Compliance Calendar for September 2018

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Selling Guide Updates

Effective: September 1, 2018
Industry: Consumer Lending
Source: Fannie Mae   SEL-2018-02 →
Tag: Underwriting

The HomeStyle Renovation mortgage enables a borrower to purchase a property or refinance an existing loan and include funds in the loan amount to cover the costs of repairs, remodeling, renovations, or energy improvements to the property. Lenders have the option to deliver loans to us before completion of the renovation, subject to limited recourse and additional requirements the lender (or servicer) must comply with. 

  • Lenders may implement these policy changes immediately, but must be in compliance with all updates by September 1, 2018. 

  • The changes listed above that impact DU will apply to new loan casefiles submitted on or after the weekend of March 17, 2018. See the DU Version 10.2 Release Notes. 

  • The new requirements for recourse removal will apply to loans delivered on or after June 1, 2018. 

  • The expansion of representation and warranty relief is applicable to all HomeStyle Renovation loans, including loans previously delivered to us.

Business Continuity and Disaster Recovery

  • Currently the Selling and Servicing Guides contain high-level requirements for business continuity procedures. In an effort to provide more clarity around our expectations related to business continuity and disaster recovery, the Guide is updated with specific definitions and requirements for each.

Servicing Requirements for HomeStyle® Renovation Mortgage Loans

Effective: September 1, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Fannie Mae   Servicing Guide Announcement SVC-2018-02 →
Tags: Property - Appraisal, Escrow-Impounds

The Servicing Guide has been updated to incorporate industry best practices for HomeStyle® Renovation mortgage loans.

D1-2-01, Renovation Mortgage Loans, has been updated as follows:

  • Property inspections are now required before escrow draw requests may be approved.
  • The existing requirement that all repairs be completed by licensed contractors now extends to subcontractors as well in jurisdictions where licensing applies.
  • (Form 1036), the HomeStyle Completion Certificate, has been retired. (Form 1004D), the Appraisal update and/or Completion Report, is now mandatory to evidence project completion in all cases.
  • An updated appraisal is now required when repairs deviate materially from the original renovation plan, and any increases in the loan-to-value ratio of the mortgage loan as a result of such deviations must be self-reported to Fannie Mae.
  • A certificate of occupancy must be obtained upon completion of renovations.

Additionally, A1-1-01, Application and Approval of Seller/Servicer, has been updated to note that the special seller/servicer approval currently required to deliver or service HomeStyle Renovation mortgage loans to Fannie Mae is not required for mortgage loans delivered after the renovations have been completed.

As a reminder, when a lender chooses to deliver a HomeStyle Renovation mortgage loan to Fannie Mae before the renovations are complete, the mortgage loan is sold with recourse and specific requirements apply.

Please see Selling Guide Announcement SEL-2018-02 for additional changes related to this mortgage loan product.

Colorado Privacy and Cybersecurity Law

Effective: September 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Colorado   Ballard Sparh, LLP Alert →
Tags: Colorado, Information Security/Data Breach
  • Covered entities that maintain, own, or license "personal identifying information" (PII) of a Colorado resident are required to implement and maintain reasonable security procedures and practices that are "appropriate to the nature of the personal identifying information and the nature and size of the business and its operations."
  • Requires covered entities that maintain electronic or paper documents that contain PII to develop a written policy for the destruction of such documents when they are no longer needed.
  • Covered entities also must take measures to protect PII when transferring it to third parties. Unless a covered entity agrees to provide its own security protection for the information it discloses to a third-party service provider, the covered entity "shall require" the third-party service provider to implement and maintain reasonable security procedures and practices that are appropriate to the nature of the PII disclosed and reasonably designed to help protect the PII from unauthorized access, use, modification, disclosure, or destruction. A "third-party service provider" is defined as an entity that "has been contracted to maintain, store, or process personal information on behalf of a covered entity." 
  • Covered entities now must notify affected individuals within 30 days after determining that a security breach occurred that resulted in, or is likely to result in, misuse of personal information. Colorado’s 30-day deadline is the shortest of any state.

Allowable Title Cost for Fannie Mae Foreclosures after 9/1/2018

Effective: September 1, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   Allowable Title Cost for Fannie Mae Foreclosures after 9/1/2018 →
Tag: Foreclosure

Our new foreclosure-related title cost guidance will go into effect for all servicers for referrals on or after Sept. 1. The changes will update the maximum allowable foreclosure title costs, clarify what must be included in foreclosure title searches, and provide a new optional foreclosure title vendor list for law firms. Updated documents can be found on the Delinquency and Default Management page.

