Compliance Calendar

Search for current regulatory changes & updates from Fannie, Freddie, FHA, VA, and USDA.

Compliance Calendar for March 2019

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Fannie Mae Selling Guide Updates

Effective: March 1, 2019
Industry: Mortgage Lending
Source: Fannie Mae   SEL-2018-09 →
Tags: Underwriting, Insurance
View Details

Small Business Administration Loans (May implement immediately; must implement by March 2019)

  • We are clarifying that all Small Business Administration (SBA) loans secured by the subject property must be treated as subordinate financing and included in the calculation of the CLTV and HCLTV ratios. 
  • The monthly payment of the subordinate lien must also be included in the borrower’s DTI ratio calculation unless the lender can satisfy the requirements in Business Debt in Borrower’s Name in B3-6-05, Monthly Debt Obligations.

Flood Insurance (May implement immediately; must implement by March 1, 2019)

  • In our continued efforts to simplify and consolidate policies shared by the Selling and Servicing Guides, duplicative policies related to flood insurance coverage requirements have been consolidated from the Servicing Guide B-3, Flood Insurance Requirements, into the Selling Guide, B7-3-07, Flood Insurance Coverage Requirements. 
  • In addition, several clarifications have been made.

[Please see guide announcement for complete details]

Origination and Underwriting, Rental income and Documentation requirements for Social Security retirement and disability benefits

Effective: March 1, 2019
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling Bulletin 2018-19 →
Tags: Income, Underwriting
View Details

Effective for Mortgages with Settlement Dates on and after March 1, 2019; however, Sellers may implement these changes earlier if they are able to do so 

Rental income 

In Bulletin 2018-13, we further extended the effective date for rental income requirements announced in Bulletin 2017-12 to March 1, 2019 to enable us to review and consider all Seller feedback. After our review of Seller feedback, coupled with our internal review and analysis, we are updating our requirements as follows. 

• For simplification, we are removing the requirement that the net rental income considered for qualification must not exceed 30% of the Borrower’s monthly qualifying income unless the Borrower has a minimum of one-year rental management experience 

• To support sustainable homeownership through responsible lending practices, we are adding the requirements: 

➢ The Borrower must own a Primary Residence to use rental income to qualify when purchasing a new rental property; and 

➢ Whether purchasing a new rental property or converting a Primary Residence to a rental property, if the Borrower does not have a minimum of one-year investment property management experience: 

o The rental income can only offset the principal, interest, taxes and insurance (PITI) of the rental property; and 

o Rental income exceeding the PITI cannot be added to the Borrower’s gross monthly income to qualify 

Additionally, we will require only the Borrower’s most recent federal income tax return, in lieu of the most recent two years’ federal income tax returns. Rental income must be annualized unless the Mortgage file documents that the property was renovated or purchased late in the prior calendar year. 

Sellers may originate, underwrite and deliver Mortgages based either on the rental income requirements: 

• In effect prior to Bulletin 2017-12 in their entirety 

• The revised rental income requirements announced in Bulletin 2017-12 in their entirety (and for which the effective date was extended in Bulletins 2018-1 and 2018-13); or 

• The revised rental income requirements in the March 1, 2019 version of Guide Section 5306.1 in their entirety 

For Mortgages with Settlement Dates on and after March 1, 2019, Sellers must originate, underwrite and deliver Mortgages in accordance with the rental income requirements in the March 1, 2019 version of Section 5306.1. 

Loan Product Advisor® feedback messages will be updated by March 1, 2019 to reflect these changes. 

Guide impact: Section 5306.1 

Documentation requirements for Social Security retirement and disability benefits 

Previously, for all sources of retirement and long-term disability income the Guide required Sellers to document: 

• The income type, source, payment frequency, pre-determined payment amount; and 

• Current receipt of income After our review of Social Security retirement and disability benefits granted by the Social Security Administration, we are revising documentation requirements to permit: 

• A copy of the Social Security Administration benefits verification letter; or 

• Documentation evidencing current receipt of Social Security retirement or disability benefits 

Loan Product Advisor feedback messages have been updated to reflect these changes. 

Guide impact: Section 5305.2

Mortgage Insurance Termination (Optional Implementation Date)

Effective: March 1, 2019
Industry: Mortgage Servicing
Source: Fannie Mae   Lender Letter LL-2018-03 →
Tag: MIP-PMI
View Details

SVC-2018-09 Update: We are extending the mandatory effective date from March 1, 2019 to September 1, 2019 to allow servicers additional time to make the operational changes necessary for a better customer experience. Also, we’re changing the available date for borrower-initiated requests for termination of conventional MI based on current value of the property from January 1, 2019 to March 1, 2019.

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To simplify the process of evaluating borrower-initiated requests for the termination of conventional mortgage insurance (MI), we are updating our requirements. These new requirements will result in a better customer experience for both servicers and borrowers.

Our requirements related to borrower-initiated conventional MI termination requests have been changed to reflect the following:

  •  For borrower-initiated MI termination requests based on original value, allowing the use of Fannie Mae’s Automated Property ServiceTM (APS) to verify the current value of the property, resulting in servicers no longer being required to warrant the property value;
  • For borrower-initiated MI termination requests based on current value, allowing the use of broker price opinions (BPOs) through our Valuation Management System (VMS) to verify the current value of the property;
  • For borrower-initiated MI terminations based on current value with property improvements, changing the loan-to-value (LTV) threshold from 75% or less to 80% or less and providing examples of what are considered substantial improvements;
  • Allowing borrower-initiated terminations to be evaluated based on a borrower’s written or verbal request;
  • Incorporating into the Servicing Guide changes announced in LL-2017-09, Fannie Mae Extend Modification for Disaster Relief and Other Clarifications for Mortgage Loans Impacted by Disaster Events, related to evaluating a borrower’s request for termination of MI for any mortgage loan that is impacted by disaster; and
  • Removing outdated original value termination requirements.

Unless stated otherwise, these requirements will replace the following sections in the Servicing Guide:

Effective Date

Servicers are encouraged to implement these policy changes as early as APS and VMS become available on March 1, 2019; however, servicers are required to implement these changes by September 1, 2019, unless otherwise noted in this Lender Letter.

