Naa Awaa Tagoe, deputy director of the division of housing mission and goals at the FHFA, explained that through the pilot program, instead of repurchasing defective but performing loans within the first 36 months of origination, lenders pay a fee based on the defect rate of their performing loan deliveries to Freddie Mac on that quarter's aggregate loan balance.
Freddie Mac said the extension will begin in the first quarter of 2025. It added that, due to the expansion, lenders will no longer be subject to repurchases on most performing loans.
Today's announcements are part of making good on our commitment to be part of the solution and build upon the progress we have already made with lenders and industry partners over the past year.
Lenders will have the option to opt in or out of the fee-based structure annually. If they opt out, Freddie Mac is also adding a fee-only option, for which the fee is only charged on the defective loan as an alternative to repurchasing the loan.
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