Fannie Mae and Freddie Mac released new representations and warranty guidelines for lenders Tuesday to clarify lenders’ risk regarding repurchase claims and define steps lenders can take to challenge repurchase claims they feel are without grounds.

Under the new guidelines, if a loan is current for 36 consecutive months, lenders “will be relieved of certain repurchase obligations,” according to the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac.

Loans created under the Home Affordable Refinance Program (HARP) also avoid certain rep and warranty risk after 12 months of “acceptable payment history.”

Additionally, to avoid further losses to Fannie Mae, Freddie Mac, and taxpayers, the FHFA is

directing the GSEs to review loan quality earlier than they have at times in the past – between 30 and 120 days of purchase.

Lenders also have new timeline requirements for submitting loan files for review by the GSEs.

“Ultimately, better quality loan originations and underwriting, along with consistent quality control, help maintain liquidity in the mortgage market while protecting Fannie Mae and Freddie Mac from loans not underwritten to prescribed standards,” said FHFA Acting Director Edward DeMarco.

President of the Mortgage Bankers Association, David H. Stevens, expressed his support Tuesday following the announcement. The new rep and warranty framework helps bring more certainty for lenders as they attempt to offer affordable mortgage credit to more qualified borrowers and advance the housing recovery,” he said.

“We have been working with Acting Director DeMarco on this very issue for several years, and the plan outlined today should give lenders the confidence they need to help more qualified borrowers,” Stevens continued.

The changes will apply to all loans sold or delivered to the GSEs starting in the new year.

“Addressing selling representations and warranties now is a natural next step in addressing FHFA“s strategic plan for conservatorships and Fannie Mae and Freddie Mac business goals,” the FHFA stated Tuesday.