Compliance Calendar
Your Financial Credit & Compliance Research Library.
Your Financial Credit & Compliance Research Library.
Effective: | June 1, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae SEL-2019-02 → |
Tag: | Underwriting |
As a result of the adjustment to the credit risk assessment in Desktop Underwriter® (DU®) Version 10.3, we are making corresponding updates to our eligibility requirements for manually underwritten loans. These updates address loans with multiple risk factors, such as lower credit scores and higher debt-to-income ratios. The changes reflect our continued effort to deliver access and affordability while maintaining sustainable homeownership.
These changes did not impact any topics in the Selling Guide; however, we have updated the Eligibility Matrix (which is incorporated by reference into the Guide). For ease of reference, we have shaded the rows where changes were made in the two matrices that apply to manually underwritten loans in Attachment 2 of this Announcement. Refer to the updated Eligibility Matrix for complete details.
Lenders may implement these changes immediately but are required to do so for loans with application dates on or after June 1, 2019 and may deliver loans meeting the prior requirements through August 19, 2019.
Effective: | June 3, 2019 |
Industry: | Mortgage Lending, Mortgage Servicing |
Source: | Freddie Mac SINGLE SECURITY INITIATIVE → |
Tags: | Certification, Endorsement, and Delivery, Servicing Transfers |
On February 28, 2019, the FHFA issued a final rule supporting the Uniform Mortgage-Backed Security (UMBS™). As outlined in the final rule, the FHFA instructed Freddie Mac and Fannie Mae to modify and align their pooling practices for fixed-rate Mortgages to enhance UMBS fungibility.
As a result, on March 5, 2019, Freddie Mac issued an Industry Letter announcing changes to the Note Rate to Coupon spreads and a reduction in the maximum Servicing Spread for Mortgages serving as collateral for UMBS and MBS, effective for Mortgages sold under Freddie Mac's fixed-rate Guarantor or MultiLender Swap program with Settlement Dates on or after June 3, 2019. This Bulletin updates the Guide to reflect these required changes.
The FHFA has also instructed Freddie Mac and Fannie Mae to monitor the Weighted Average Coupon (WAC) of MBS and take actions as appropriate such that MBS WAC would be generally consistent with historical WAC levels. The FHFA, Freddie Mac and Fannie Mae are working to determine an appropriate target MBS WAC, such as 80 basis points or slightly higher (given current guarantee fees and minimum servicing levels).
As a reminder, Bulletin 2018-24 communicated that effective for contracts taken out on or after April 19, 2019 for Mortgages with Settlement Dates on or after June 3, 2019, Sellers will be able to take out guarantor contracts, including the new 10-year guarantor contract, in Loan Selling Advisor® to deliver Mortgages into a UMBS or an MBS. Sellers will be able to take out Gold PC contracts for Mortgages with Settlement Dates prior to June 3, 2019. For more information on the Loan Selling Advisor changes, refer to the April 3, 2019 Single-Family News Center article.
For more information on the Single Security Initiative ("Initiative"), refer to the Single Security and the Common Securitization Platform web page and Bulletin 2018-24 that announced Guide updates reflecting other Initiative required changes, including new naming conventions for the securities Freddie Mac will issue beginning June 3, 2019 and the payment delay for these securities.
Guide impacts: Sections 6201.3, 6202.3, 6203.3, 6203.7, 6205.3, 6205.7 and 8105.1
Effective: | June 3, 2019 |
Industry: | |
Source: | Fannie Mae SEL-2019-04 → |
Tag: | Secondary |
In further preparation of the implementation of the Single Security initiative, we are updating the Selling Guide to include references to TBA-eligible Uniform Mortgage-Backed Securities (UMBS), where applicable. Changes to the Guide include the following:
▪ a new definition of UMBS to the glossary; and
▪ an explanation of the structured transaction “Supers,” or the pass-through securities backed by groups of existing UMBS or other existing Supers.
We also made updates to reflect the changes to interest rate spreads and servicing fees as previously announced in LL2019-03. For additional information on the forward trading of UMBS, you may also refer to this Selling Notice.
In addition to these UMBS updates, we added a reference to the availability of lenders’ MBS trade details via Fannie Mae’s electronic trading platform and removed outdated policies regarding stated-structure ARM MBS.