Borrower-Initiated Termination of Conventional Mortgage Insurance Based on Original Value of the Property

The servicer must take the following steps to evaluate the borrower’s request for MI termination because of a curtailment:

  1. Verify the LTV ratio, or combined loan-to-value (CLTV) ratio if applicable, of the mortgage loan meets our eligibility criteria.

The following table describes the LTV ratio, or CLTV ratio if applicable, eligibility criteria. 

 

If the mortgage loan is...

Then...

a first lien mortgage loan secured by a one-unit principal residence or second home

the LTV ratio eligibility criterion is met on the date the mortgage loan  balance is first scheduled to reach 80% (or actually reaches 80%) of the original value of the property.

a first lien mortgage loan secured by a one- to four-unit investment property or a two- to four-unit principal residence

the  LTV  ratio  eligibility  criterion  is  met  on  the  date  the outstanding principal balance of the mortgage loan reaches 70% percentage of the original value of the property.

a second lien mortgage loan

the CLTV eligibility criterion is met on the date the sum of the outstanding principal balances of all mortgage loans secured by the property reaches 70% of the value of the property at the time the second lien mortgage loan was originated.

N O T E : The servicer must determine the original value of the property in accordance with applicable law.

 2. Verify the borrower has an acceptable payment record.

An acceptable payment record is achieved when the mortgage loan

  •  is current when the termination is requested, which means the mortgage loan payment for the month preceding the date of the termination request was paid;
  • has no payment 30 or more days past due in the last 12 months; and
  • has no payment 60 or more days past due in the last 24 months.

N O T E : When assessing the payment history for a mortgage loan that has been outstanding for fewer than 24 months (or for a current borrower who assumed a mortgage loan within the last 23 months), the servicer must apply the acceptable payment record criterion to the length of time the mortgage loan has been outstanding (or that has elapsed since the current borrower assumed the mortgage loan).   

The 12- and 24-month payment histories must be measured backward from the later of the date

  •  the balance is first scheduled to reach, or actually reaches, 80% of the original value of the property; or
  • the borrower actually requests termination.

3. Verify the current value of the property is not less than its original value.

The servicer must obtain a property valuation from Fannie Mae’s APS or follow the Ordering Property Values for Mortgage Insurance Termination section below to verify that the current value of the property is at least equal to the original value of the property and take the required actions based on the following table. 

If …

Then the servicer must…

APS renders a current property value with a reliable confidence score and the value is at least equal to the original value of the property

terminate the MI and notify the borrower within 30 days of receiving the value.

APS renders a current property value with a reliable confidence score and the value is less than the original value of the property

deny the borrower’s request for termination unless the borrower:

  • pays down the mortgage loan balance to the point that it satisfies Fannie Mae’s applicable LTV or CLTV ratio eligibility criterion, or
  • chooses to verify that the current value of the property is at least equal to the original value of the property by following the Ordering Property Values for Mortgage Insurance Termination section below.

APS does not render a property value with a reliable confidence score

deny the borrower’s request for termination unless the borrower chooses to verify that the current value of the property is at least equal to the original value of the property by following the Ordering Property Values for Mortgage Insurance Termination section below.

The BPO or appraised value is at least equal to the original value of the property

terminate the MI and notify the borrower within 30 days of receiving the value.

The BPO or appraised value is less than the original value of the property

deny the borrower’s request for termination unless the borrower pays down the mortgage loan balance to the point that it satisfies Fannie Mae’s applicable LTV or CLTV ratio eligibility criterion.

N O T E : The APS value will only be updated after 120 days.

The servicer must notify the borrower if the request for termination is denied and provide the grounds for denial, including the results of the APS value, BPO, or appraisal used to make the determination. This notice must be sent within 30 days of the date the servicer received the APS value, BPO, or appraisal, if applicable.

Borrower-Initiated Termination of Conventional Mortgage Insurance Based on Current Value of the Property

If the borrower’s request for termination includes the information necessary to reach a decision, the servicer must evaluate the request based on the following:

 1. Verify the LTV ratio, or CLTV ratio if applicable, of the mortgage loan meets Fannie Mae’s eligibility criteria.

Satisfaction that the mortgage loan meets the applicable LTV ratio or CLTV ratio eligibility criterion must be evidenced by obtaining a property valuation from Fannie Mae’s VMS application as described in Ordering Property Values for Mortgage Insurance Termination below.

The following table describes the LTV ratio (or CLTV ratio, if applicable) eligibility criteria.

If the mortgage loan is...

Then...

a first lien mortgage loan secured by a  one-unit  principal  residence  or second home                                                                                                                                                                        

the LTV ratio must be:

  • 75% or less, if the seasoning of the mortgage loan is between two and five years; or
  • 80% or less, if the seasoning of the mortgage loan is greater than five years.

If Fannie Mae’s minimum two-year seasoning requirement is waived  because the property improvements made by the borrower increased the property value, the LTV ratio for the first lien mortgage loan must be 80% or less.

N O T E : The borrower must provide details to the servicer on the property improvements made since the mortgage loan’s origination. Improvements that increase value are typically renovations that substantially improve marketability and extend the useful life of the property (e.g. kitchen and bathroom renovations and/or the addition of square footage). Repairs that are made to keep the property maintained and fully functional are not considered improvements.

a first lien mortgage loan secured by a one- to four-unit investment property or a two- to four-unit principal residence

the LTV ratio must be 70% or less, regardless of the seasoning of the mortgage loan.

a second lien mortgage loan

the CLTV ratio must be 70% or less, regardless of the seasoning of the mortgage loan.

2. Verify the borrower has an acceptable payment record.

An acceptable payment record is achieved when the mortgage loan

  •  is current when the termination is requested, which means the mortgage loan payment for the month preceding the date of the termination request was paid;
  • has no payment 30 or more days past due in the last 12 months; and
  • has no payment 60 or more days past due in the last 24 months.

N O T E : When assessing the payment history for a mortgage loan that has been outstanding for fewer than 24 months (or for a current borrower who assumed a mortgage loan within the last 23 months), the servicer must apply the acceptable payment record criterion to the length of time the mortgage loan has been outstanding (or that has elapsed since the current borrower assumed the mortgage loan).

If a mortgage loan has been assumed, the servicer must not agree to the termination unless the current borrower has a 24- month payment history for the mortgage loan.

