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New and Updated Feedback Messages to Reflect Recent Single-Family Seller/Servicer Guide Changes May 22, 2009

In recent months, Freddie Mac has issued several Single-Family Seller/Servicer Guide (Guide) Bulletins, that outline updates to our requirements. To help you identify the impact of these changes at origination, we updated Loan Prospector to reflect new and updated feedback messages that align with these recent changes.

These new and updated feedback messages are effective for all Loan Prospector submissions, including new submissions and resubmissions as of June 14. Below is a complete list of the feedback messages, as well as the date of the corresponding Guide Bulletin that summarizes the previously announced changes:

  
Message Code Feedback Message Purpose Corresponding
Guide Bulletin		 Effective Date
New Feedback Messages
LPR HU If this loan is for a unit in a new or newly converted attached Florida condominium project, it is required to comply with S/S Guide Chapter 42 to be eligible for sale to Freddie Mac, and requires delivery of a special characteristics code (SCC). Indicates the underwriting review of condominium projects to ensure that both the project and the condominium unit mortgage, meet the Guide requirements and are delivered to Freddie Mac with the special characteristic code (SCC) for condos. Guide Bulletin 2009-7 issued on March 31, 2009. Effective for Freddie Mac settlements on or after July 1, 2009.
LPN HV Review for Accuracy: Loan was submitted with buydown plan and fixed-rate mortgage; borrower must be qualified using monthly housing payment calculated at the Note rate. Indicates the need to review the buydown plan for fixed-rate mortgages (including balloon/reset mortgages) and the need to qualify the borrower using the monthly housing payment calculated at the note rate. Guide Bulletin 2009-7 issued on March 31, 2009. Effective for Freddie Mac settlements on or after July 1, 2009.
LPN HW Review for Accuracy: Loan was submitted with buydown plan and adjustable rate mortgage; borrower must be qualified using monthly housing payment calculated at the higher of the Note Rate or the fully indexed rate. Indicates the need to review the buydown plan for ARMs and the need to qualify the borrower using the monthly housing payment calculated at the higher of the note rate or the fully indexed rate. Guide Bulletin 2009-7 issued on March 31, 2009. Effective for Freddie Mac settlements on or after July 1, 2009.
LPR ZK Owner-Occupied or Second Home Property: Financing concessions cannot exceed nine percent of value. Indicates maximum financing concessions allowed on LTV/TLTV ratios equal to or lesser than 75 percent when financing concessions are prevalent in purchase transactions for primary residences and second homes. Review for accuracy. November 15, 2007  Effective for Freddie Mac settlements on or after March 1, 2008.
LPR ZL Owner-Occupied or Second Home Property: Financing concessions cannot exceed six percent of value. Indicates maximum financing concessions allowed on LTV/TLTV ratios greater than 75 percent and equal to or less than 90 percent when financing concessions are prevalent in purchase transactions for primary residences and second homes. Review for accuracy. November 15, 2007  Effective for Freddie Mac settlements on or after March 1, 2008.
LPR ZM Owner-Occupied or Second Home Property: Financing concessions cannot exceed three percent of value. Indicates maximum financing concessions allowed on LTV/TLTV ratios greater than 90 percent when financing concessions are prevalent in purchase transactions for primary residences and second homes. Review for accuracy. November 15, 2007  Effective for Freddie Mac settlements on or after March 1, 2008.
Updated Feedback Messages (Existing messages updated with new language)
LPR 1C Direct verification of mortgage payment history is required for mortgages not verified on credit report. The mortgage is ineligible for sale to Freddie Mac if the direct verification reveals more than 1x30 days or any 60-days or more delinquencies in the last 12 months. Indicates the mortgage payment histories for qualifying borrowers must be directly verified during the prior 12-month period and the borrower was not more than 30 days delinquent more than one time or 60-days delinquent. Guide Bulletin 2009-7 issued on March 31, 2009. Effective for Freddie Mac settlements on or after July 1, 2009.
WEB 5E Mortgage Verification: Direct verification of mortgage payment history is required for any mortgages not verified on the LP credit reports requested through Loan Prospector. The Mortgage is ineligible for sale to Freddie Mac if the direct verification reveals more than 1X30 days or any 60-days or more delinquencies in the last 12 months. Indicates the mortgage payment histories for qualifying borrowers must be directly verified during the prior 12-month period and the borrower was not more than 30 days delinquent more than one time or 60-days delinquent. Guide Bulletin 2009-7 issued on March 31, 2009 Effective for Freddie Mac settlements on or after July 1, 2009.
CRW A5 Ratio Warranty: Not required to determine if the borrower's primary housing expense-to-income and total obligation-to-income ratios meet Freddie Mac requirements. Indicates the calculation or evaluation of the borrowers debt-to-housing gap ratio is no longer required. October 17, 2008  Effective for Freddie Mac settlements on or after January 2, 2009.
CRW A6 Ratio Warranty: Required to determine if the borrower's primary housing expense-to-income and total obligation-to-income ratios meet Freddie Mac requirements. Indicates the calculation or evaluation of the borrowers debt-to-housing gap ratio is no longer required. October 17, 2008  Effective for Freddie Mac settlements on or after January 2, 2009.
LPR 2E None of the borrowers may have individual and/or joint ownership of more than four 1- to 4-unit financed residential properties, including the subject property. Indicates the borrowers cannot have ownership of more than four 1-to 4-unit properties. April 22, 2008  Effective for Freddie Mac settlements on or after August 1, 2008.
LPR 2D Investment Property: Financing concessions cannot exceed two percent of value. Indicates maximum financing concessions allowed on LTV/TLTV ratio when financing concessions are prevalent in purchase transaction for an investment property. Review for accuracy. November 15, 2007  Effective for Freddie Mac settlements on or after March 1, 2008.
Updated Feedback Messages (Updated when existing feedback messages are returned)
LPN ZB An update of the original appraisal is required within 120 days before the effective date of the permanent financing.

Indicates an appraisal update is required for mortgages delivered more than 120 days after the note date. The effective date of the appraisal update must be no more than 60 days prior to the delivery date or settlement date.

 October 17, 2008  Effective for Freddie Mac settlements on or after January 2, 2009.
PUR 25 LTV/TLTV exceeds product limits. Indicates that the LTV/TLTV ratio exceeds product guidelines modification to include Home Possible® 2-to 4- units with a LTV ratio greater than 85 percent and TLTV ratio greater than 95 percent. May 29, 2008  For mortgages with applications dated on or after June 1, 2008.

On June 14, to align with the recent requirement changes the following feedback messages were removed from Loan Prospector:

  
Message Code Feedback Message Corresponding Guide Bulletin
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. Guide Bulletin 2009-9 issued on April 16, 2009.
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. Guide Bulletin 2009-9 issued on April 16, 2009.
LPR DF Secondary Financing: The secondary financing on this Alt 97 loan must be an Affordable Second and must meet all the requirements applicable to Affordable Seconds. November 15, 2007 

In addition, on June 14 Loan Prospector was updated with the following new and updated feedback messages effective for all Loan Prospector submissions, including new submissions and resubmissions.

  
Message Code Feedback Message Purpose
New Feedback Messages
REP B6 Lack of recent consumer finance company account information Indicates more information is needed about the consumer finance company account.
REP B5 Lack of recent auto finance loan information. Indicates more information is needed about the auto finance loan.
INV CL Initial Interest Loans are not eligible for streamline refi Indicates Initial InterestSM mortgages are not eligible.

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