Effective Date
These changes are effective June 3, 2019 with the implementation of UMBS.
Effective: | June 3, 2019 |
Industry: | Mortgage Lending |
Source: | Freddie Mac Freddie Mac Selling Guide Bulletin 2018-24 → |
Tag: | Certification, Endorsement, and Delivery |
Effective for contracts taken out on or after April 19, 2019 with Settlement Dates on or after June 3, 2019
In support of the Single Security Initiative ("Initiative"), Freddie Mac is updating its Guide to reflect changes required by the Initiative, including new naming conventions for the securities Freddie Mac will issue beginning June 3, 2019 and the payment delay for these securities.
Under the Initiative, Freddie Mac and Fannie Mae ("GSEs") will issue a common to-be-announced (TBA)-eligible Mortgage-backed security backed by fixed-rate Mortgages on one- to four-unit single-family properties. This new security, the Uniform Mortgage-Backed SecurityTM (UMBSTM), will combine key components of Freddie Mac's Participation Certificates (PCs) and Fannie Mae's mortgage-backed securities (MBS). The goal of the Initiative is to increase the liquidity of the TBA market and to reduce the disparities in trading value that exist today between Freddie Mac's and Fannie Mae's single-class mortgage-backed securities.
As part of the Initiative, Freddie Mac is adopting the 55-day payment delay for all of its new issues of single-family fixed-rate securities. As a result, Freddie Mac will no longer issue Gold PCs beginning June 3, 2019.
Additional changes include:
The naming convention for WAC ARM PCs will not change and these securities will continue to have a payment delay of 75 days.
These changes are summarized in the following table:
Current and future Freddie Mac securities under the Guide*
Level of securitization | Current | New products with the implementation of the Single Security Initiative | Notes |
Level 1 | Gold PCs (45-day, fixed-rate, TBA eligible and non-TBA eligible |
| Freddie Mac will stop issuing Gold PCs beginning on June 3, 2019 |
WAC ARM PCs (75-day, adjustable rate) | N/A | Freddie Mac will continue to issue WAC ARM PCs (75-day, adjustable-rate) | |
Level 2 | Giant PCs (45-day, fixed-rate, TBA eligible) | Supers** (55-day, fixed-rate, TBA eligible) **Supers is a re-securitization of UMBS | Freddie Mac will stop issuing Giant PCs under the Guide beginning on June 3, 2019 |
*This table presents only the securities available for issuance under the Guide
With this Bulletin, we are incorporating the new naming conventions described above. Impacted terms of business (TOBs) will be updated to align with the Guide changes described in this Bulletin. This Bulletin serves as notice to Sellers that impacted TOBs in their contracts will be amended by April 19, 2019. In addition to the Guide and TOB changes, the new naming conventions will be reflected in Freddie Mac's documentation, disclosures and marketing materials with the implementation of the Initiative.
In preparation for the Initiative, we are making the following Guide changes:
To help ensure a smooth transition to this new market, Sellers should:
Sellers will be able to take out guarantor contracts, including the new 10-year guarantor contract, in Loan Selling Advisor® to deliver Mortgages into a UMBS or an MBS beginning on April 19, 2019 for Mortgages with Settlement Dates on or after June 3, 2019. Sellers will be able to take out Gold PC contracts for Mortgages with Settlement Dates before June 3, 2019.
For 10-year Mortgages that are sold through Cash-Released XChangeSM, participating Servicers will be able to bid for the Servicing Contract Rights based on 10-year cash pricing. At this time, 15-year pricing applies to 10-year Mortgages. Servicers participating in Cash-Released XChange should incorporate this change to their pricing and business processes as appropriate.
Additional resources and Guide impacts
Sellers should refer to the Seller/Servicer Readiness Checklist for important dates and additional resources.
Refer to the Guide Updates Spreadsheet for the impacted Guide provisions.
Effective: | June 5, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae Selling Guide Announcement SEL-2019-05 → |
Tags: | Underwriting, Income |
Effective: | June 5, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae Selling Guide Announcement SEL-2019-05 → |
Tags: | Application, Closing |
Effective: | June 5, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae Selling Guide Announcement SEL-2019-05 → |
Tag: | Secondary |
We are introducing a new special feature code (SFC) 861 that must be delivered on all loans that have documents that were remotely notarized as part of an electronic notarization.
