• The maximum allowable foreclosure attorney fees have been updated in all jurisdictions except Maine, New Hampshire, Washington (foreclosures for e-Notes only), Hawaii, Iowa (non-judicial foreclosures), and South Dakota
• The maximum allowable bankruptcy attorney fees have been updated for Motion for Relief for Chapter 7, 11, 12, and 13 cases; Proof of Claim Preparation and Plan Review for Chapter 11, 12, and 13 cases; Objection to Plan for Chapter 12 and 13 cases; and  Response to Final Cure Payment Notice for Chapter 13 cases

Updated Servicing Guide Exhibits 

▪ Allowable Foreclosure Attorney Fees

▪ Allowable Bankruptcy Attorney Fees

Effective Date 

The allowable fee updates are effective as follows: 

▪ The new allowable foreclosure fees apply to all matters referred to counsel for initiation of foreclosure proceedings, regardless of referral date, if the matter is still active as of September 11, 2019. Servicers are encouraged to implement the new fees for the impacted states immediately, but must do so no later than December 1, 2019. 

▪ The new allowable bankruptcy fees apply to all legal services performed on or after December 1, 2019. 

Currently, servicers must notify us when they learn after the foreclosure sale date that a borrower has filed for bankruptcy. In response to servicers’ feedback and to resolve confusion, we have created the Bankruptcy Notification Template to clarify the information that servicers must provide to us in connection with bankruptcy filings identified after the foreclosure sale date. 

Updated Servicing Guide Topics 

▪ E-2.3-07, Responding to Bankruptcies Identified After Foreclosure Sale

▪ F-4-01, References to Fannie Mae’s Website

▪ F-4-03, List of Contacts 

Effective Date 

Servicers are encouraged to use the template immediately, but must do so by December 1, 2019.

Originally announced in Bulletin 2019-09

• We are adding a new requirement to specify that the Seller must disclose to the Borrower any information that the Seller is aware of that may adversely affect the market value, condition or marketability of the subject property 
• This includes, but is not limited to, the presence of any Contaminated Site, Hazardous Substance or other adverse conditions affecting the subject property or neighborhood

Revised in  Bulletin 2019-20

• Revised the Guide to provide greater specificity regarding information that must be disclosed to the Borrower 
• For purchase transactions, Sellers must disclose information regarding environmental hazards that directly impact the subject property and have not been mitigated or remediated, if the Seller obtained such knowledge prior to the Note Date

Guide impact: Section 5601.3

R162-2c-204. License Renewal Reinstatement and Reapplication

• (3) Education requirements for renewal, reinstatement, and reapplication.
• (a) License renewal. 
• (i) Except as provided in this Subsection (3)(a)(ii), an individual who holds an active license as of January 1 of the calendar year shall complete, within the calendar year in which the individual's license is scheduled to expire, the following courses, none of which may be duplicative of courses taken in the same or preceding renewal period:
  
  
  • (A) a division-approved course on Utah law, completed annually; and 
  • (B) eight hours of continuing education approved through the nationwide database, as follows: 
    • (I) three hours federal laws and regulations; 
    • (II) two hours ethics (fraud, consumer protection, fair lending issues); 
    • (III) two hours training related to lending standards for non-traditional mortgage products; and 
    • (IV) one hour undefined instruction on mortgage origination. 
  • (C) In addition to other required continuing education, a mortgage loan originator licensed with the State of Utah on or after May 8, 2017, shall complete a division-approved continuing education course for new loan originators prior to renewing at the end of the first full calendar year of licensure. 
• (ii) An individual who completes the mortgage loan originator national pre-licensing education between January 1 and December 31 of the calendar year is exempt from continuing education, including the division-approved courses for new loan originators and on Utah law specified in Subsections (3)(a)(i)(A) and (3)(a)(i)(C), for the renewal period ending December 31 of the same calendar year.

