New Loan Closing Advisor Qualified Mortgage Rule-related Critical Feedback Messages

Effective April 13, 2022, we’re updating Loan Closing Advisor® to notify clients of loans that exceed the allowable points and fees percent as indicated in Freddie Mac Single-Family Seller/Servicer Guide (Guide) Section 4202.6(c). These changes are intended to ensure, based on Seller-provided data and related representation and warranties, that all loans purchased by Freddie Mac meet the Guide’s points and fees requirements applicable to both Exempt Mortgages and Ability to Repay (ATR) Covered Mortgages subject to the Revised General Qualified Mortgage (QM) Rule. The updates include:

  • Adding six new critical edits and messages to notify clients that the data submitted to Loan Closing Advisor in the Uniform Closing Dataset (UCD) XML file indicates that the loan’s points and fees exceed the allowable Regulation Z Total Points and Fees. These loans will receive a “Not Successful” status and will not be eligible for sale to Freddie Mac.
  • Removing warning messages CRE202 and CRE203 that indicate calculated Regulation Z Total Points and Fees Amount as a percentage of the Regulation Z Total Loan Amount is greater than the applicable 3 percentage or 5 percentage threshold and do not meet Freddie Mac requirements. These warning messages are being replaced by the new critical messages.

Please review the Loan Closing Advisor April 13 Release Notes for more details.

If a submission to Loan Closing Advisor generates a critical edit related to Regulation Z Total Points and Fees, clients should review the UCD XML data for accuracy. If a client determines data in the UCD XML file is inaccurate or inconsistent with the information contained on the final Closing Disclosure (CD), the client should correct the UCD XML file and resubmit it to Loan Closing Advisor. If the data in the UCD XML file accurately reflects the transaction, the loan does not comply with Freddie Mac requirements and is not eligible for sale.

The edit to determine compliance with Freddie Mac requirements for Regulation Z Total Points and Fees percentage will be transferred from Loan Closing Advisor to Loan Selling Advisor® in the near future. Clients should continue their due diligence and review the data prior to submission to ensure its accuracy.

Customer Test Environment

These updates will also be available in the Loan Closing Advisor customer test environment (CTE) on April 13, 2022 at 12:01 AM EDT.

Update to Loan Closing Advisor March 31, 2022 Release Notes

The UCD Critical Edits Phase 2 successfully transitioned from warning to critical in Loan Closing Advisor on March 31, 2022.

The Loan Closing Advisor March 31 Release Notes communicated that the Phase 1 critical edit, CRIT0040, requiring the Total Payoffs and Payments Amount for the model Closing Disclosure (CD) was being corrected to apply only to refinance loans. On April 1, 2022, the UCD edit and message were reverted to DQC629 which requires the Total Payoffs and Payments Amount for the model CD, regardless of transaction. This update was made to provide more time for clients to implement the changes in their business processes.

Please review the revised Loan Closing Advisor March 31 Release Notes and updated Loan Closing Advisor Payoffs and Payments Warning Messages job aid.

For more information on the UCD critical edits transition, visit the Freddie Mac UCD web page. Please contact your account representative for assistance or submit your questions to our UCD mailbox: [email protected]