If a Mortgage Default Counsel (MDC) law firm chooses to use a Fannie Mae optional title vendor, Fannie Mae will not hold the servicer or law firm responsible if the vendor makes an error in its title search that directly results in failure to deliver a clear title after foreclosure or causes delays that exceed Fannie Mae's allowable foreclosure time frame. Remember: Servicers must allow the MDC law firm to select a title vendor of its choice and may not directly or indirectly require or encourage the law firm to use a specific vendor.

We have revised AAA matrices to include the foreclosure-related title cost guidance issued June 6, which is effective for referrals on or after Sept. 1. Please note that the title search allowable cost and/or title update standard excess cost may have changed. To view the updated matrices, visit the Excess Attorney Fee/Cost Guidelines page.

8/8/18 Update:

We've made a few updates and clarifications to our allowable foreclosure title costs guidance to address questions we received after recently announcing new requirements, effective Sept. 1. Get some answers and tips in the updated Allowable Title Costs for Fannie Mae Foreclosures and Mortgage Default Counsel Retention Agreement Amendment 2018-03, located on the Delinquency and Default Management page.

Washington Consumer Loan Act - Servicing Provisions

Effective: September 1, 2018
Industry: Mortgage Servicing
Source: Washington   Alert →
Tags: Washington, Cash Management, Escrow-Impounds, Delinquent Loans

The Washington Department of Financial Institutions has adopted new provisions under its Consumer Loan Act.

  • New provisions help to clarify the roles of parties investing in, owning, and servicing residential mortgage loans
  • Adds a provision relating to the maintenance of records electronically; a cloud service may be used for records maintenance; however, the servers used to store the records must be located in the United States or its territories
  • Prohibits certain loan servicing activities outside of the United States including: receiving payments and maintaining of payment records, collection activities, and communications with consumers
  • Activities that may be conducted outside of the United States include: data entry, document review, recommendation for action, records searches, and analysis of credit disputes and escrow accounts

https://dfi.wa.gov/sites/default/files/cla-adopted-rules.pdf

VA Colorado Liquidation Appraisal Fee Changes

Effective: September 1, 2018
Industry: Mortgage Servicing
Source: VA   VA VALERI Servicer Newsflash August 17, 2018 →
Tags: Colorado, Fees, Foreclosure
  • Effective Saturday, September 1, 2018, liquidation appraisal fees in Colorado will increase so that all counties will have the same fee per property type. 
  • The counties that currently have lower fees will increase to be in line with the rest of the counties. 
  • These changes will be updated and reflected on the VALERI Fee Cost Schedule, which is located at http://www.benefits.va.gov/HOMELOANS/servicers_valeri_rules.asp.

Freddie Mac Servicing Bulletin 2018-14 Property Inspections Related To Insurance Loss Settlements

Effective: September 1, 2018
Industry: Mortgage Servicing
Source: Freddie Mac   Freddie Mac Servicing Bulletin 2018-14 →
Tag: Disaster

Effective for all property inspections related to insurance loss settlements conducted on and after September 1, 2018 

In Bulletin 2017-21, we announced a temporary process that Freddie Mac uses to reimburse Servicers for property inspections related to insurance loss settlements in Eligible Disaster Areas.

We are announcing a new temporary process (see below) that Freddie Mac will use to reimburse Servicers for expenses incurred for any property inspection related to insurance loss settlements (“Insurance-Related Property Inspection”) as required in Section 8202.11, including those in Eligible Disaster Areas. With this change: • Servicers must discontinue using the temporary reimbursement process announced in Bulletin 2017-21 for inspections ordered in accordance with Section 8202.11. The process announced in Bulletin 2017-21 must only be utilized for disaster-related exterior property inspections completed in accordance with Section 8404.2. • We will reimburse Servicers for actual expenses incurred not to exceed $40 per required property inspection, including those in Eligible Disaster Areas and regardless of whether the property inspection is internal or external. Servicers may request reimbursement of expenses incurred for Insurance-Related Property Inspections above $40, but must provide documentation as to the reason for the additional expense. • We will reimburse Servicers for expenses incurred for Insurance-Related Property Inspections completed on both current and delinquent Mortgages. For delinquent Mortgages, Servicers should use the new temporary process for reimbursement requests for expenses incurred for Insurance-Related Property Inspections in lieu of the Expense Reimbursement system’s request for pre-approval (RPA) functionality. Required Insurance-Related Property Inspections 

