Seasoned Mortgages
Options for Maximizing Profitability
Restructure your balance sheet, adjust your loan-to-deposit ratios or manage your mortgage pipeline more effectively by selling seasoned mortgages to Freddie Mac. You can sell seasoned fixed-rate mortgages, ARMs and other products to Freddie Mac through our eligible cash or Guarantor executions. Seasoned mortgages are loans with Note Dates of more than 12 months before the delivery date, if sold through MIDANET®, or the Freddie Mac settlement date if sold through the selling system.
In addition, we have a unique definition for Seasoned Mortgages for Newly Constructed Homes. Seasoned Mortgages for Newly Constructed Homes are those with a Settlement Date more than 18 months after the oldest date of the borrower’s credit, capacity or collateral documentation.
Under our Single-Family Seller/Servicer Guide (Guide) requirements, you can sell up to $10 million of seasoned mortgages in any calendar year, including seasoned 40-year fixed-rate mortgages, seasoned investment property mortgages and mortgages that at the time of origination exceeded our loan limits, but are now eligible for sale based on current loan limits. Larger volumes of seasoned mortgages are eligible for sale on a negotiated basis. In addition, you'll want to be familiar with our special requirements for construction to permanent mortgages, Seller-owned Modified Mortgages, Seller-owned Converted Mortgages and mortgages originated using the New York Consolidation, Extension and Modification Agreement (NY CEMA).
Product Features
We are revising our requirements for Seasoned Mortgages effective for Freddie Mac settlements on and after January 2, 2009. Please refer to our October 17 Single-Family Seller/Servicer Guide Bulletin [PDF
183K ] for more information.
| Feature |
Requirements |
| Property Type |
- 1- to 4-unit primary residences
- 1- to 4-unit investment properties
- 1-unit second homes
|
| Eligible Mortgage Products |
Conventional mortgages eligible for purchase through our Guide are generally eligible for purchase as seasoned mortgages, except:
- A-minus Mortgages
- Balloon/Reset Mortgages
- All CMT- and LIBOR-indexed ARMs sold through our ARM Cash and WAC ARM Cash sale paths
- Mortgages originated using the Loan Prospector® Property Inspection Alternative or Form 2070
- Mortgages delivered through the MultiLender Swap execution
- Home Possible® Mortgages
- Initial Interest® Mortgages
- Mortgages secured by Manufactured Homes
|
| Borrower Eligibility |
- Minimum Indicator Score of 680 for 1- to 4-unit primary residences or 1-unit second homes
- Minimum Indicator Score of 720 for 1- to 4-unit investment properties.
*Credit scores used to determine the Indicator Score must not be more than 120 days old as of the MIDANET delivery date or selling system settlement date |
| Maximum LTV Ratios (without secondary financing) |
|
| Eligibility/Underwriting |
- Underwriting requirements must have been met as of the Note Date.
- Borrower payment history may not have any late payments exceeding 30 days during the 12 months prior to the MIDANET delivery date or selling system settlement date, as applicable.
- Current LTV ratio is not greater than the maximum LTV ratio permitted under the Guide on the MIDANET delivery date or selling system settlement date, as applicable.
- For a mortgage that had an LTV ratio greater than 80% on the Note Date and has a current LTV ratio greater than 80%, the required level of mortgage insurance will be determined by the mortgage insurance coverage requirements in the Guide as the of Note Date. You are not required to increase existing mortgage insurance coverage if our minimum coverage amounts have changed.
|
| Execution Options |
- Mandatory, Servicing-retained Fixed-rate Cash
- Fixed-rate Guarantor
- WAC ARM Guarantor
|
| Delivery Fees |
- A seasoned mortgage postsettlement delivery fee applies and is based on length of seasoning.
- Additional delivery fees may be assessed based on specific loan attributes.
- See Exhibit 19 [PDF 183K] for details on Guide applicable fees.
|
| Special Delivery Requirements |
- Seller-owned Modified Mortgages and Seller-Owned Converted Mortgages will be considered seasoned mortgages if the modification/conversion date is more than 12 months prior to the MIDANET delivery date or selling system settlement date, as applicable.
- Refinance mortgages secured by property located in New York state documented using the New York Consolidation, Extension and Modification Agreement (NY CEMA) will be considered seasoned mortgages if the most recent NY CEMA date is more than 12 months prior to the MIDANET delivery date or selling system settlement date, as applicable.
- Mortgages for Newly Constructed Homes will be considered seasoned if the Delivery Date, if sold through MIDANET, or the Settlement Date if sold through the selling system, occurs more than 18 months after the oldest date a borrower’s credit, capacity or collateral has been documented.
- Mortgages for Newly Constructed Homes where the terms of the permanent financing have been changed or the mortgage product has changed or if an adjustable rate mortgage, has been converted to a fixed rate after the effective date of permanent financing are not Seasoned Mortgages for Newly Constructed Homes; these mortgages may be a standard Seasoned Mortgage as defined in the Guide glossary and described in Chapter 36.
|
| Single-Family Seller/Servicer Guide |
- Refer to Guide Chapter 36
|
Download a Seasoned Mortgages [PDF 75K] fact sheet for more details.
Lender Benefits
More options and increased flexibility to sell seasoned mortgages to Freddie Mac offers you:
- Many execution options to address different business needs.
- Maximum profitability through better management of your retained portfolio.
- More liquidity as you seek more funds to lend for home financing.
- Additional ways to restructure balance sheet assets more strategically and address loan-to-deposit or loan-to-share challenges.
For More Information
Training Opportunities
Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.
The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.
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