We were recently informed by Equifax® Inc. of a coding issue that may have resulted in errors to consumer credit scores and credit data reported by Equifax from March 17 to April 6, 2022. We were informed that this error may have impacted approximately 12% of credit reports issued during this period. Any lender that received credit report data directly from Equifax online or via a third-party consumer reporting agency/reseller over this period may be affected by this incident.

Sellers are reminded of their obligations under the Freddie Mac Single-Family Seller/Servicer Guide (Guide) to ensure the accuracy of the credit data submitted to Loan Product Advisor® (LPASM) and delivered to Freddie Mac at the time of sale, and to provide any corrected information to Freddie Mac.

In light of this issue, Sellers should consult with their counsel in reference to updating credit reports. Sellers should also work with their consumer credit report provider and Equifax to identify the potential impacts of the coding issue on their originations and direct questions about the coding issue or its impacts to them.

The relevant provisions of the Guide are set out below:

Accuracy of the delivered information

As stated in Guide Section 1301.1 and Section 6301.7, the Seller warrants that all data and/or other information submitted to Freddie Mac is true, complete and accurate.

Accuracy of information submitted in LPA

Because LPA is an automated system, it relies heavily on information from other sources. Consequently, accurate data is critical. The risk class and documentation level on the last feedback certificate must be based on submission of accurate data to LPA.  Therefore, for applications in process, the credit reports impacted by the coding error must be updated and the mortgage must be resubmitted to LPA in accordance with Guide Section 5101.6. If the mortgage cannot be resubmitted to LPA for any reason, it must be manually underwritten and is considered a non-LPA mortgage.

Reporting requirement and data correction

The Seller is also reminded that if they become aware of findings that affect the eligibility of a mortgage sold to Freddie Mac, the Seller must notify Freddie Mac Quality Control at [email protected]. This includes a life-of-loan representation and warranty on data inaccuracies. Guide Section 3402.10 outlines the requirements for self-reporting adverse findings.

The Seller must use the Freddie Mac Post-Fund Data Correction (PFDC) process to correct the delivered credit score for a borrower impacted by the Equifax coding error.

We will continue to monitor this situation and may issue additional guidance as we learn more about the impact of the Equifax coding issue to the consumer credit scores.

Please contact your Freddie Mac account representative or the Customer Support Contact Center (800-FREDDIE) with questions.