Freddie Mac issued Bulletin 2019-20 (Bulletin), announcing revisions to the Single-Family Seller/Servicer Guide (Guide). Per the Bulletin, Freddie Mac updated requirements with respect to mortgage eligibility, origination and underwriting. Specifically, Freddie Mac:
- Revised requirements relating to employed income analysis and calculation;
- Amended requirements with respect to Employer Assisted Homeownership benefits;
- Added a new Chapter 4305 for purchase transaction mortgages (The new chapter specifies acceptable use of loan proceeds, as well as the circumstances under which the borrower may receive cash back or a principal curtailment may be made);
- Updated requirements with respect to excluding certain student loan payments from the monthly debt payment-to-income ratio (DTI); and
- Revised requirements relating to the calculation of monthly housing expense-to-income and DTI ratios.
In addition, Freddie Mac updated requirements with respect to:
- Condominium projects;
- Cash-Released XChange (including revisions with respect to servicing-released premium refunds);
- Postfunding quality control reviews;
- In-house quality control programs;
- Document custody; and
- Recent borrower employment gaps;
- Automated Collateral Evaluation (ACE) eligibility;
- The disclosure of environmental hazards to the borrower;
- Seasoned LIBOR ARMs;
- Pledged mortgages;
- Certificates of incumbency; and
- Freddie Mac Relief Refinance Mortgages.
Revisions relating to servicing-released premium refunds are effective November 1, 2019.
Revisions relating to monthly housing expense-to-income and DTI ratios are effective January 2, 2020. Certain revisions relating to condominium project requirements and document custody requirements are effective January 2, 2020. Revisions relating to employed income analysis and calculation are effective April 2, 2020. All other requirements are effective immediately.
