Freddie Mac Multifamily, a division of Freddie Mac (OTCQB: FMCC), recently revealed updates to their policies and procedures aimed at enhancing underwriting thoroughness, strengthening fraud detection and prevention, and addressing various other risks. Starting April 18, these updates will introduce stricter property inspection protocols and expanded due diligence measures, among other improvements.
Ian Ouwerkerk, Senior Vice President of Multifamily Underwriting & Credit at Freddie Mac, emphasized the company’s commitment to risk management. “Our focus on enhancing our processes to more effectively detect and prevent fraud and misrepresentation is paramount,” he stated. “These new measures signify our ongoing dedication to risk management and operational excellence.”
Key changes, which will be incorporated into Freddie Mac’s Multifamily Seller/Servicer Guide effective April 18, include:
- Enhanced property inspection criteria, requiring more unit inspections and larger lease audit samples, along with additional documentation to verify tenant rent payments.
- Strengthened “Know Your Customer” protocols that demand more rigorous due diligence for new borrowers and those with limited experience in multifamily projects, as well as further verification of borrowers’ liquidity and real estate assets.
- Adjusted dealings with certain title companies as needed.
- More stringent appraisal review standards and requirements for appraiser independence to ensure appraisers’ objectivity and impartiality are maintained.
These April updates build on previous enhancements announced in November 2023, which aimed to clarify the documentation chain of custody in multifamily loan transactions from borrower to lender.
For more information, read the original press release from: https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-multifamily-enhances-policies-strengthen-due