Fannie Mae and Freddie Mac Tuesday morning unveiled new representation and warranty policies that relieve seller/servicers of any repurchase risk if the borrowers make 36 months of consecutive on-time payments.
However, the new guidelines only affect mortgages sold to the GSEs after December 31 of this year.
The R&W policies, shepherded by the Federal Housing Finance Agency, provide greater relief on Home Affordable Refinancing Program loans going forward.
HARP refinancings will be “eligible for rep and warranty relief after an acceptable payment history of only 12 months following the acquisition date,” FHFA says in a statement.
But the new policy will not affect any outstanding buyback demands against originators.
“It is important to note that we are not modifying the representations and warranties currently required,” FHFA said.
On Tuesday night National Mortgage News
FHFA acting director Edward DeMarco gave an outline of the changes in a speech before the American Mortgage Conference in Raleigh, N.C.
