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Freddie Mac Revises Miscellaneous Selling, Servicing Policies

April 25, 2014

On April 24, Freddie Mac issued Single-Family Seller/Servicer Guide Bulletin 2014-06, which notifies sellers and servicers of numerous miscellaneous policy updates. The Bulletin, among other things, (i) requires sellers and servicers to immediately notify Freddie Mac of a guilty plea indicating lack of integrity or upon being notified that law enforcement or another governmental authority is investigating or prosecuting a Seller/Servicer’s board member, officer, employee or contractor for fraud; (ii) updates flood insurance requirements and updates related forms; and (iii) revises the process for requesting and obtaining physical or constructive possession of a note as well as related document custodial functions and duties. The Bulletin also (i) removes the requirement that a borrower maintain six month’s rent loss insurance for a 2- to 4-unit primary residence when using rental income as qualifying income; and (ii) clarifies selling requirements related to unemployment compensation as an eligible source of income for Relief Refinance Mortgages, and the applicability of certain resale restrictions.