Lenders may begin using SFC 861 immediately; but must do so for loans delivered on or after September 1, 2019. The Special Feature Codes list has been updated to include SFC 861.
Effective: | June 5, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae Lender Letter LL-2019-06 → |
Tags: | Underwriting, Income |
On July 3, 2019 the Selling Guide will be updated to reflect the HomeReady 80% AMI limit.
The new limits and the 80% AMI change will apply to manually underwritten loans with application dates on or after July 20, 2019.
Effective: | June 5, 2019 |
Industry: | Mortgage Lending |
Source: | Freddie Mac → |
Tags: | Condominiums, Underwriting, Insurance |
This Guide Bulletin announces:
Condominiums
Credit underwriting and Mortgage eligibility
Private flood insurance
Form 65 – Demographic Information Addendum
Mortgages with Electronic Documentation
UMBS and MBS with Coupons not divisible by 0.5% and fixed-rate assumable products
Additional Guide updates
EFFECTIVE DATE
All of the changes announced in this Bulletin are effective immediately unless otherwise noted.
See Bulletin 2019-11 for specific details.
Effective: | June 6, 2019 |
Industry: | Mortgage Lending |
Source: | Freddie Mac Selling Update 2019-5 → |
Tags: | Underwriting, Assets |
LENDER INCENTIVES
Effective for Mortgages with Settlement Dates on or after June 6, 2019
Currently, we do not place any restrictions on lender incentives (e.g., gift cards given by the Seller to the Borrower before, at or after Mortgage closing) except when the Mortgage is a Freddie Mac Relief Refinance MortgageSM.
We are revising our requirements for all Mortgages, except Relief Refinance Mortgages – Same Servicer and Relief Refinance Mortgages – Open Access, to state that lender incentives will only be permitted when the following requirements are met:
The incentive is not considered cash out to the Borrower and does not have to be included in the calculation of the proceeds of the Mortgage.
Guide impacts: Sections 4304.6, 5501.1 and 5501.6
Effective: | June 7, 2019 |
Industry: | Mortgage Lending, Mortgage Servicing |
Source: | West Virginia Alert → |
Tags: | West Virginia, Licensing, Fees |
Amends the requirements for regulated consumer lending in the state to provide that a person making or taking assignment of consumer loans, or “undertaking direct collection of payments,” must first be licensed by the state’s Commissioner of Banking.
Among other things, the act also adjusts the threshold amounts “for which certain finance charges can be imposed” on consumer loans, including revolving loan accounts. For instance, (i) on loans less than $3,500 that are not secured by real property, the finance charge “may not exceed 31 percent per year on the unpaid balance of the principal amount”; and (ii) on loans between $3,500 and $15,000, the finance charge “may not exceed 27 percent per year on the unpaid balance of the principal amount.”
The act also provides restrictions relating to when finance charges may be imposed again, and states that, in certain cases, the “financing of [] charges is permissible and does not constitute charging interest on interest.”
The act further clarifies that the new licensing provisions exclude “any collection agencies as defined and licensed by the West Virginia Collection Agency Act of 1973.”
Effective: | June 10, 2019 |
Industry: | Mortgage Lending |
Source: | Freddie Mac Selling Guide Bulletin 2019-9 → |
Tag: | Secondary |
In response to Seller feedback, we are introducing an automated process in Loan Selling Advisor to provide Sellers with the capability to extend the expiration date for Mandatory Cash Contracts. Section 6101.3(f) describes the requirements for extending a Mandatory Fixed-Rate Cash Contract and Section 6102.4(f) for Mandatory WAC ARM Cash Contract extensions.
In addition, for Best Efforts Contracts, relock functionality will be available in Loan Selling Advisor. Requirements for performing a Best Efforts Contract relock are described in Section 6101.4(e).
The Best Efforts extension language for contracts that are unfulfilled for more than 30 days is being deleted from Section 6101.4(d) as it is no longer permitted.
Guide Forms 900 and 900SA are being updated to clarify existing, and reflect added functionality, as applicable, to the Secondary Analyst and Cash SMO user roles.