The servicer must notify the borrower if the request for termination is denied and provide the reasons for denial, including the results of the BPO or appraisal. This notice must be sent within 30 days after the latter of the date the servicer received

  • the borrower’s request for termination, or
  • the BPO or appraisal.

Ordering Property Values for Mortgage Insurance Termination

The BPO or appraisal to determine the current value of the property is at the expense of the borrower. As soon as the servicer receives the applicable fee for the valuation from the borrower, on one unit properties it must order a BPO, or appraisal if the servicer determines it is required by law, using Fannie Mae’s VMS application and the updated VMS Valuation Order Template. On two- to four- unit properties, the servicer must order an appraisal using Fannie Mae’s VMS application and the updated VMS Valuation Order Template. The borrower must be charged for the cost of the BPO or appraisal based on the following table.

Valuation Type

Cost

BPO 

$150

Restricted appraisal one-unit

$325

Appraisal two- to four-unit

$750

If the borrower is requesting MI termination based on current value of the property because of property improvements made by the borrower, the servicer must include details of the property improvements provided by the borrower in the VMS Valuation Order Template.

Verification of Acceptable Payment Record for Borrowers Impacted by a Disaster

Effective immediately, when verifying the borrower’s acceptable payment record for MI termination the servicer must not consider any payment that is 30 or more days past due in the last 12 months, or 60 or more days past due in the last 24 months, that is attributable to a disaster event in which the servicer provided the following:

  • disaster relief, or
  • a forbearance plan, repayment plan, or Trial Period Plan, and the borrower complied with the terms of any such plan.

Insurer Rating and Flood Insurance Requirements

Effective: March 1, 2019
Industry: Mortgage Lending, Mortgage Servicing
Source: Fannie Mae   SVC-2018-09 →
Tag: Insurance
View Details

Insurer Rating Requirements

  • Policies related to property insurance carrier requirements have been consolidated from Servicing Guide B-2-01, Property Insurance Requirements Applicable to All Property Types into Selling Guide, B7-3-01, Property Insurance Requirements for Insurers
  • Kroll Bond Rating Agency has been as an acceptable ratings agency
  • Restrictive rating requirements for co-op projects have been removed; our general carrier rating requirements now apply

Flood Insurance Updates and Guide Alignment

  • Duplicative policies related to flood insurance coverage requirements have been consolidated from Servicing Guide Chapter B-3 to Selling Guide Chapter B7-3-07
  • Although a flood insurance policy declarations page is acceptable evidence of insurance, verification that private flood insurance coverage is equivalent to the National Flood Insurance Program (NFIP) coverage based on a review of the full flood insurance policy is required.  
  • All planned-unit development (PUD) unit owners (both detached and attached) may maintain an individual flood dwelling policy in lieu of a master flood insurance policy.
  • For flood insurance for mortgage loans in a project, contents coverage for the building must be the lesser of 100% of the insurable value, or the NFIP maximum available.
  • For mortgage loans in condo projects with over 25% commercial space, a master flood insurance policy with limited coverage through the General Property Form, or an equivalent policy, is not acceptable coverage. To meet our coverage requirements, these projects must obtain coverage, either through a single private policy or a private supplemental policy in conjunction with a General Property Form flood master policy through the NFIP.
  • Flood insurance master policies, both NFIP policies and policies through a private insurer, without a mortgagee clause are acceptable.

In addition, two new policies were added providing flexibility for servicers: 

  • The following types of mortgage loans requiring flood insurance will no longer require the homeowner’s association (HOA) to maintain a master flood insurance policy:
    • condo units originated under DU Refi Plus™, Refi Plus™, or the High LTV refinance transaction;
    • detached condos; and
    • 2-4 unit attached condo projects.

Rather, the borrower may maintain an individual flood insurance dwelling policy that meets our coverage requirements. 

  • Mortgage loans secured by properties in a community in the Emergency Program of the NFIP will no longer be required to maintain coverage in excess of the coverage available through the NFIP Emergency Program. A private policy with coverage equivalent to the coverage available through the NFIP Emergency Program will also be acceptable until the community is approved to participate in the NFIP Regular Program.

Delinquency Management Requirements

Effective: March 1, 2019
Industry: Mortgage Servicing
Source: Fannie Mae   Fannie Mae Servicing Guide Announcement SVC-2018-08 →
Tag: Delinquent Loans
View Details

As a part of our ongoing effort to simplify servicing, we are reviewing our delinquency management requirements in a post-crisis environment. As a result, we are making changes to our outbound contact attempts, breach letter, and initial property inspection requirements to reduce the cost of servicing. At the direction of FHFA under the Servicing Alignment Initiative, Freddie Mac is aligning with these policy changes. 

We are updating 

 the frequency of outbound contact attempts from every five days to every seven days between day 36 and 210 of delinquency, and 

 the timing of when the breach or acceleration letter must be issued from no later than the 60th to no later than the 75th day of delinquency.

Updated Servicing Guide Topics 

 D2-2-02, Outbound Contact Attempt Requirements 

 D2-2-06, Sending a Breach or Acceleration Letter

Effective Date 

Servicers are encouraged to implement these policy changes immediately, but must implement these changes by March 1, 2019. 

Delinquent Mortgage Property Inspection

Effective: March 1, 2019
Industry: Mortgage Servicing
Source: Fannie Mae   SVC-2018-08 →
Tags: Property Preservation, Delinquent Loans
View Details

A recent review of our inspection requirements identified that the timing of the initial property inspection at the 45th day of delinquency yielded very few benefits due to a servicer’s typical 30-day roll rate. We are updating our property inspection requirements to 

 change the timing for ordering the initial property inspection for a delinquent mortgage loan from the 45th day of delinquency to the 60th day of delinquency. With this change, the initial property inspection must be completed by the 75th day of delinquency; and 

 add a requirement to discuss the occupancy status of the property when establishing Quality Right Party Contact (QRPC) to further reduce the need for property inspections.

Updated Servicing Guide Topics 

 D2-2-01, Achieving Quality Right Party Contact with a Borrower 

 D2-2-10, Requirements for Performing Property Inspections 

Effective Date 

Servicers are encouraged to implement these policy changes to the timing of initial property inspections immediately, but must implement these changes by March 1, 2019.

