The new policies, sent in a letter to sellers and servicers, are expected it go into effect January 1, 2016, at the direction of the Federal Housing Finance Agency (FHFA).
The origination defects and remedies framework will provide clarity on the process followed in categorizing origination defects, lender corrections of such defects, and available remedies. In addition, it will also provides more transparency regarding Fannie Mae’s discretion on loan-level decisions when reviewing a loan during a quality control review.
Donna Corley, SVP, Division Chief Risk Office of the Single Family Division at Freddie Mac, noted that the new framework is a reflection of the company's and its consumer's commitment to partner with lenders to improve loan manufacturing.
"The framework announced today will not affect our customers' operations or our full file quality control reviews for performing and non-performing loans," Corley said. "The enhanced framework is intended to provide more clarity and transparency to lenders who do business with Freddie Mac on identifying and correcting origination defects, and the remedies that are available to them. "Today's announcement also underscores Freddie Mac's commitment to work with the Federal Housing Finance Agency and other stakeholders to continually improve America's mortgage finance system."
"The framework announced today will not affect our customers' operations or our full file quality control reviews for performing and non-performing loans."
“Lenders consistently tell us that concerns about repurchases limit their willingness to lend, so we’re trying to put those concerns to rest,” said Andrew Bon Salle, EVP, Single-Family Business at Fannie Mae. “By pursuing repurchase alternatives and providing clarity on significant defects we aim to help lenders serve the market confidently, efficiently and profitably. Today’s guidance is another milestone in our efforts to provide more clarity and certainty to our customers.”
Click here to view Fannie Mae's letter.
Click here to view Freddie Mac's letter.