Freddie Mac Seller/Servicer Guide 8502.3: Negative Amortization
Negative Amortization results whenever the amount of monthly interest calculated at the Note rate exceeds the Borrower’s scheduled monthly interest payment to the Servicer.
Freddie Mac publishes the full text of this section: Freddie Mac Seller/Servicer Guide 8502.3 on the Freddie Mac website. Zeitro Strata answers questions about it with the passage and page cited.
Guideline text quoted as published by the agency. The latest published version governs. This is not an underwriting decision.