FHFA Announces Rep & Warranty Changes
September 11, 2012
On September 11, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (GSEs) will implement a new representation and warranty framework for conventional loans sold or delivered on or after January 1, 2013. The new framework is intended to clarify lenders’ repurchase exposure and liability on future deliveries. Under the new framework, (i) lenders will be relieved of certain repurchase obligations that meet specific payment requirements; (ii) Home Affordable Refinance Program (HARP) loans will be eligible for rep and warranty relief after an acceptable payment history of 12 months following the acquisition date; (iii) information about exclusions for rep and warranty relief, such as violations of state, federal, and local laws and regulations will be detailed; and (iv) the GSEs will continue to make available for lenders a range of tools to help improve loan quality.
FHFA Press Release, which includes an FAQ on the new framework