For additional information refer to the April 23, 2019, Single-Family News Center article. Guide impacts: Sections 6101.3, 6101.4, 6102.4, Forms 900 and 900SA
Effective: | June 11, 2019 |
Industry: | Mortgage Lending |
Source: | VA Circular 26-19-13 → |
Tag: | Underwriting |
Effective: | June 12, 2019 |
Industry: | Mortgage Servicing |
Source: | Fannie Mae SVC-2019-04 → |
Tags: | Payoffs-Reconveyances, Servicing, Foreclosure, Loss Mitigation |
Simplification of Partial Releases
To simplify requirements related to evaluating partial release requests and to reduce case submissions requiring our approval, D1-1-01, Evaluating a Request for the Release, or Partial Release, of Property Securing a Mortgage Loan, and the related procedures in F-1-04, Processing a Request for the Release of Property Securing a Mortgage Loan, have been updated to clarify eligibility and documentation requirements. Additionally,
The Application for Release of Security (Form 236) has also been streamlined for easier use.
Servicers evaluating a borrower request for release or partial release related to reverse mortgage loans must obtain approval from their Reverse Mortgage Loan Servicing Representative (see Reverse Mortgage Loan Servicing Manual 7-03, List of Contacts).
Effective Date Servicers are encouraged to implement these policy changes immediately, but must do so for all release requests received on or after October 1, 2019.
Miscellaneous Revisions
Updating Internal Records After a Regular or Special Servicing Option MBS Mortgage Loan Reclassification. Currently, F-1-26, Reclassifying or Voluntary Repurchasing an MBS Mortgage Loan requires that after an MBS mortgage loan has been reclassified, servicers must update their internal records to reflect the remittance type as actual/actual as of the first day of the month in which the reclassification event takes place. However, after a regular or special servicing option MBS mortgage loan has been reclassified, servicers are also currently updating their internal records to adjust
We have updated the Guide to reflect these specific actions.
Determining the New PTR after an Adjustable Rate Mortgage (ARM) Adjustment. Investor Reporting Manual 5-02, Calculations Related to Pass-through Rates has been updated to state that when determining the minimum PTR using the “bottom-up” calculation method, in the absence of a stated PTR floor, our required margin becomes the PTR floor. While the Selling Guide states the mortgage interest rate may never decrease to less than the ARM’s margin and because the PTR is a byproduct of the mortgage interest rate, we received feedback that this clarification in the “bottom-up” calculation would benefit servicers.
Reminder of Fannie Mae Extend Modification for Disaster Relief
With LL-2017-09, Fannie Mae Extend Modification for Disaster Relief and Other Clarifications for Mortgage Loans Impacted by Disaster Events, we introduced the Fannie Mae Extend Modification for Disaster Relief (Extend Mod), developed jointly with Freddie Mac at the direction of the Federal Housing Finance Agency (FHFA). While most policies introduced in LL-2017-09 have since been incorporated into the Guide, servicers are reminded that the policy related to Extend Mod remains in effect until we provide further notice.
Effective: | June 12, 2019 |
Industry: | Mortgage Servicing |
Source: | Freddie Mac Bulletin 2019-12 → |
Tags: | Bankruptcy, Foreclosure, Loss Mitigation, Delinquent Loans, Servicing, Escrow-Impounds |
EDR CODES
Servicers will no longer be required to report EDR default action code 20 to reinstate a loan except when Servicers accept a partial reinstatement and need to change the mortgage status from "Foreclosure" to "Delinquent." We also are renaming the code to EDR default action code 20 (Reinstatement (Partial)).
EDR default action code TM
We are removing references to EDR default action code TM (Alternative Modification Trial Period). Servicers are reminded that they should use EDR default action code BF (Freddie Mac Standard Modification Trial Period) to report all Trial Period Plans, including those for the Freddie Mac Flex Modification® that were offered under streamlined eligibility criteria.
EDR default action code H5
We are updating references to EDR default action code H5 (Complete Borrower Response Package Received). Servicers will no longer be required to use this code to notify Freddie Mac of receipt of a complete Borrower Response Package, but are still encouraged to do so.
