Best Efforts Contracts FAQ
This information is not a replacement or substitute for the requirements in the Freddie Mac Single-Family Seller/Servicer Guide and other Purchase Documents.
Best Efforts Contracts
Freddie Mac offers Sellers the option to take out a best efforts contract for eligible mortgage products. Refer to these FAQs to help guide you as you prepare to sell your loans for cash.
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How does a best efforts contract differ from a mandatory cash contract?
A best efforts contract is a contract for the sale of a specified mortgage with respect to which the Seller's obligation to deliver the Mortgage becomes mandatory only when and if the mortgage is closed and funded. You will not be assessed a pairoff fee for non-delivery. Bulk contracts and loan substitutions are not permitted.
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What is the minimum amount for a best efforts contract?
The minimum amount for an individual best efforts contract is $1,000.
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How are best efforts contracts priced?
Pricing is available in Loan Selling Advisor each business day and is based on prices Freddie Mac expects to receive in the securities market. In addition, best efforts pricing is affected by seller pull-through performance relative to aggregate pull-through performance in the best efforts program and pull-through rate over time can affect individual best efforts pricing. The price also reflects the mortgage note rate, original loan balance (if applicable), the minimum contract servicing spread, the delivery period and the cost that Freddie Mac incurs for managing interest rate risk on your behalf.
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What is the purchase contract effective period?
The purchase contract effective period is the period of time during which a price for eligible mortgages provided to you by Loan Selling Advisor remains in effect. You may select a purchase contract effective period from two to 90 days.
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Can I extend a best efforts contract?
Yes. You may extend the best efforts contract in Loan Selling Advisor at any time on or prior to the contract expiration date.
You may extend the contract as many times as needed, as long as the total extension period plus the original contract term does not exceed 120 days and each extension is less than 90 days beyond the current date. You will be assessed a fee for the contract extension.
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Do extension days include weekends or holidays?
Yes. Weekends and holidays are included, but if the new expiration date falls on a weekend or holiday, it will move to the next business day.
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Can I relock a best efforts contract?
No. Best Efforts contract relock is retired effective 10/28/2024.
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How will I be billed for extending a best efforts contract?
Fees will be assessed in your monthly billing statement.
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What are the hours of operation for executing relocks and extensions in Loan Selling Advisor?
Relocks are retired effective 10/28/2024. Extensions can be executed in Loan Selling Advisor 24/7, subject to system availability.