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GSEs Announce Updates to Selling Guide

Fannie Mae released Selling Guide Announcement (SEL-2022-01) on February 2, 2022, to announce recent changes to their Selling Guide, including the following:

Desktop Appraisal – The new release for Desktop Underwriter will allow the use of Form 1004 Uniform Residential Appraisal Report (Desktop) for specific types of purchase transactions of one-unit principal residences with LTV ratios less than or equal to 90%. Effective March 19, 2022.

Homestyle Renovation – Updates require that Homestyle Renovation work be completed within 15 months of the closing date with extensions only being permitted due to extenuating circumstances beyond the borrower’s control. Additional information is provided in Servicing Guide Announcement (SVC-2022-01). Effective May 1, 2022.

Loan-level price adjustment credit for sale of HomePath properties – Fannie Mae will issue a $500 loan-level price adjustment credit to lenders to reimburse borrowers for the cost of an appraisal when specific eligibility requirements are met. Effective February 2, 2022.

Asset documentation for certain refinances underwritten in DU – Assets will not have to be documented when funds required to be verified are $500 or less. The policy does not apply to manually underwritten loans. Effective in DU Version 11.0 as of March 19, 2022.

Clarification of anti-money laundering provisions of the Bank Secrecy Act – Seller/servicers are required to report to Fannie Mae instances where the seller/servicer has been subject to penalties or enforcement activities for compliance failures or violations related to anti-money laundering regulatory requirements.

Loan secured by properties located in Guam – Delivery of mortgages for properties located in Guam are no longer required to be specifically negotiated, so lenders will no longer see the restriction in Desktop Underwriter. Effective February 2, 2022, with message to be removed from Desktop Underwriter as of March 19, 2022.

Freddie Mac released Bulletin 2022-2 on February 2, 2022 to announce recent changes to their Selling Guide, including the following:

Desktop Appraisals – For Loan Product Advisor submissions on or after March 6, 2022, a desktop appraisal will be accepted for certain purchase transactions and must be completed the Uniform Residential Appraisal Report (Form 70D) Eligibility requirements can be found Selling Guide Section 5601.7. Clarification is also provided for determining automated collateral evaluation (ACE) appraisal waiver eligibility. Effective March 6, 2022.

Quality Control – The selling guide has been updated to state that documentation of income, employment or sources of funds used in the original underwriting process received from a third-party service provider designated by Freddie Mac is not required to be reverified if the report was accessed directly from the service provider’s electronic database and there is no evidence of misrepresentation in any part of the underwriting. Effective February 2, 2022.

Income and Assets – Tax Returns. Updates have been made for age of tax return requirements for the 2020 tax year, to reflect dates specific to the 2021 tax year. The updates include requirements applicable in the event of a future IRS filing due date extension, replacing previous requirements based on the IRS filing due date extension issued in May 2021. Effective February 2, 2022.

Income and Assets – Home Equity Line of Credit (HELOC). Updates have been made to specify that a HELOC is considered an eligible source of funds towards a down payment, closing costs and reserves, provided that the mortgage file includes evidence that the HELOC is secured by the borrower’s real property and proceeds have been disbursed. Effective February 2, 2022.

User Forms and Certificates – Announcement of retirement of specific Loan Selling Advisor authorized user and certification forms and updates to certificate of incumbency forms. Additionally, the Affordable Merit Rate Mortgage Note and Rider have been retired and removed from published Uniform Instruments.

 

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Topics from this blog: Compliance CFPB

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