Borrower Contact and Property Inspections for Delinquent Mortgages

Effective: March 1, 2019
Industry: Mortgage Servicing
Source: Freddie Mac   Freddie Mac Servicing Bulletin 2018-22 →
Tag: Delinquent Loans
View Details

BORROWER CONTACT REQUIREMENTS

Effective March 1, 2019; however, Servicers may implement sooner if they are able to do so

In response to Servicer feedback, jointly with Fannie Mae and at the direction of the FHFA, we are updating certain requirements for contacting delinquent Borrowers. 

Servicers are currently required to attempt to contact delinquent Borrowers every five days, starting no later than the 36th day of Delinquency (or the 36th day after the Due Date of an unpaid monthly installment) until either the 210th day of Delinquency or quality right party contact (QRPC) is achieved, whichever comes first.

We are extending the period between contact attempts from every five days to every seven days. Servicers will now be required to continue Borrower contact attempts at least every seven days throughout the delinquency cycle, starting on the 36th day of Delinquency until the earlier of the 210th day of Delinquency or QRPC is achieved. 

We are also extending the required time to issue breach letters (also referred to as “notices of acceleration” or “demand letters”) from no later than the 60th day of Delinquency to no later than the 75th day of Delinquency, unless otherwise required by State law. 

Guide impacts: Sections 9101.2 and 9102.4

PROPERTY INSPECTIONS FOR DELINQUENT MORTGAGES 

Effective March 1, 2019; however, Servicers are encouraged to implement sooner

Currently, if a Servicer has not received a payment in the last 30 days or has not achieved QRPC in accordance with Section 9102.3, the Servicer must order an initial property inspection no later than the 45th day of Delinquency and obtain the complete report by the 60th day of Delinquency. 

To provide Borrowers and Servicers more time to resolve the Delinquency and avoid unnecessary property inspections, we are extending this time frame. Servicers must order the initial property inspection on or after the 60th day of Delinquency and complete the property inspection no later than the 75th day of Delinquency for all delinquent Mortgages. Servicers must continue to obtain a newly completed property inspection report every calendar month. No two reports may be completed within a 20-day period while the Mortgage remains 60 days or more delinquent. 

In addition, we are updating our requirements for establishing QRPC by requiring Servicers to make every attempt to determine the occupancy status of the property. It is important that Servicers determine the occupancy status as early as possible to proceed with Borrower evaluation for workout solutions to resolve the Delinquency. 

Guide impacts: Sections 9101.2, 9102.3, 9102.4 and 9202.12 

SERVICER EXECUTION OF DOCUMENTS

Freddie Mac makes available to Servicers upon request a limited power of attorney (LPOA) which empowers Servicers to execute certain documents, such as release documents and assignments of the Security Instrument for initiating foreclosures, in Freddie Mac’s name. We are expanding the scope of this LPOA which will broaden Servicer’s authority to execute documents when Mortgages are assigned to Freddie Mac. Under the LPOA, Servicers may execute the following documents:

• Full release 

• Lien releases 

• Partial releases or discharges 

• Mortgage modifications 

• Subordination of liens 

• Foreclosure actions 

• Reconveyances 

• Assignments 

• Gap assignments

A sample LPOA is now included in the Guide as Exhibit 53. 

Servicers are strongly encouraged to request multiple LPOAs as needed (e.g., for recordation in the local land record offices) by submitting an e-mail request to Shortsales@freddiemac.com in accordance with Section 8101.4 and Directory 9. 

Servicers that service Senior Subordinate Mortgages must submit requests for multiple LPOAs related to such Mortgages by sending an e-mail to Foreclosures@freddiemac.com in accordance with Section 8601.6 and Directory 5.

Additionally, we are updating Section 8101.4 to specify that Servicers with an LPOA from Freddie Mac do not need to submit requests to Freddie Mac to execute the types of documents outlined in the LPOA. The Servicer may execute these documents in Freddie Mac’s name pursuant to a Freddie Mac issued LPOA when the Mortgage has been assigned to Freddie Mac. 

Guide impacts: Sections 8101.3, 8101.4 and Exhibit 53

Special Relief Following Alaska Earthquakes

Effective: March 1, 2019
Industry: Mortgage Servicing
Source: VA   Circular 26-19-08 →
Tags: Loss Mitigation, Foreclosure, Credit Reporting, Fees, SCRA
View Details

1. Purpose. This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by the Alaska earthquakes, and describes measures mortgagees may employ to provide relief. Mortgage servicers and borrowers alike should review VA’s Guidance on Natural Disasters to ensure Veterans receive the assistance they need. (https://www.benefits.va.gov/ho... or https://www.benefits.va.gov/WARMS/docs/admin26/m26_04/Chapter_21.docx.)

2. Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of the Alaska earthquakes. Careful counseling with borrowers should help determine whether their difficulties are related to this disaster, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, Title 38, Code of Federal Regulations (C.F.R.), section 36.4311 allows the reapplication of prepayments to cure or prevent a default. Also, 38 C.FR. 36.4315 allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided conditions in the regulation are satisfied.

3. Moratorium on Foreclosure. Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (https://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster declaration on initiating new foreclosures on loans affected by major disasters. VA regulation 38 C.F.R. 36.4324(a)(3)(ii) allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. Due to the widespread impact of the disaster, holders should review all foreclosure referrals to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about impact should be discussed with the VA Regional Loan Center (RLC) of jurisdiction.

4. Late Charge Waivers. VA believes that many servicers plan to waive late charges on affected loans, and encourages all servicers to adopt such a policy for any loans that may have been affected.

5. Credit and VA Reporting. In order to avoid damaging credit records of Veteran borrowers, servicers are encouraged to suspend credit bureau reporting on affected loans. VA will not penalize affected servicers for any late default reporting to VA as a result. Please contact the appropriate RLC with any questions.

6. Activation of the National Guard. Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service.

7. Rescission: This Circular is rescinded April 1, 2020.

Revisions to Rental Income Requirements

Effective: March 1, 2019
Industry: Mortgage Lending
Source: Freddie Mac   Bulletin 2017-12 →
Tags: Income, Underwriting
View Details
  • The changes reflect evolving rental trends and provides guidance to support the determination of stability, reasonable expectation of continuance, and calculation of rental income.
  • The changes are extensive; a comprehensive review of the bulletin and Attachment A are encouraged. 