In accordance with Section 8202.11, a Servicer is only required to complete an Insurance-Related Property Inspection under the following scenarios: Mortgaged Premises not located in an Eligible Disaster Area

Mortgaged Premises not located in an Eligible Disaster Area

If……And the Mortgage is current……And the Mortgage is delinquent…
Total insurance proceeds are less than or equal to $10,000>td

>td >If…

…And the Mortgage is current……And the Mortgage is delinquent…
Total insurance proceeds are greater than $10,000 but less than or equal to $40,000The Servicer must complete one final property inspectionThe Servicer must complete at least one final inspection + additional inspections each time additional funds are disbursed beyond the initial insurance loss draft distribution

Mortgaged Premises located in an Eligible Disaster Area

If……And the Mortgage is current……And the Mortgage is delinquent…
Total insurance proceeds are less than or equal to $20,000 >td >The Servicer must complete at least one final property inspection 

>td >Total insurance proceeds are greater than $40,000

Total insurance proceeds are greater than $20,000 but less than or equal to $40,000 >td
>td >The Servicer must complete at least one final property inspection + additional inspections each time additional funds are disbursed beyond the initial insurance loss draft distribution

New temporary reimbursement process The new temporary process for reimbursement of expenses incurred for required Insurance-Related Property Inspections is as follows: Servicers may temporarily submit reimbursement requests for expenses incurred for Insurance-Related Property Inspections once per month via an Excel® spreadsheet to NPL_Invoices@freddiemac.com. The e-mail subject line should reference "Insurance-Related Property Inspection expense reimbursement request," and the spreadsheet must include the following information for all Mortgages that the Servicer is seeking property inspection expense reimbursement for that month: 

• Freddie Mac loan number 

• Seller/Servicer payee code

• Expense code 404007 (Interior Property Inspection) 

• Amount of Total Insurance Proceeds 

• Reimbursement request amount • Property inspection expense date paid 

• Vendor name

If a Servicer is unsure of its Seller/Servicer Payee code, it may request that code by sending an e-mail to 104_Expense@freddiemac.com.

Fannie Mae - Announcement SEL-2018-07: Renaming of Property Inspection Waivers

Effective: September 4, 2018
Industry: Mortgage Lending
Source: Fannie Mae   Fannie Mae - Announcement SEL-2018-07 →
Tag: Property - Appraisal

The property inspection waiver (PIW) and property fieldwork waiver (PFW) names have been updated to “appraisal
waiver” throughout the Selling Guide to align with industry terminology. Currently, PIWs are offered on certain Desktop
Underwriter® (DU®) loan casefiles, and PFWs are offered on DU Refi Plus™ loan casefiles. Adopting the term appraisal
waivers will provide greater clarity and transparency about waiver offers. This is a terminology change only, and there are
no changes to our appraisal policy as a result of this renaming.

Fannie Mae - Announcement SEL-2018-07: Seller/Servicer Eligibility

Effective: September 5, 2018
Industry: Mortgage Lending
Source: Fannie Mae   Fannie Mae - Announcement SEL-2018-07 →
Tag: Application


With this month’s Part A consolidation, we have focused primarily on maintaining Fannie Mae seller/servicer status and
the submission of financial statements and reports. Although there have been no substantive changes to policy as a result
of this continued effort, we are highlighting the following:
 All content previously found in A1-1-01: Application and Approval of Seller/Servicer, has been eliminated from the
Selling Guide as it is considered to be pre-contractual in nature. Policy related to Special Seller/Servicer Approval
and the MSSC Addendum has been relocated to A2-1-01: Contractual Obligations for Sellers/Servicers. All other
information can be found on Fannie Mae’s website in the Path to Approval Toolkit.
 We clarified that a requirement of maintaining seller/servicer eligibility is that the circumstances and qualifications
that were in place for Fannie Mae’s consideration at the time of the lender’s approval must not adversely change
after approval.
 We also have specified sellers/servicers must send us 60 days’ advance written notice of any proposed major
change in its organization.
 In addition, we streamlined policy pertaining to minimum financial requirements, and consolidated fees and
financial covenants requirements into easy-to-read tables.

