Upcoming Loan Prospector Releases to Reflect Revised Requirements for Super Conforming Mortgages[May 1, 2009]
On April 16, Loan Prospector® was updated to reflect the higher American Recovery and Reinvestment Act of 2009 (ARRA) maximum loan limits for super conforming mortgages as announced in our Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-9 issued on April 16.
Further updates to Loan Prospector reflecting the additional credit and collateral changes for super conforming mortgages announced in our Guide Bulletin 2009-9 issued on April 16, will take place in the following phased approach:
- Loan Prospector May 21 Release: On May 21, we updated Loan Prospector to reflect the revised LTV/TLTV/HTLTV ratio requirements.
- Loan Prospector June 14 Release: On June 14, we implemented new and revised Loan Prospector feedback messages that align with the Guide Bulletin 2009-9 issued on April 16 requirement changes.
Until these updates are implemented in Loan Prospector, you must complete a manual review of the mortgage file to ensure the mortgage meets the revised requirements for sale to Freddie Mac. To aid you in this process, please review our Super Conforming Processing Reminders for Loan Prospector Mortgages job aid.
May 21 Updates to Reflect the Revised LTV/TLTV/HTLTV Ratio Requirements
On May 21, Loan Prospector was updated with the revised LTV/TLTV/HTLTV ratio requirements to support the super conforming credit requirement updates as outlined in Guide Bulletin 2009-9 issued on April 16. With this update to Loan Prospector, all new loan submissions and resubmissions will be subject to the new Guide requirements for super conforming mortgages based on the original loan amount, application date and settlement date under the permanent (Housing and Economic Recovery Act of 2008 (HERA)) and temporary (ARRA) maximum loan limits.
To assist you in determining if the loan meets the new (refers to Guide Chapter L33 requirements effective on or after May 4, 2009) or existing (refers to Guide Chapter L33 requirements effective prior to May 4, 2009) credit requirements that apply to your loan, please refer to the following matrix for guidance:
Application Date On or Before May 15, 2009 AND Settlement Date On or Before July 31, 2009 |
Application Date On or After May 15, 2009 AND/OR Settlement Date On or After July 31, 2009 |
|
|---|---|---|
| Loan amount equal to or less than the HERA county-level loan limit | Qualifies for EXISTING super conforming Guide policy parameters | Must use NEW super conforming Guide policy parameters |
| Loan amount is greater than the HERA county-level loan limit and equal to or less than the ARRA county-level loan limit | Must use NEW super conforming Guide policy parameters* | Must use NEW super conforming Guide policy parameters* |
* Loans greater than the HERA county-level maximum loan limits and at or below ARRA county-level maximum loan limits must have a delivery date on or after May 4, 2009.
Please note: Loans meeting the HERA loan limits with application dates on or before May 15, 2009, are still eligible for sale under the existing super conforming credit requirements, provided they have settlement dates on or before July 31, 2009.
Submissions in Loan Prospector on or After May 21, 2009
All super conforming mortgages submitted in Loan Prospector on or after May 21, 2009, may receive the following purchase restriction feedback messages related to revised LTV/TLTV/HTLTV ratio requirements:
| Message Code | Feedback Message |
|---|---|
| LPR - 25 | LTV/TLTV exceeds product limits |
| LPR - 06 | HTLTV exceeds max HELOC limits |
You may disregard these purchase restrictions, if the loan meets all the following requirements:
- The loan application date is on or before May 15, 2009
- The original loan amount is less than the permanent (HERA) limit for the area in which the property is located
- The loan meets the existing LTV/TLTV/HTLTV ratio limits (you must manually check to determine if the loan meets the LTV/TLTV/HTLTV ratio requirements in the Guide Chapter L33.3 version dated April 16, 2009)
- The loan will have a Freddie Mac settlement date on or before July 31, 2009
June 14 Updates to Support Super Conforming Loan Limits
On June 14, we updated Loan Prospector with new and revised feedback messages to support updates to the credit requirements for super conforming mortgages outlined in the Guide. The feedback message changes will affect all new submissions and resubmissions on or after June 14, 2009. Please review the information below to determine which messages are applicable to your submissions.
Cash-Out Refinance Mortgages
As a result of the reduction in our LTV/TLTV/HTLTV ratio requirements for super conforming mortgages in our Guide Bulletin 2009-9 issued on April 16, we also removed our restrictions on cash proceeds for cash-out refinance mortgages. To align with this change, beginning June 14, Loan Prospector will no longer return the following feedback messages:
| Message Code | Feedback Message |
|---|---|
| LPR-Z7 | For super conforming 1-unit cash-out refinance Mortgages, the disbursed cash out to the Borrower (or any other payee) may not exceed $200,000” |
| LPR-ZG | For super conforming 2, 3, or 4-unit cash-out refinance Mortgages, the disbursed cash out to the Borrower (or any other payee) may not exceed $100,000” |
Until June 14, if the super conforming mortgage is originated under the new Guide requirements (refers to the Guide Chapter L33 version dated April 16, 2009, requirements effective on or after May 4, 2009) you can disregard the above messages.
However, if the super conforming mortgage is originated under the existing LTV/TLTV/HTLTV ratio requirements, the maximum cash-out amounts indicated in the messages above still apply. These restrictions, as outlined in the Guide Section L33.4, apply even after Loan Prospector is updated on June 14.
Collateral Documentation Requirements
Loan Prospector was updated on June 14 with a new feedback message to support the new super conforming appraisal and collateral documentation requirements for super conforming mortgages announced in Guide Bulletin 2009-9 issued on April 16.
| Message Code | Feedback Message |
|---|---|
| LPN -HX | For super conforming Mortgages with a LTV/TLTV/HTLTV >80% and a loan amount of $625,500, Form 1032 is required. |
In addition, Loan Prospector was updated on June 14 with the following revised feedback message, to align with our requirements in Guide Chapter L33.6.
| Message Code | Feedback Message |
|---|---|
| LPN-Z6 | When the subject property is a condominium unit, the appraiser must provide at least two comparable sales from outside the subject project, and, if applicable, outside the influence of the developer, builder or property seller. |
| LPN-Z9 | The appraiser performing the appraisal must be qualified to perform appraisals without oversight or supervision by a "supervisory" appraiser. |
These new requirements apply to all super conforming mortgages that must meet the new Guide requirements (refers to Guide Chapter L33 requirements effective on or after May 4, 2009) even if no feedback message is returned.
For more information
- Review the Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-9 issued on April 16.
- View the maximum loan limits in designated high-cost areas.
- Review the Super Conforming Mortgages fact sheet.