Loan Product Advisor® asset income modeler (AIM) for self-employed

Effective: March 6, 2019
Industry: Mortgage Lending
Source: Freddie Mac   AIM for Self-Employed →
Tags: Income, Underwriting
View Details

On March 6, we'll release broadly Loan Product Advisor® asset income modeler (AIM) for self-employed, our solution to help you automate the process of assessing borrower income using tax return data. 

Loan Product Advisor and the LoanBeam® technology work together to make your job easier and provide immediate income rep and warranty relief. It's the only AUS-integrated self-employed income assessment solution in the industry. Here's how it works.

Resources

Occupancy Types

Effective: March 6, 2019
Industry: Mortgage Lending
Source: Fannie Mae   SEL-2019-02 →
Tag: Underwriting
View Details

A principal residence is a property that the borrower occupies as his or her primary residence. However, the parents or legal guardians of a physically handicapped or developmentally disabled adult child do not have to occupy the property and it is also considered a principal residence. With this update, we removed the terms “physically” or “developmentally” from this topic to clarify this long-standing policy as inclusive of all disabilities. 

Leasehold Estates

Effective: March 6, 2019
Industry: Mortgage Lending
Source: Fannie Mae   SEL-2019-02 →
Tag: Underwriting
View Details

We have clarified that one of the lender’s responsibilities in the proper review of leasehold estates is to ensure Fannie Mae’s first-lien enforceability as part of the terms of the lease. Failure to comply with this requirement at any time is a breach of the life of loan representation and warranty.

Mortgage Electronic Registration System

Effective: March 6, 2019
Industry: Mortgage Lending, Mortgage Servicing
Source: Fannie Mae   SEL-2019-02 →
View Details

In our continued effort to combine similar content in the Selling and Servicing Guides, we have consolidated shared requirements for sellers and servicers related to the use of Mortgage Electronic Registration Systems (MERS), Inc. 

Going forward, sellers/servicers may locate MERS-related content in one, streamlined topic in Part B of the Selling Guide.

Freddie Mac Selling Update

Effective: March 6, 2019
Industry: Mortgage Lending
Source: Freddie Mac   Selling Update 2019-5 →
Tags: Income, Underwriting, Certification, Endorsement, and Delivery
View Details

BORROWER INCOME

Automated income assessment with Loan Product Advisor using tax return data

We are introducing automated income assessment with Loan Product Advisor using tax return data, which is part of asset and income modeler (AIM) as "AIM for self-employed," in new Guide Chapter 5903. This capability, which is focused on assessment of self-employed income, is designed to automate the income calculation process, help reduce origination costs and provide Sellers with the opportunity for relief from enforcement of certain representations and warranties related to the Borrower's self-employed income.

The automated income assessment with Loan Product Advisor using tax return data offering is effective for Loan Product Advisor submissions and resubmissions on and after March 6, 2019.

To take advantage of this optional capability, the Seller must upload the Borrower's federal income tax returns to a Freddie Mac-designated third-party service provider. The service provider returns to the Seller an Income Calculation Report consisting of data extracted from the Borrower's tax returns, which the Seller must review and verify in accordance with the requirements of Guide Section 5903.3(a). Once the report is verified and complete, the Seller must upload it to the service provider. Loan Product Advisor retrieves the Borrower tax return data from the service provider and assesses it for representation and warranty relief eligibility, with the results returned in the Feedback Certificate.

Refer to Chapter 5903 for requirements on automated income assessment with Loan Product Advisor using tax return data. To learn more about our other automated assessment offerings, see the following chapters, which have been renamed to establish consistency across all offerings:

  • Chapter 5901 for requirements regarding automated income assessment with Loan Product Advisor using employer data
  • Chapter 5902 for requirements regarding automated asset assessment with Loan Product Advisor using account data

To learn more about getting started and assessing operational impacts for using this new capability, register for our new webinar, Set Your Target on AIM for Self-Employed Income with Loan Product Advisor. For additional resources, access the AIM for Self-Employed web page or the Freddie Mac Learning Center.

Guide impacts: Chapter 5903, Sections 1301.11, 3402.5, 3402.8, 5302.3, 5302.5, 5501.3, 5901.1, 5901.2, 5901.4 and 5902.1 through 5902.4

Documentation requirements for self-employed Borrowers

Currently, one year of business and personal tax returns are required when the business has been in existence for five or more years. We are specifying that the Borrower must be self-employed (i.e., have an ownership interest of 25% or more) in the same business for at least five years to take advantage of this flexibility.

This update does not represent a change in existing requirements.

Guide impact: Section 5304.1

Restricted stock/restricted stock units income documentation requirements

In Bulletin 2017-20, we introduced requirements for using restricted stock (RS) and restricted stock units (RSU) as qualifying income.

After additional analysis, we are streamlining the related documentation requirements by making the following changes:

  • Permitting the type of vesting provision to be verified with other documentation (e.g., an offer letter), in addition to the currently required RS and/or RSU agreement
  • Allowing income verification obtained through a third-party verification service provider as described in Section 5302.3, provided that RS and/or RSU payouts are clearly identified and distinguished
  • Updating our requirement for vesting schedule(s) to state that they must be "currently in effect," rather than "most recent," as previously stated
  • Removing the requirement for documented "date(s) of the payout(s)"

Guide impact: Section 5303.3

CREDIT ASSESSMENT WITH LOAN PRODUCT ADVISOR

For Accept Mortgages, we are eliminating the requirement that the Seller must determine if the decision repository file used to create the Selected Borrower's credit report contains significant inaccurate credit information. This change will remove a manual overlay and help create efficiency.

As a result of this change, we are removing the references to "Selected Borrower" in the Guide and eliminating the Glossary term "Selected Borrower."

The delivery requirements in Section 6302.26(b)(vii) for Mortgages sold through Cash-Released XChangeSM still apply.

Guide impacts: Section 5201.1 and Glossary R-Z

ADDITIONAL GUIDE UPDATES

Commission income eligibility for automated income assessment

In Bulletin 2019-4, we announced that all commission income, regardless of its percentage of total income from the employment, will be eligible for automated income assessment, which is part of AIM. This expands the income sources eligible for this capability to include commission income greater than or equal to 25% of the total income from the commissioned employment.

This change was effective for Loan Product Advisor submissions and resubmissions on and after March 24, 2019. We are now deferring this effective date to Loan Product Advisor submissions and resubmissions on and after March 31, 2019.