HMDA (Regulation C) - Partial Exemptions under section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act

Effective: September 7, 2018
Industry: Mortgage Lending
Source: CFPB   Final Rule →
Tag: Reg C HMDA

The rule

  • clarifies that insured depository institutions and insured credit unions covered by a partial exemption have the option of reporting exempt data fields as long as they report all data fields within any exempt data point for which they report data. 
  • clarifies that only loans and lines of credit that are otherwise HMDA reportable count toward the thresholds for the partial exemptions.
  • clarifies which of the data points in Regulation C are covered by the partial exemptions; 
  • designates a non-universal loan identifier for partially exempt transactions for institutions that choose not to report a universal loan identifier.
  • clarifies the exception to the partial exemptions for negative Community Reinvestment Act examination history.

Freddie Mac Bulletin 2018-13 Updates to the time frame for evaluating inquiries on the credit report

Effective: September 9, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Bulletin 2018-13 →
Tags: Underwriting, Credit - Liabilities

In response to Seller feedback and requests, we are reducing the required time frame for evaluating inquiries on the credit report from 120 days to 90 days.

Guide impact: Section 5202.6 

VA Modification Comparison Chart Now Available

Effective: September 10, 2018
Industry: Mortgage Servicing
Source: VA   VALERI Servicer Newsflash September 4, 2018 →
Tag: Loss Mitigation

Modification Comparison Chart – A chart summarizing the different VA modification options has been

created to provide additional clarification. 

It will be available at https://www.benefits.va.gov/HO... on Monday, September 10, 2018.

Delaware Amends Provisions Regarding Mortgagee Address Change

Effective: September 10, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Delaware   Delaware House Bill 353 →
Tag: Delaware

Summary

Section 1 of this Act clarifies that the intent of Senate Bill No. 32 of the 149th General Assembly was to require mortgagees to file a statement of mortgagee address change for mortgagees or assignees in any mortgage or assignment of mortgage when its notice address changed, not to require mortgagees to include each mortgage affected by a change of notice address. 

Status: (Passed) 2018-09-04 - Signed by Governor 

Delaware House Bill 353

Download

BCFP Revised FCRA Model Disclosure Forms

Effective: September 12, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: CFPB   Interim Final Rule →
Tag: Compliance - Initial Disclosures

The revised Summary of Consumer Rights is at: https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.docx

The revised Summary of Consumer Rights in Spanish is at: https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09_es.docx

The revised Summary of Consumer Identity Theft Rights is at: https://files.consumerfinance.gov/f/documents/bcfp_consumer-identity-theft-rights-summary_2018-09.docx

The revised Summary of Consumer Identity Theft Rights in Spanish is at: https://files.consumerfinance.gov/f/documents/bcfp_consumer-identity-theft-rights-summary_2018-09_es.docx 

The Bureau’s educational material for consumers on credit reports and credit scores is available at: https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/.

Fannie Mae Insured Loss Repair Inspection Reimbursement

Effective: September 15, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   SVC-2018-05 →
Tags: Property Preservation, Claims Processing
  • New expense reimbursement limit of $60 for required insured loss repair inspections applies to any insured loss repair inspection required and completed on or after July 18, 2018
  • Servicers may begin submitting requests for expense reimbursement for eligible inspection costs in the
    amount of up to $60 on September 15, 2018

FHA Updated Loss Mitigation for Puerto Rico and the U.S. Virgin Islands

Effective: September 15, 2018
Industry: Mortgage Servicing
Source: FHA   Mortgagee Letter 2018-05 →
Tags: Loss Mitigation, Disaster

Updated Loss Mitigation for mortgagees servicing mortgage loans for borrowers with FHA-insured mortgages whose property and/or place of employment is located in the Presidentially-Declared Major Disaster Areas (PDMDAs) of Puerto Rico Hurricane Maria DR-4339 or Virgin Islands Hurricane Maria DR-4340 and Disaster Foreclosure Moratorium for certain FHA-insured mortgages secured by properties located in areas of Puerto Rico and the U.S. Virgin Islands that the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) has declared to be eligible for Individual Assistance (Affected Counties) as a result of Hurricane Maria (Puerto Rico Hurricane Maria DR-4339 and Virgin Islands Hurricane Maria DR-4340). 

