Changes are being made to the approval requirements for subsidiaries of some Federal Home Loan Mortgage Corp. seller-servicers.
Freddie Mac’s current glossary definition for seller-servicers that are federally regulated depository institutions says that wholly owned subsidiaries don’t need to obtain a separate approval.
But that glossary definition for such seller-servicers is going to change, according to the McLean, Va.-based government-sponsored enterprise.
In Bulletin 2014-15, Freddie said it is removing language from the glossary definition that states such subsidiaries don’t need a separate approval in order to act in the capacity of a seller or servicer.
That means that all entities acting as a Freddie Mac seller or servicer, including wholly owned subsidiaries of seller-servicers that are federally-regulated depository institutions, must obtain a separate approval to act as a seller or servicer.
The subsidiaries must submit applications to become seller-servicers by Oct. 15 in order to comply with the updated requirement.
However, the secondary lender is waiving application fees for such entities as long as the submission deadline is met.
Freddie said it is expanding its seller-servicer operational review and updating its Guide Form 16SF, Annual Eligibility Certification Report, to include questions on seller-servicers’ use of subsidiaries and affiliates.
Information about applying to become an approved seller-servicer is online at www.freddiemac.com/singlefamily/doingbusiness.