Guide impact: Section 5901.2

Rental income requirements

In response to Seller feedback, we are clarifying:

  • When it is appropriate to use a lease to document rental income as opposed to using the Schedule E
  • That rental income can offset the full monthly payment rather than just the principal, interest, taxes and insurance

Guide impact: Section 5306.1

Freddie Mac post-funding quality control review

We are updating our post-funding quality control review requirements to specify that the Mortgage file must include the final Settlement/Closing Disclosure Statement and any related documentation evidencing all costs to the homebuyer and property seller, if applicable.

Guide impact: Section 3401.25

11th District Cost of Funds Index retirement

The 11th District Cost of Funds Index (11th District COFI) (for ARMs, the monthly average cost of savings, borrowings and advances of the members of the Federal Home Loan Bank of San Francisco (the "Bank"), as made available by the Bank) is scheduled to be retired in January 2020. As a result, Freddie Mac is retiring Form 3510, Multistate Adjustable-Rate Mortgage Note, and Form 3120, Security Instrument Rider, specific to use of the 11th District COFI. The Uniform Instrument web page has been updated to reflect these changes. At a future date, we will provide instructions to Servicers on the substitute index for 11th District COFI ARMs that are being serviced for Freddie Mac.

11th District COFI ARMs are not eligible for sale to Freddie Mac and have not been eligible for sale since MIDANET® was retired in March 2012.

Special Relief Following Alabama Severe Storms, Straight-line Winds and Tornadoes

Effective: March 8, 2019
Industry: Mortgage Servicing
Source: VA   Circular 26-19-07 →
Tags: Loss Mitigation, Foreclosure, Fees, Credit Reporting, SCRA
View Details

1. Purpose. This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by severe storms, straight-line winds and tornadoes in the state of Alabama, and describes measures mortgagees may employ to provide relief. Mortgage servicers and borrowers alike should review VA’s Guidance on Natural Disasters to ensure Veterans receive the assistance they need. (https://www.benefits.va.gov/ho... or https://www.benefits.va.gov/WARMS/docs/admin26/m26_04/Chapter_21.docx.) 

2. Forbearance Request. VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of the disaster. Careful counseling with borrowers should help determine whether their difficulties are related to this disaster, or whether they stem from other sources that must be addressed. The proper use of authorities granted in VA regulations may be of assistance in appropriate cases. For example, Title 38, Code of Federal Regulations (C.F.R.), section 36.4311 allows the reapplication of prepayments to cure or prevent a default. Also, 38 C.FR. 36.4315 allows the terms of any guaranteed loan to be modified without the prior approval of VA, provided conditions in the regulation are satisfied. 

3. Moratorium on Foreclosure. Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (https://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster declaration on initiating new foreclosures on loans affected by major disasters. VA regulation 38 C.F.R. 36.4324(a)(3)(ii) allows additional interest on a guaranty claim when eventual termination has been delayed due to circumstances beyond the control of the holder, such as VA-requested forbearance. Due to the widespread impact of the disaster, holders should review all foreclosure referrals to ensure that borrowers have not been affected significantly enough to justify delay in referral. Any questions about impact should be discussed with the VA Regional Loan Center (RLC) of jurisdiction. 

4. Late Charge Waivers. VA believes that many servicers plan to waive late charges on affected loans, and encourages all servicers to adopt such a policy for any loans that may have been affected. 

5. Credit and VA Reporting. In order to avoid damaging credit records of Veteran borrowers, servicers are encouraged to suspend credit bureau reporting on affected loans. VA will not penalize affected servicers for any late default reporting to VA as a result. Please contact the appropriate RLC with any questions. 

6. Activation of the National Guard. Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service. 

7. Rescission: This Circular is rescinded April 1, 2020. 

Servicing Updates

Effective: March 13, 2019
Industry: Mortgage Servicing
Source: Freddie Mac   Guide Bulletin 2019-6 →
Tags: Bankruptcy, Loss Mitigation
View Details

Servicer Success Scorecard

  • We are announcing that a Servicer’s annual ranking, if applicable, will be reflected on the Servicer’s June 2019 scorecard, which will be published at the end of July 2019. 
  • Please see Guide Bulletin for complete details regarding the Annual rankings methodology.

Freddie Mac Servicer Honors and Rewards Program

  • The Freddie Mac Servicer Honors and Rewards Program (SHARP) SM is our
    new rewards and recognition program based on Servicer performance results, and is a component of the Freddie Mac Servicer Success Program. 
  • The rewards and recognition recipients are determined using eligible Servicers’ final annual rankings (see annual ranking methodology under Servicer Success Scorecard above).
  • We have added Section 3501.2(c) to include a reference to Freddie Mac SHARP in the Guide. For full program details, including Servicer eligibility and the specific rewards and recognition, see the Freddie Mac Servicer Honors and Rewards Program web page.

12-month occupancy waiver requests

  • The Fannie Mae/Freddie Mac Single-Family Uniform Security Instrument requires a Borrower to occupy the Mortgaged Premises within 60 days of executing the Security Instrument and continue to occupy the Mortgaged Premises as a Primary Residence for at least one year after the date of occupancy, unless otherwise agreed to in writing with the lender. 
  • In response to Servicer inquiries, we are providing guidance on requesting Freddie Mac approval to waive this requirement in new Section 8405.1.

Bankruptcy legal fee

  • We are clarifying our reimbursement requirements for the bankruptcy legal fee when filing the Mortgage Proof of Claim Attachment (Official Form 410A). 
  • If the Official Form 410A must be filed with the Proof of Claim (Official Form B410), Servicers can be reimbursed up to an additional $300. This legal fee includes preparation and/or review, as required for filing the Official Form 410A.

Borrowers in Trial Period Plans prior to entering forbearance plans 

  • We are updating Section 9206.11(b)(iii) to more closely align with the requirements in Section 9203.15 related to Borrowers who are in Trial Period Plans prior to entering into forbearance plans. 