  • Mortgagees must evaluate Borrowers for a Disaster Standalone Partial Claim at the end of the Borrower’s Forbearance now that the Disaster Standalone Partial Claim is the first permanent home retention option in FHA’s disaster Loss Mitigation Waterfall. 
  • Mortgagees must also re-evaulate Borrowers under the new Disaster Standalone Partial Claim policy if they have not entered into a permanent Loss Mitigation Option since the disaster. 
  • Borrowers who do not meet the criteria for a Disaster Standalone Partial Claim or a Disaster Loan Modification following Disaster forbearances or who have a continuous reduction in income or increase in living expenses must be considered for an FHA-HAMP option under the Loss Mitigation Option Priority Waterfall in Section III of the FHA Single Family Housing Policy Handbook 4000.1.

Mortgagees may no longer offer the Loss Mitigation options in this Mortgagee Letter to borrowers on or after May 1, 2019, which is the Sunset Date for the Mortgagee Letter. 

Annual Privacy Notice Exemption under the Gramm-Leach-Bliley Act (Regulation P)

Effective: September 16, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: CFPB   Final Rule →
Tags: Privacy, Periodic Statements
  • The rule provides an exception under which financial institutions that meet certain conditions are not required to provide annual privacy notices to customers. 
  • To qualify for this exception, a financial institution must not share nonpublic personal information about customers except as described in certain statutory exceptions. 
  • The rule requires that the financial institution must not have changed its policies and practices with regard to disclosing nonpublic personal information from those that the institution disclosed in the most recent privacy notice it sent.
  • Provides timing requirements for delivery of annual privacy notices in the event that a financial institution that qualified for this annual notice exception later changes its policies or practices in such a way that it no longer qualifies for the exception. 
  • Removes the Regulation P provision that allows for use of the alternative delivery method for annual privacy notices because the Bureau believes the alternative delivery method will no longer be used in light of the annual notice exception.

Freddie Mac Servicing Bulletin 2018-14 Additional Guide Updates and Reminders

Effective: September 18, 2018
Industry: Mortgage Servicing
Source: Freddie Mac   Freddie Mac Servicing Bulletin 2018-14 →
Tags: Insurance, Condominiums, Disaster

Form 479A, Single-Family Servicing Agent Certification and Agreement With the increase in market adoption of eMortgages, they will become a larger portion of a Servicer’s portfolio. Therefore, we are updating Form 479A to incorporate references to eMortgages and the eMortgage Guide. We are additionally:

 • Changing the title of Form 479A to add “Agreement” to emphasize that a Master Servicer and its certified Servicing Agent are agreeing to various terms and conditions set forth in the form 

• Updating the language governing the agreement’s expiration date Guide impacts: Sections 2404.7, 7101.2, 8102.1, 8102.2 and Form 479A

Instructions for payment of fees from insurance loss proceeds to public adjusters or other third parties To align our requirements with uniform security instruments, we are updating the Guide to expressly prohibit payment of fees out of the insurance loss proceeds to any public adjuster or other third party retained by the Borrower to assist with the recovery of those proceeds, unless agreed to by Freddie Mac in writing. Guide impact: Section 8202.11

Condominium Project insurance updates from Bulletin 2018-13 We are notifying Servicers of the following Condominium Project insurance changes announced in Bulletin 2018-13. Servicers may apply these changes to all Mortgages that they currently service for Freddie Mac, including those purchased prior to the effective date of Bulletin 2018-13.

Property, flood, liability or employee dishonesty insurance In response to Seller/Servicer inquiries, we have updated our requirements for property, flood, liability and fidelity or employee dishonesty insurance in Sections 8202.2, 8202.3, 8202.5 and 8202.6 to: • Allow a Condominium Unit, including a Condominium Unit in a 2- to 4-unit Condominium Project, to be insured through an individual property insurance policy, in lieu of the condominium homeowners association (HOA) policy, if the condominium governing documents require. Common elements must be covered through the condominium HOA policy. • Allow a Condominium Unit in a 2- to 4-unit Condominium Project to be insured through an individual policy, in lieu of the condominium HOA policy, for flood insurance, if the condominium governing documents require • Waive the liability insurance requirements for: ➢ Condominium Projects reviewed under the streamlined project review type ➢ Detached Condominium Unit Mortgages reviewed under the Detached Condominium Project review type ➢ Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages meeting the requirements of Section 5701.2(c) 