• NCUA's general lending rule, § 701.21(c)(7)(iv), adds a PALs II rule that grants additional flexibility to offer members meaningful alternatives to traditional payday loans while maintaining many of the key structural safeguards of the PALs I rule
• All other requirements of the PALs I rule will continue to apply to PALs II loans including the prohibition against rollovers, the limitation on the number of PALs loans that an FCU can make to a single borrower in a given period, and the requirement that each PALs II loan fully amortize over the life of the loan
• Maximum loan amount of $2,000
• Loan term of at least 1 month with a maximum loan maturity of 12 months
• May make such a loan immediately upon the borrower establishing membership in the credit union
• May only offer one type of PALs loan to a member at any given time
• Prohibits charging of any overdraft or non-sufficient funds (NSF) fees in connection with any PALs II loan payment drawn against a borrower's account; includes overdraft fees or NSF fees that could be assessed against the borrower for paying items presented for payment after the PALs II loan payment creates a negative balance in the borrower's account

• On October 4, 2019, we issued Bulletin Master Terms 19-01. This Bulletin amended and restated the SSA Master Terms and Conditions that are posted on our website. 
• We have updated the version of the SSA Master Terms and Conditions that is in the Guide to align with the changes in the Bulletin. (See the Mortgagee Letter changes made to the SSA.)

• As part of Fannie Mae’s ongoing effort to streamline reporting applications, lender reports have gradually transitioned from the Message Manager As-Is application to Fannie Mae Connect™. 
• The transition is complete, and Message Manager As-Is will be retired on December 22, 2019. 
• With this update, we have replaced references to Message Manager with Fannie Mae Connect. (See the Mortgagee Letter Attachment for the list of impact topics.)

• Until recently, when lenders had changes to housing goals data on loans submitted through Loan Delivery, corrections had to be submitted through the Additional Data Elements (ADE) application. 
• Based on customer feedback, we improved the process for submitting corrections and announced the retirement of the ADE application earlier this year. 
• With this update, we replaced references to ADE with the new process for submitting corrections. (See the Attachment for the list of impact topics.) 

• Assignments of mortgages generally are not recordable in Puerto Rico. 
• We have removed the requirement for assignments of mortgages for loans in Puerto Rico from the Selling Guide. 
• Endorsements on the note must evidence ownership of the debt and reflect any transfer of interest in the property.

• Manufactured homes are often first titled as personal property, but they must be titled as real property for lenders to deliver the mortgage us. 
• The process for titling as real property varies by state, and the variety of approaches is particularly complex and challenging for lenders originating manufactured home loans in more than one state. 
• To assist lenders in originating manufactured homes in various states, we have published information on titling them as real property: Titling Requirements for Manufactured Homes. 
• This information does not constitute legal advice; lenders must consult their own legal counsel. 

Effective Date 

This information is available for immediate use. We will add titling information for additional states throughout 2020.

• Selling Guide B3-4.3-14, Bridge/Swing Loans permits a bridge loan (also referred to as a “swing” loan) to be an acceptable source of funds provided certain requirements are met. 
• We have updated B3-6-05 to describe when a bridge loan must be included (and when it can be excluded) from monthly debt obligations and the DTI ratio based on the existing policy in B3-4.3-14. We have not changed any of the existing requirements. 

Rental Income

• Updating format and placement of certain charts to better reflect requirement differences for rental income from property acquired or placed in service in the current calendar year versus rental income from property owned in the prior calendar year

• Specifying that non-cash add backs, such as amortization, may be included in calculating net rental income (when applicable); Form 92 has been revised to reflect this update

Verification of employment

Revising our requirements to allow Sellers to use a Leave and Earnings Statement (LES) dated no more than 120 days prior to the Note Date to verify the Borrower's employment as part of the 10-day pre-closing verification (10-day PCV). 