Seller/Servicer Certificates of Incumbency

  • Retitled Form 988SF-1 to Form 988SF and updated the form to expand its use to limited liability companies. With this change, we no longer require Form 988SF-2 for limited liability companies or the attorney letters, and we deleted that form. 
  • Revised Forms 988SF and 989SF to make the forms easier to complete 
  • Enabled Seller/Servicers to identify more Authorized Users than a single Form 988SF or Form 989SF can accommodate by submitting more than one form (in lieu of the special addendum form previously required), if certain conditions are met
  • For both Forms 988SF and 989SF, identified Sellers’ and Servicers’ Authorized Users in one section.
  • We also deleted Forms 988ASF and 989ASF, as they are no longer necessary. While Seller/Servicers may continue to submit the old COI forms, Freddie Mac will not make them available. 

11th District Cost of Funds Index retirement

  • As announced in Bulletin 2019-5, the 11th District Cost of Funds Index (11th District COFI) is scheduled for retirement in January 2020. At a future date, we will provide instructions to Servicers on the substitute index for 11th District COFI ARMs that are being serviced for Freddie Mac.

FHA MI Streamlining Warranty Requirements - Removal of the Ten-Year Protection Plan Requirements

Effective: March 14, 2019
Industry: Mortgage Lending, Mortgage Servicing
Source: FHA   HUD Final Rule →
Tags: MIP-PMI, Underwriting
View Details
  • Removes the regulations that require borrowers to purchase 10-year protection plans in order to qualify for certain mortgages on newly constructed single-family homes (24 CFR 203.18 and 203.200-209; 24 CFR 203.50(f)(1))
  • Retains the requirement that the Warranty of Completion of Construction (form HUD-92544) be executed by the builder and the buyer of a new construction home, as a condition for FHA mortgage insurance

Removal of the FHA Ten-Year Protection Plan Requirements

Effective: March 14, 2019
Industry: Mortgage Lending
Source: FHA   Mortgagee Letter 2019-05 →
View Details

These changes are effective for all case numbers assigned on or after March 14, 2019. 

  • Streamlines home warranty requirements for FHA single-family mortgage insurance by removing the policy guidance that require borrowers to purchase 10-year protection plans in order to qualify for certain mortgages on newly constructed single-family homes.
  • The buyer will still retain a one-year warranty, which provides assurance to
    FHA that the home was built according to plan, and protects the buyer against defects in equipment, material, or workmanship supplied or performed by the builder, subcontractor, or supplier. 
  • The warrantor agrees to fix and pay for the defect and restore any component of the home damaged in fulfilling the terms and conditions of the warranty. The one-year warranty commences on the date that title is conveyed to the buyer, the date that construction is complete, or upon occupancy, whichever date occurs first.

Handling Unreimbursed Business Expenses and Commission Income

Effective: March 15, 2019
Industry: Mortgage Lending
Source: VA   Circular 26-19-09 →
Tags: Income, Underwriting
View Details

1. Purpose. The purpose of this Circular is to revise the Department of Veterans Affairs (VA) underwriting guidelines [VA Lenders Handbook, Chapter 4, Topic 2 i – “Income from Commissions”] to remove the requirements for Internal Revenue Service (IRS) Form 2106 with the exception of Armed Forces Reservist, qualified performing artists, fee-basis state or local officials, and employees with impairment-related work expenses. This is in order to comply with the Tax Cuts and Jobs Act of 2017 (Public Law 115-97) for the treatment of unreimbursed business expenses reported currently on IRS Form 2106. VA previously issued guidance with Circular 26-16-10.

2. Background. Unreimbursed employee expenses are reported as a deduction on the borrower’s individual federal income tax return (IRS Form 2106, or IRS Form 1040, Schedule A or C). These expenses are used when calculating an automobile allowance and commission income when it is 25 percent or more of employment income.

3. Amended VA policy. As a result of the tax law changes, the different treatment of commission income based on the percentage of employment income and unreimbursed business expenses is being removed. The requirement for IRS Form 2106 with the reporting of 2018 federal income taxes is also removed.

4. Rescission: This Circular is rescinded April 1, 2020.

Ohio Mortgage Servicers Registration Requirements

Effective: March 20, 2019
Industry: Mortgage Servicing
Source: —   ​Ohio HB-489 →
Tag: Licensing
View Details

Ohio HB-489 

  • revises the laws governing credit unions, 
  • provides some regulatory relief to state banks and credit unions, 
  • provides for data analytics to be conducted on publicly available information regarding banks, credit unions, and consumer finance companies, 
  • requires registration of mortgage loan servicers, and 
  • requires a specified notice be given to a debtor for certain debt collection.

Sec. 1322.07 mandates mortgage servicers obtain a certificate of registration from the superintendent of financial institutions.

Ohio Foreclosure Procedures

Effective: March 20, 2019
Industry: Mortgage Servicing
Source: —   ​Ohio HB-480 →
Tag: Foreclosure
View Details

Ohio HB-480 establishes requirements for multi-parcel auctions and amends foreclosure procedures.

  • A judgment creditor that obtains a court order authorizing a specified private selling officer to sell the real estate at a public auction may instruct the private selling officer to postpone the sale of the real estate 1 or more times, provided, however that all rescheduled sale dates must be within 180 days of the initial sale date. Upon receiving this instruction, the private selling officer must postpone the sale of the real estate by announcing that the sale is postponed. If the sale is at a physical location, this announcement must be made at the sale and include the date, time, and place of the rescheduled sale of the real estate. If the sale is online, this announcement must be made on the auction web site and include the date of the rescheduled sale of real estate. Ohio Rev. Code Ann. §2329.152(C)(1).
  • If the judgment creditor does not wish to postpone the sale of the real estate, the judgment creditor may instruct the private selling officer to cancel the sale of the real estate. Upon receiving this instruction, the private selling officer must cancel the sale of the real estate by announcing that the sale is canceled. If the sale is at a physical location, this announcement must be made at the sale. If the sale is online, this announcement must be made on the auction web site and remain posted there until at least the end of the 7-calendar day bidding period. Ohio Rev. Code Ann. §2329.152(C)(2).
  • If the sale of the real estate is postponed or canceled all bids made on the real estate prior to the postponement or cancellation of the sale will be void. Ohio Rev. Code Ann. §2329.152(C)(3).

Loan Product Advisor Updates

Effective: March 23, 2019
Industry: Mortgage Lending
Source: Freddie Mac   February-March Updates →
Tag: Underwriting
View Details

Loan Product Advisor is updating feedback messages related to the Freddie Mac Single Security Initiative which introduce a new 10-year, fixed-rate security that was announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2018-24 [PDF].