➢ 2- to 4-Unit Condominium Projects that meet certain requirements ➢ Freddie Mac Relief Refinance MortgagesSM – Same Servicer, Freddie Mac Relief Refinance MortgagesSM – Open Access and Freddie Mac Enhanced Relief Refinance® Mortgages • Waive the fidelity or employee dishonesty insurance requirements for: ➢ Condominium Projects reviewed under the streamlined project review type ➢ Detached Condominium Unit Mortgages reviewed under the Detached Condominium Project review type ➢ Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages meeting the requirements of Section 5701.2(c) ➢ Freddie Mac Relief Refinance Mortgages – Same Servicer, Freddie Mac Relief Refinance Mortgages – Open Access and Freddie Mac Enhanced Relief Refinance Mortgages

Increased deductible for Condominium Projects Previously, the condominium homeowners association’s policy deductible for damage due to fire, water (not caused by flooding) or wind could not exceed 5% of the limit maintained for building coverage. We have updated Section 8202.2 to allow Condominium Projects to have a higher deductible if it exceeds 5% due to a per unit deductible for named perils specific to a geographic area provided that the unit owner’s HO-6 policy meets certain requirements.

Fannie Mae Servicing Guide Announcement SVC-2018-06, Delegating Texas Constitution Section 50(a)(6) for Fannie Mae Cap and Extend Modification for Disaster Relief

Effective: September 18, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Fannie Mae   Servicing Guide Announcement SVC-2018-06 →
Tags: Disaster, Texas

We are updating D2-3.2-07, Fannie Mae Cap and Extend Modification for Disaster Relief to remove the requirement that the servicer must obtain Fannie Mae’s prior approval for a mortgage loan modification of a Texas Constitution Section 50(a)(6) loan.

A Texas Constitution Section 50(a)(6) loan will be eligible for a Fannie Mae Cap and Extend Modification for Disaster
Relief if

 the eligibility parameters for a Fannie Mae Cap and Extend Modification for Disaster Relief are satisfied, and
 the mortgage loan is modified in accordance with applicable law.

Effective Date
This policy change is effective immediately.

Fannie Mae Servicing Guide Announcement SVC-2018-06, Updates to Post-Delivery Servicing Transfer Requirements

Effective: September 18, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   Servicing Guide Announcement SVC-2018-06 →
Tag: Servicing Transfers

In an effort to clarify our requirements related to post-delivery servicing transfers, A2-7-03, Post-Delivery Servicing Transfers and F-1-11, Post-Delivery Servicing Transfers have been updated to
 clarify specific responsibilities
• for the transfer of servicing related to an eMortgage loan;
• of the transferor and transferee servicer related to notifying the document custodian; and
• of the master servicer and subservicer, as applicable, when preparing a mortgage loan assignment; and
 require that the transferee servicer contact its Fannie Mae Servicing Representative for further discussion and resolution in the event it cannot complete recertification of the transferred mortgage loans and cannot cure an exception to recertification within six months of the transfer date.

Some updates in this policy change may not be applicable to reverse mortgage loans. Servicers must continue to comply with servicing requirements in the Guide for reverse mortgage loans to the extent such requirements are not in conflict with the provisions contained in the Reverse Mortgage Loan Servicing Manual.

Effective Date
These policy clarifications are effective immediately.

Fannie Mae Servicing Guide Announcement SVC-2018-06, Miscellaneous Revisions

Effective: September 18, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   Servicing Guide Announcement SVC-2018-06 →
Tags: Foreclosure, Loss Mitigation, Disaster

Updates to eMortgage Loans*. E-1.2-02, Timing of the Foreclosure Referral for Mortgage Loans Generally has been updated to remove the requirement for servicers to contact Fannie Mae prior to foreclosing on an eMortgage loan.

Fannie Mae Flex Modification Update*. We are updating D2-3.2-09, Fannie Mae Flex Modification to incorporate the eligibility criteria related to a property impacted by an eligible disaster, as previously communicated in Lender Letter LL2017-09, Fannie Mae Extend Modification for Disaster Relief and Other Clarifications for Mortgage Loans Impacted by Disaster Events.

Automatic Reclassification Process for MBS Mortgage Loans*. The Servicing Guide has been reorganized to more accurately reflect our automatic reclassification process for MBS mortgage loans in the following topics:

 A1-3-06: Automatic Reclassification of MBS Mortgage Loans
 D2-3.1-02: Conditions of a First and Second Lien Mortgage Loan Modification for an MBS Mortgage Loan
 D2-3.2-01: Forbearance Plan
 F-1-28: Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan

Maintaining Seller/Servicer Eligibility. As part of our continued efforts to simplify Part A content shared by the Selling and Servicing Guides, this month we focused on maintaining Fannie Mae seller/servicer status. While the Servicing Guide already refers to the Selling Guide for this policy, we have clarified that sellers/servicers must send us 60 days’ advance written notice of any proposed major change in its organization as part of this release. See Selling Guide Announcement SEL-2018-07 and Selling Guide A4-3-01, Report of Changes in the Seller/Servicer’s Organization for additional information.

