Loan Prospector December 13 Release
Revised January 6, 2009
On December 13, we updated Loan Prospector® to align with previously announced underwriting and credit requirement changes. To help you identify these changes at origination, Loan Prospector was updated with new and revised feedback messages to reflect:
- Revised underwriting requirements announced in our July 10 Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-18.
- Revised credit and property eligibility requirement changes announced in August 20 Guide Bulletin 2009-22 and October 9 Guide Bulletin 2009-24.
We also updated Loan Prospector to reflect the reduced maximum loan-to-value (LTV) ratios for all cash-out refinance mortgages secured by 1-unit primary residences announced in the Guide Bulletin 2009-24.
New and Updated Feedback Messages to Support Revised Underwriting Requirements
On December 13, we added new and updated Loan Prospector feedback messages to provide you with additional guidance on our revised underwriting requirements for employment, income and assets, as announced in Guide Bulletin 2009-18. As announced in Guide Bulletin 2009-24, these changes are effective for all mortgages with application dates on or after December 14, 2009, and Freddie Mac settlement dates on or after April 1, 2010.
Review the new and updated feedback messages, effective on December 14 for all Loan Prospector submissions, including new submissions and pipeline loans.
We encourage you to begin underwriting mortgages with the underwriting requirements announced in Guide Bulletin 2009-18 prior to the December 13 Loan Prospector release to strengthen your origination process and enhance the quality of mortgages you deliver to Freddie Mac. For assistance, please use the Loan Prospector Processing Reminders for Mortgages With Submission Dates Prior to December 14, 2009 tool. This tool provides the necessary information to apply the manual overlays and manage the existing Loan Prospector feedback messages.
New and Updated Feedback Messages to Reflect Recent Single-Family Seller/Servicer Guide Changes
On December 13, we updated Loan Prospector with the following new and updated feedback messages to support credit and property eligibility requirement changes announced in Guide Bulletin 2009-22 and Guide Bulletin 2009-24. All new and revised feedback messages were effective for all new submissions and resubmissions on or after December 14, 2009, and are effective for mortgages with Freddie Mac settlements dated on or after February 1, 2010.
| Message Codes | Feedback Message | Purpose | Corresponding Guide Bulletin |
|---|---|---|---|
| New Feedback Message | |||
| ELV 97 | Initial Interest loan is ineligible as Cash-out refinance. | Indicates cash-out refinance mortgages are not eligible for purchase as an Initial InterestSM Mortgage. | Guide Bulletin 2009-24 |
| Updated Feedback Messages (Existing messages updated with new language) | |||
| ELV CL | Purpose of refinance is ineligible. | Indicates the loan was submitted as a no cash-out refinance Freddie Mac-owned streamlined or a no cash-out streamlined refinance mortgage and is not eligible for sale to Freddie Mac. | Guide Bulletin 2009-24 |
| LPN ZD | For super conforming Mortgages with LTV/TLTV/HTLTV >75% and the value of the Mortgaged Premises is >$1,000,000, Form 1032 is required. | Indicates super conforming mortgages require a Form 1032, One-Unit Residential Appraisal Field Review Report, only when the LTV/TLTV/HTLTV ratio is greater than 75 percent and the value is $1,000,000 or greater. | Guide Bulletin 2009-22 |
As a reminder per Guide Bulletin 2009-24, all new Freddie Mac-owned Streamlined Refinance Mortgages must be manually underwritten and not submitted to Loan Prospector for assessment.
Updating Loan Prospector to Align With Revised Loan-to-Value Ratios for Cash-Out Refinance Mortgages
In our Guide Bulletin 2009-24, we lowered the maximum loan-to-value (LTV) without and with secondary financing/total LTV (TLTV)/home equity line of credit TLTV (HTLTV) ratios for cash-out refinance mortgages secured by one-unit primary residences from 85%/80%/85%/85% to 80%/75%/80%/80%. This change is effective for mortgages with settlement dates on or after February 1, 2010.
On December 13, we updated Loan Prospector to align with the new ratios. On or after December 13, if you resubmit a cash-out refinance mortgage using the higher LTV ratio, you will receive the following purchase restriction message:
Message Code |
Feedback Message |
Purpose |
|---|---|---|
PUR 25 |
LTV/TLTV exceeds product limits. |
Indicates the LTV/TLTV/HTLTV ratios exceed Freddie Mac’s limit on a 1-unit cash-out refinance. |
You may disregard this message if the mortgage:
- Has a settlement date before February 1, 2010.
- Meets the LTV/TLTV/HTLTV ratios in effect prior to this date.
For more information
- Review the October 9 Guide Bulletin 2009-24
- Review the August 20 Guide Bulletin 2009-22
- Review the July 10 Guide Bulletin 2009-18
- Loan Prospector December 13 Release Feedback Messages
Training Resources
- Freddie Mac Learning Center Underwriting Training and Education Resources
- Loan Prospector Documentation Matrix (For Mortgage Applications on or After December 14, 2009 and Freddie Mac Settlements on or After April 1, 2010)
- Loan Prospector Documentation Matrix (For Mortgage Applications on or Before December 13, 2009 and Freddie Mac Settlements on or Before March 31, 2010)