DU Version 10.3 March Update

Effective: March 23, 2019
Industry: Mortgage Lending
Source: Fannie Mae   Release Notes →
Tag: Underwriting
View Details

DU Validation Service Enhancements 

  • The DU validation service messages for income and employment will be simplified and consolidated. Eleven new messages will replace 41 existing messages.
  • Commission Income Validation: Selling Guide Announcement SEL-2018-09 removed the different treatment of commission income based on the percentage of employment income. The DU validation service will be updated to align with this change.
  • Income Calculation Update: Based on lender feedback with respect to identifying conflicting and contradicting information, DU will be updated to identify inconsistencies between “Rate of Pay” and “Year-to-Date Income” for base pay on VOI/VOE reports. 

HomeReady® Area Median Income (AMI) Determination 

  • DU will use the lowest income limit for the county in which the property is located before the state limit is used. When the subject address cannot be standardized and a census tract cannot be determined, but the state and zip code are provided, DU will use the AMI for the county associated to the center location of the provided zip code to estimate HomeReady eligibility.

Disaster Message Change 

  • With DU Version 10.3 a new message was added for properties located in disaster impacted areas that were also eligible for the appraisal waiver offer. With this update, DU will issue this message on any loan casefile that was impacted by a recent disaster.

DU Underwriting Findings Report Updates 

  • Enhanced Findings Report: The “With Undisclosed DTI” will be removed from the Expense Ratios section in the Underwriting Analysis Report of the enhanced version of the DU Underwriting Findings report. This value will remain on the classic HTML, TXT, and XML (codified findings) versions of the report. 
  • In the Day 1 Certainty® section of the enhanced report, the "Collateral Rep and Warrant" section name will change to "Appraisal Rep and Warrant."

Updates to Align with the Selling Guide

  • The message referencing the requirement for the Form 1004MC, Market Conditions Addendum to the appraisal report will be removed.
  • On a HomeStyle® Renovation mortgage loan, the cost of renovations cannot exceed 75% of the lesser of the sum of the purchase price plus renovation costs, or the “as completed” appraised value for purchase transactions; or the “as completed” appraised value for refinance transactions. DU will also include the Energy Improvement Amount and PACE Loan Payoff amount in the calculation to determine if a loan casefile meets the 75% guideline.
  • Selling Guide Announcement SEL-2018-08 increased the maximum LTV, CLTV, and HCLTV ratio from 70% to 80% for loans where the asset owner is at least 62 years old at the time of the loan closing. DU will be updated to support this policy change. 
  • Selling Guide Announcement SEL-2018-09 clarified that all Small Business Administration (SBA) loans secured by the subject property must be treated as subordinate financing, included in the calculation of the CLTV and HCLTV ratios, and the monthly payment must also be included in the DTI ratio calculation unless the lender can satisfy specific requirements. The message issued by DU when subordinate financing is listed on the loan casefile but there is no corresponding payment entered in the Proposed Monthly Housing Payment section of the application will be updated. The message will specify that including no payment is acceptable if the subordinate lien is related to a business obligation and it complies with the policy in the Selling Guide that allows the exclusion of the payment.
  • The DU messages that reference IRS Form 2106 will be updated to remove those references. 
  • A new message will be issued for purchase loan casefiles for properties located in New York when the LTV calculated by DU is over 80% but the requirement for mortgage insurance under the New York statute may be different. This message will remind lenders to determine if mortgage insurance is required based on New York laws and regulations and refer the lender to the Selling Guide for additional details on MI requirements for properties in the state of New York.
  • With DU Version 10.3 an eligibility guideline was added to ensure that cash-out refinance transactions for borrowers with a debt-to-income ratio exceeding 45% have at least six months of reserves disclosed on the loan application. The Reserves Required to be Verified on these transactions will be updated to include at this amount, at a minimum.
  • The DO/DU user interface will be updated.
  • To continue to provide clarity and consistency with the Selling Guide, various DU messages will be updated.

Loan Selling Advisor® Updates for Cash Sellers

Effective: March 25, 2019
Industry: Mortgage Lending, Mortgage Servicing
Source: Freddie Mac  
Tag: Secondary
View Details

Automatically Price Fixed-Rate Cash Loans at Allocation   

Sellers that sell for cash, either under the Servicing Retained or Concurrent Transfer of Servicing (CTOS) (Co-Issue XChangeSM) servicing options, will no longer have to manually price fixed-rate cash loans against the contract. Loan Selling Advisor will automatically do it for you after allocating loans to the contract or modifying allocated loans.  

Cash-Released XChange Servicing Released Premiums Disclosed on Cash Price Sheet 

As a follow up to the January 28 release which provided better visibility of the Servicing Released Premiums (SRPs), as of March 25 Sellers will also see the SRP as a separate component when requesting a Freddie Mac Price Sheet. This is part of our overarching effort to provide more granular pricing information needed to help Sellers assess their best execution. 

New Fields Offer More Precise Pricing for Cash-Released XChange Client

As a reminder, four new optional fields will be available under “Additional Servicing Released Information” to offer you more precise pricing as of March 25. See the News Center article for details.  

Loan Product Advisor Updates

Effective: March 31, 2019
Industry: Mortgage Lending
Source: Freddie Mac   February-March →
Tag: Underwriting
View Details

In response to your feedback, Loan Product Advisor feedback messages are being added and revised for Freddie Mac Home Possible®. This will help you:

  • Understand when a loan qualifies for Low-Income Purchase (LIP) and Very Low-Income Purchase (VLIP) housing goals.
  • Identify when the subject property is located in a low-income census tract where there are no income limit requirements for a Home Possible mortgage.
  • Receive clearer messaging regarding the options for fulfilling the homebuyer education requirement.
  • Receive clearer messaging for our negotiated Freddie Mac HFA Advantage® offering.

Private Mortgage Insurer Eligibility Requirements

Effective: March 31, 2019
Industry: Mortgage Lending
Source: Fannie Mae , Freddie Mac   FHFA News Release →
Tag: Underwriting
View Details

Revised eligibility requirements reflect changes to the financial and operational requirements for the Enterprises' mortgage insurance counterparties.  The revised eligibility requirements become effective on March 31, 2019.

Fannie Mae Statement

Freddie Mac Statement