Effective Date
The policy clarifications and updates described in this section are effective immediately.

Freddie Mac Selling Bulletin 2018-15, Self-Employment Income

Effective: September 19, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling Bulletin 2018-15 →
Tags: Underwriting, Income

We are updating our requirements to state that when self-employment is disclosed in the Mortgage file but is not used to qualify for the Mortgage, the Seller is not required to obtain any additional documentation or evaluate the income or loss from the self-employment for each Borrower who:

• Has a primary source of income, other than self-employment, used for qualifying the Mortgage (e.g., salaried income from primary employment), and
• Is self-employed, and the self-employment income is a secondary source of income
Guide impact: Section 5304.1

Freddie Mac Selling Bulletin 2018-15, Additional Guide Updates

Effective: September 19, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling Bulletin 2018-15 →
Tags: Property - Appraisal, Underwriting, Credit - Liabilities

Property condition
To help Sellers better identify property condition issues, we are providing:
• Examples of the types of conditions that would cause a property to be identified with a C5 or C6 condition rating
• Additional examples of acceptable minor needed repairs or deficiencies, or deferred maintenance items that do not need to be repaired. If these conditions are identified Freddie Mac allows an appraisal report to be completed “as is,” provided the appraiser has appropriately adjusted for the conditions when necessary.
Guide impacts: Sections 5601.5 and 5601.12

Special Borrower eligibility – Mortgaged Premises occupied by Borrower’s parent or disabled child

In response to Seller requests and to address needs in the market, we are adding new Section 5103.8 to the Guide to provide for when a Borrower may be considered an occupying Borrower if the Mortgaged Premises is occupied as a Primary Residence by an individual(s) who:

• Is the Borrower’s parent(s), or
• Has a physical or developmental disability and the Borrower is the individual(s)’s parent or legal guardian

For Loan Product Advisor submissions, in the “Declarations” section, the Seller may select “Yes” for the question, “Does the Borrower intend to occupy the property as his/her primary residence?”.
Guide impact: Section 5103.8

Inquiries on the credit report

Effective September 9, 2018

In Bulletin 2018-13, we announced we were reducing the required time frame for evaluating inquiries on the credit report from 120 days to 90 days. The Loan Product Advisor feedback message was updated September 9, 2018 to reflect this change. We are updating Section 5201.1 to align with the reduced time frame.
Guide impact: Section 5201.1

RHS - PN 516 Updates to Handbook 1-3555

Effective: September 19, 2018
Industry: Mortgage Lending
Source: USDA   RHS - PN 516 Updates to Handbook 1-3555 →
Tags: Underwriting, Income

Announces updates to HB-1-3555 Chapter 9: Chapter 9 was streamlined to provide a more efficient format with greater clarification for all income types. The guide will be updated.

See update for all changes.

Chapter 9:
References to “qualifying” income are revised to “eligibility” income as applicable for annual income.
Paragraph 9.4, all subsections A through E are removed. This guidance was added to Attachment 9-A.
Paragraph 9.5, All subsections A through E are removed. This guidance was added to Attachment 9-A.
Paragraph 9.7, “Documenting Repayment Income” is removed.
Paragraph 9.8, “Agency Review of Repayment Income” is renumbered to Paragraph 9.9.
Paragraph 9.9, “Overview for Repayment Income” is renumbered to Paragraph 9.7.
Paragraph 9.10, “Stable and Dependable Income” is renumbered to Paragraph 9.8.
All subsections A through D are removed and has been add to Attachment 9-A.
Paragraph 9.12, “Documenting Repayment Income” is removed. This guidance was added to Attachment 9-A.
Paragraph 9.13, “Optional Documentation of Income” is renumbered to Paragraph
9.10.
A new matrix, Attachment 9-A, provides an encompassing resource for income, adjusted annual income deductions, and assets. The matrix includes guidance for the treatment of income and assets specifically for annual and repayment income consideration.
Attachment 9-A has been renumbered to Attachment 9-B “Income and Documentation Worksheet.” 