Credit Reports

Updating requirements to specify that when a borrower has frozen credit, no more than one national credit repository can have frozen credit information.

eMORTGAGES

To provide a one-stop shop for custodial needs with the benefits of the automated certification process to Seller/Servicers, we are providing our automated certification logic to third-party eNote custodians and building system-to-system integrations with them.

Interested third-party custodians should contact the Freddie Mac eMortgage team at eMortgage_Team@freddiemac.com to discuss the approval requirements and process.

Sellers approved to participate in Cash-Released XChange may now deliver eMortgages through that program if their Purchase Documents include the eMortgage negotiated term of business.

Taxpayer First Act - use of tax return information

Adding language to the Guide requiring that, if a signed consent form is required under the Act, a signed copy must be maintained in the Mortgage file. 

CreditSmart® - Steps to Homeownership Tutorial rebranding

The CreditSmart® - Steps to Homeownership tutorial, focused on consumer education and financial literacy will be relaunched with the name CreditSmart® Homebuyer U effective December 31, 2019.

Addition of Secured Party and Secured Party Delegatee fields

On November 18, 2019, MERS® introduced two additional MERS eRegistry authorized rights holder fields titled “Secured Party” and “Secured Party Delegatee” (as defined in Section 1402.2) for eNotes. The Secured Party field is meant for the use of any stakeholder (such as a Warehouse Lender) that has a security interest in an eMortgage but does not want to be named in the Controller field. The Secured Party Delegatee field allows a Secured Party to authorize another participant to take certain actions on its behalf with respect to any eNote.

Section 1402.16 has been updated to reflect operational process changes as a result of these MERS enhancements.

Eligibility of eMortgages through Cash-Released XChangeSM

As announced on October 21, 2019, Sellers approved to participate in Cash-Released XChange may now deliver eMortgages through that program if their Purchase Documents include the eMortgage negotiated term of business.

We are updating the Guide to reflect the eligibility of eMortgages and to add specific document custody requirements for these Mortgages. For deliveries and Transfers of Servicing of eMortgages sold through Cash-Released XChange, Seller/Servicers must use Freddie Mac as the eNote custodian; for all other Mortgages, Sellers selling through Cash-Released XChange and Servicers participating in that process must use The Bank of New York Mellon Trust Company, N.A. (BNYM) as the Document Custodian.

Post-Fund Data Correction Tool

On December 9, 2019, Freddie Mac is launching the Servicing Gateway, an all-in-one portal that will provide access to nearly all Freddie Mac Servicing Tools. One of the tools available in Servicing Gateway will be the Post-Fund Data Correction tool, a web-based application that allows a Seller/Servicer to electronically submit data correction requests related to Mortgage data submitted by a Seller into Loan Selling Advisor®.

An individual who is a registered loan originator will have temporary authority to act as a mortgage loan originator for a specified period without first obtaining a mortgage loan originator license, if all of the following apply:

• The individual becomes employed by an entity that is licensed or registered under the mortgage brokers, lenders and servicing licensing act, the secondary mortgage loan act, or the consumer financial services act;
• The individual has not had an application for a mortgage loan originator license denied or a mortgage loan originator license revoked or suspended in any state;
• The individual has not been subject to, or served with, a cease and desist order in Michigan or any other state;
• The individual has not been convicted or, or pled guilty or no contest to, a misdemeanor or felony that would preclude licensure;
• The individual has submitted a mortgage loan originator license application and the required fee, and has met the applicable surety bond requirements;
• The individual was registered in the NMLS as a mortgage loan originator during the 1-year period immediately preceding the date on which the information required for licensure is submitted;
• The individual is not subject to a prohibition order issued by the director of the Department of Financial Institutions (“director”),

An individual who is licensed as a mortgage loan originator in another state will have temporary authority to act as a mortgage loan originator in Michigan without first obtaining a license if all of the following apply:

• The individual meets the licensing requirements set by the department;
• The individual was licensed in another state during the 30-day period immediately preceding the date when the Michigan license application was submitted;

The period of temporary authority begins on the date when the license application is submitted, the required fee is paid, and the applicable surety bond provisions have been met, and ends on the earliest of the following dates:

• The date when the individual withdraws the application;
• The date when the director denies, or issues a notice of intent to deny, the application;
• The date when the director approves the application;
• The date that is 120 days from the date when the individual submits the application, if the application is listed on the NMLS as incomplete.

