and Analysis, to specify that a Mortgage secured by a property with a UAD condition rating of C5 or C6, or a UAD quality rating of Q6, is eligible for delivery to Freddie Mac only if all issues that caused the property to be rated as such are cured prior to delivery of the Mortgage to Freddie Mac.
As a reminder, for appraisals with effective dates on or after September 1, 2011, Freddie Mac appraisal report Forms 70, 465, 466 and 2055 must be completed using the UAD when reporting results of an appraisal for a conventional Mortgage, as specified in Section 44.20, Appraisal Data and Delivery.
Effective for conventional Mortgages that require appraisal reports and have Delivery Dates on or after March 19, 2012, we are requiring all appraisal photographs to be in color and eliminating the acceptability of facsimile copies of appraisal reports. Sections 44.12, Required Exhibits and Addenda, and 44.21, Electronic Transmission of Appraisal and Inspection Reports, have been updated to reflect these changes.
Uniform Collateral Data Portal requirements – Effective for all Mortgages with appraisals submitted to the UCDP
As announced in a Single-Family Update e-mail on April 12, 2011, the UCDP will be available for use on June 27, 2011.
For all Mortgages with appraisals submitted to the UCDP:
- The submission of appraisal report forms to the UCDP does not relieve the Seller from compliance with Freddie Mac appraisal requirements and does not affect Seller representations and warranties regarding appraisals and the Mortgaged Premises
- The Seller’s ability to select a lender’s agent or other party such as an appraisal management company in connection with the use of the UCDP does not constitute Freddie Mac’s endorsement or approval of such party and does not relieve a Seller of any obligations pursuant to the Guide or the Seller’s other Purchase Documents, including the requirements in Section 2.24, Freddie Mac Exclusionary List, related to the Exclusionary List
Section 44.20 has been updated to reflect the language above. Note that this language is applicable to all appraisals submitted to the UCDP, including those that are submitted prior to the future effective date of the Guide section, March 19, 2012. Mortgages delivered to Freddie Mac
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