Attachment 9-B has been renumbered to Attachment 9-C “Case Study: Income Calculation Worksheet.”
Attachment 9-C has been renumbered to Attachment 90-D “Annual Income, Excluded Sources” and Attachment 9-D “Julian Calendar” has been removed.
REMOVE INSERT
Chapter 9 dated 03-09-16: Chapter 9 dated 03-09-16: Pages 9-1 thru 9-52, Pages 9-1 thru 9-10, Attachments 9-A, 9-B, 9-C, Attachments 9-A, 9-B, 9-C,
9-D and 9-F. 9-D and 9-F revised 09-19-18.

DU 10.2 Release

Effective: September 22, 2018
Industry: Mortgage Lending
Source: Fannie Mae   Release Notes →
Tag: Underwriting

During the weekend of Sept. 22, we will implement an update to DU 10.2 that includes the new high loan-to-value (LTV) refinance option, a DU validation service modification, and additional updates to align with the Selling Guide. These changes will apply to DU loan casefiles submitted or resubmitted on or after the weekend of Sept. 22 (however, only limited cash-out refinance loan casefiles created on or after Nov. 1 will be eligible for the high LTV refinance option). Read the release notes for more details.

Florida LO Licensing Fee Waiver for Military Members

Effective: September 25, 2018
Industry: Mortgage Lending
Source: Florida   Rule 69V-40.002 →
Tags: Florida, Licensing
  • Persons wishing to obtain a waiver of licensure fees as set forth in section 494.00312(8), F.S., shall submit to the Office of Financial Regulation, via electronic filing through the Registry, a completed Office of Financial Regulation Active Military Member/Veteran/Spouse Fee Waiver and Military Service Verification, Form OFR-MIL-001, effective 09-2018, which is hereby incorporated by reference, and also incorporated by reference in rule 69V-40.002, F.A.C., and available at http://www.flrules.org/Gateway/reference.asp?No=Ref-09912. 
  • Such form must be submitted within one hundred eighty (180) days after payment of licensure fees. For the complete processing of Form OFR-MIL-001, a loan originator application must be deemed received pursuant to the provisions of section 494.00312(3), F.S.

Fannie Mae - Announcement SEL-2018-07: Misc

Effective: September 30, 2018
Industry: Mortgage Lending
Source: Fannie Mae   Fannie Mae - Announcement SEL-2018-07 →
Tags: Insurance, Condominiums

Single-Entity Ownership of Co-op Projects
On June 5, 2018, several updates were made to our condo and co-op policies. At that time, we made changes to the
single-entity ownership policy for condo and co-op projects. However, this update is to address a change that was
inadvertently overlooked during that Guide update. Specifically, the 10% single-entity ownership policy for co-ops has
been changed to 20%, as previously announced.

Approved Mortgage Insurers List and Mortgage Insurance Forms

We have updated the Approved Mortgage Insurers and Related Identifiers to remove United Guaranty Mortgage
Indemnity Company. UG Indemnity, an Arch Group company, was placed in run-off effective September 2017 and has
not accepted mortgage insurance applications since that time. Arch intends to merge UG Indemnity into United Guaranty
Residential Insurance Company (UGRIC) effective September 30, 2018, at which time UG Indemnity will no longer exist;
insurance written to date will remain with UGRIC as the surviving entity. There is no impact to the use of MI Code 12 or
the ULDD Enumerated Value (UGI) delivered by lenders to identify loans insured by UGRIC. If we change our delivery
requirements in the future, we will provide advance notice to lenders.
The list of Approved Mortgage Insurance Forms has also been updated with the following:
Form/Version No. Update
EGI-1003.001 (09/17)
New Essent Guaranty, Inc. Declaration Page (with Texas Disclosure of Guaranty Fund
Nonparticipation)
MP1480-END-8 (6/18)
New Genworth Mortgage Insurance Corporation Home Suite Home Supplemental
Coverage Program Endorsement;
 71-70380 (11/17)
 71-70381 (7/18)
New Mortgage Guaranty Insurance Corporation documents:
 Multiple Loan Coverage Endorsement.
 Commitment/Certificate (for Multiple Loan Coverage Endorsement)
 RAF509, 4/17
 RAF510, 8/17
New Radian Guaranty, Inc. endorsements:
 Signatory Change Endorsement,
 Address Change Endorsement
CJA 3117 02/17, DMA 3118
02/17
New United Guaranty Residential Insurance Company Definition of Residential
Endorsement. .
Removed United Guaranty Mortgage Indemnity Company