A person employing an individual who has temporary authority to act as a mortgage loan originator is subject to the applicable laws to the same extent as if the individual is licensed as a mortgage loan originator.

An individual with temporary authority to act as a mortgage loan originator in Michigan and who engages in residential mortgage loan origination activities is subject to all applicable laws to the same extent as if that individual is licensed as a mortgage loan originator.

• The Selling Guide currently permits lenders to omit debts identified as non-applicant accounts from Desktop Underwriter® (DU®) and exclude them from the borrower’s DTI ratio when supporting documentation is provided.
• With the December 2019 updates to DU, a corresponding message identifying potential non-applicant accounts will be retired. 
• We have updated the Guide to consolidate the non-applicant accounts policy in a single topic that applies to both DU and manually underwritten loans, and to clarify that lenders may continue to apply the policy to exclude non-applicant accounts after the retirement of the DU message.

Effective Date 

These changes will apply to loan casefiles submitted or resubmitted to DU on or after the weekend of December 7, 2019. For manually underwritten loan applications, the clarifications apply immediately.

Effective Date 

The updated requirements will apply to all loan casefiles submitted to DU on or after the weekend of December 7, 2019, and for manually underwritten loans with application dates on or after December 7, 2019.

• Implementing new requirements for determining when rental income can be used for qualifying purposes
• For the purchase of a two- to four-unit principal residence or one- to four-unit investment property, please see the chart provided in the Announcement
• This policy does not apply to HomeReady loans with rental income from an accessory unit

Effective Date

The updated requirements will apply to new loan casefiles submitted to Desktop Underwriter® (DU®) on or after the weekend of December 7, 2019. For manually underwritten HomeReady loans, the updates are required for new loan applications dated on or after December 7, 2019.

Requirement

At least one borrower must complete homebuyer education for the following transactions: 

• if all borrowers on the loan are relying solely on nontraditional credit to qualify, regardless of the loan product or whether the borrowers are first-time home buyers (no change to current requirement); 
• HomeReady purchase transactions when all occupying borrowers are first-time homebuyers, regardless of the LTV ratio; or 
• purchase transactions with LTV, CLTV, or HCLTV ratios greater than 95% when all borrowers are first-time homebuyers. 

Beginning October 23, 2019, Fannie Mae will waive the fee for the Framework Homeownership, LLC (Framework®) course for lenders, removing the cost burden for borrowers.

In response to Servicer feedback, we are extending the implementation of Servicing Gateway and the mandatory adoption of the Servicing Data Corrections tool from November 25, 2019 to December 9, 2019. This delay will allow Servicers to process their November 2019 end of month loan level reporting without interruption. The Guide updates announced in Bulletin 2019-19 with effective dates of November 25, 2019 will now become effective on December 9, 2019. Servicers still may continue to adopt the Servicing Data Corrections tool prior to the mandatory effective date if they are operationally ready to do so.

Beginning December 9, 2019, you’ll be able to:

• Modify the selected master commitment for mandatory cash contracts, without pair-offs: In most cases, you’ll no longer need to contact Freddie Mac for assistance or pay a pair-off fee when modifying the master commitment (pricing identifier) on cash contracts, offering greater convenience and cost savings. Instead, modify the selected master commitment for a cash contract directly on the Cash Contract Details screen in Loan Selling Advisor via the new “Modify Mandatory Contract” link.
  Keep in mind:

• No prior action may have been taken on the contract. It must be in ‘accept’ status with no loans allocated, and the contract must not have had any extensions or pair-offs.
• Modifications to the master commitment amounts are reflected immediately. When you modify the selected master commitment for a cash contract, the original master commitment on the contract will be immediately credited with the original contract amount, and the new master commitment will be debited with the new contract amount.
• Remove loans easily from a cash contract: Quickly locate the loans you wish to remove from a cash contract using a new search function located on the Remove Loans – Summary of Contract Terms screen. Search and filter by loan number, borrower last name, interest rate, loan status, or warehouse lender. No more extra scrolling to find the loans you want to remove.
• Have better visibility into our cash product offerings: We’re removing previously retired cash products from Loan Selling Advisor, so you’ll see a cleaner layout on the Request Rate Sheet screens.
• View the correspondent Seller Number on the Aggregator Pipeline screen: The Seller Number will display next to the Seller name on the drop-down list on the Aggregator Pipeline Transfer Status Search screen, providing greater certainty and ease of navigation.
• An updated link for Enhanced Relief Refinance Mortgages: The text on the hyperlink to view the Cash Adjustor for Freddie Mac Relief Refinance Mortgages will be changed from “High LTV Relief Refinance Mortgages” to “Enhanced Relief Refinance Mortgages.” This hyperlink is located on the Take Out Contract, Freddie Mac Price Sheet, and Rate Sheet Results print preview screens.

In addition, we have made non-substantive minor formatting changes to Form 996E -Warehouse Provider Release and Transfer. The Single-Family Seller/Servicer Guide (Guide) will be updated with the sample Form 996E in a future Bulletin. 

• To help reduce the number of deficient monthly mortgage loan payments that need to be returned to borrowers, we are introducing a $50 payment shortage tolerance in Servicing Guide C-1.1-02, Processing Payment Shortages or Funds Received 
• When a Mortgage Loan Modification Is Pending. The servicer is now authorized to accept a payment that is deficient by $50 or less for up to three monthly payments during a 12-month period.

• Amends rule to clarify advertising requirements of mortgage loan originators and
  companies

The Limited 203(k) section of SF Handbook 4000.1 is amended to increase the current maximum total rehabilitation costs from $35,000 to $50,000 for the first 15,000 mortgages endorsed each calendar year in QOZs only. 

Utah has adopted a rule outlining technical and procedural guidance for remote notarization that are effective immediately.

• Section 1 of the bill sets forth the Act’s title: “Zombie Property Remediation Act of 2019”.
• Section 2 adds a new section 1392 of the real property actions and proceedings law which authorizes local governments to commence judicial proceedings in courts of competent jurisdiction to compel mortgagees to either complete mortgage foreclosure actions or to issue certificates of discharge for the mortgage for properties that have been certified as abandoned pursuant to real property actions and proceedings law section 1971.

• The Taxpayer First Act was signed into law on July 1st
• Must be implemented within 180 days of the Act being signed
• Included within the law in Section 2202 of the Act is a provision that the taxpayer must provide their express permission for their tax information to be shared
• It is unlikely that the IRS will modify the Tax Transcript Request Form (4506T) to accommodate this requirement, at least in the short-term 
• As the IRS has expressed that they are not going to provide updated language to the 4506-T, they are leaving it to the industry to ensure proper taxpayer consent is obtained

See MISMO article for complete details.

• Provides Authority to Perform Electronic Notarization
• Defines Notary Registration Requirements
• Defines Tamper Evident Technology Requirements
• Defines Electronic Seal Requirements
• Defines Security of Electronic Signatures and Electronic Seals Requirements
• Defines Journal Requirements
• Defines Requirements for Authenticating the Notarial Act

• The adopted regulations establish provisions governing electronic or remote notarizations 
• Prohibits a person from representing himself or herself as an electronic
  notary public if the person has not registered with the Secretary of State as an electronic notary public
• Establishes registration and qualification requirements
• The registration of a person as an electronic notary becomes effective at the time the Secretary of State updates the processing system maintained by the Secretary of State to indicate such a registration