SUBSEQUENT TRANSFERS OF SERVICING REQUIREMENTS
We are updating the Guide to include requirements for Subsequent Transfers of Servicing for a Mortgage registered with MERS®. The requirements that apply to Concurrent Transfers of Servicing for Mortgages registered with MERS also apply to Subsequent Transfers of Servicing.
ESCROW
We are updating the Guide to clarify that if a Servicer advances funds for an unpaid Escrow charge and is unable to reach a mutually satisfactory agreement for the Borrower's repayment of the advance, or if the Borrower fails to comply with the terms of any such arrangement, the Servicer must comply with the collection, loss mitigation, and if necessary, foreclosure referral requirements in accordance with Guide Chapters 9101 or 9102, as applicable.
EXHIBIT 33
We are updating the definition of "Release" in Exhibit 33, to address situations where a Secured Party's interests arising out of or related to the Collateral and the Acknowledgment Agreement (as those terms are defined in Exhibit 33) have been terminated due to a Transfer of Servicing or a voluntary partial cancellation of the Servicer's Servicing Contract Rights.
PARTICIPATION MORTGAGES
With the implementation of the Uniform Loan Data Delivery requirements in March 2012, Freddie Mac ceased the purchase of participation Mortgages. With the implementation of the Investor Reporting Change Initiative, Freddie Mac no longer has participation Mortgages in its portfolio. Therefore, any requirements for purchase and Servicing of participation Mortgages are being removed from the Guide.
ADDITIONAL GUIDE UPDATES AND REMINDERS
Servicer Success Scorecard – Loan Level Reporting Compliance metric, Borrower income documentation, Form 59, Community Land Trust Mortgages, Reminder on Servicing Mortgages impacted by Eligible Disasters.
Effective: | June 13, 2019 |
Industry: | Mortgage Lending |
Source: | New Hampshire House Bill 740 → |
Tag: | Licensing |
New Hampshire is exempting certain mortgages from the law regarding licensing of nondepository mortgage bankers, brokers, and servicers.
Effective: | June 13, 2019 |
Industry: | Consumer Lending, Mortgage Lending, Mortgage Servicing |
Source: | Florida Florida House Bill 409 → |
Tag: | Notary |
The state of Florida enacted provisions relating to notaries that include online notarizations specifying registration and qualification requirements for online notaries public authorizing the performance of certain notarial acts.
Provisions in this bill range from effective immediately to effective on January 1, 2020.
Effective: | June 15, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae SEL-2019-03 → |
Tags: | Underwriting, Income, MIP-PMI |
HomeReady mortgage is our premier affordable lending product designed for creditworthy low- to moderate-income borrowers, offering expanded eligibility for financing homes in low-income communities. We have updated our HomeReady policies to include the following:
Effective Date
Lenders may implement these policies immediately. Desktop Underwriter® (DU®) will be updated to include the multiple financed property policy and boarder ownership policy in a future release, at which time these will be required for DU loan casefiles. For manually underwritten loans, lenders must apply these policies for loans with application dates or after June 15, 2019.
Effective: | June 17, 2019 |
Industry: | Mortgage Lending |
Source: | FHA Mortgagee Letter 2019-08 → |
Tags: | Underwriting, Property - Appraisal |
This guidance may be implemented immediately but must be implemented for mortgages with case numbers assigned on or after June 17, 2019.
Summary of Changes
The Construction to Permanent and Building on Own Land policy is being revised to separate the programs according to the “one time close” versus “two-step close” structure instead of the length of time the Borrower has owned the land. This revision preserves the existing mortgage calculations that vary based on the length of time of land ownership and are now available in either program.
Construction-to-Permanent updates include:The remainder of the Construction-to-Permanent guidance is unchanged.
Building on Own Land updates include:
[Please refer to the Mortgagee Letter for complete details]
Effective: | June 19, 2019 |
Industry: | Mortgage Lending, Mortgage Servicing |
Source: | Freddie Mac Freddie Mac Bulletin 2019-14 → |
Tags: | Servicing, Servicing Transfers, Underwriting, Closing |
Eligible Mortgages and property
General eligibility requirements
Provides maximum financed renovation costs by transaction type, recourse, special delivery requirements.
Transfer of Servicing
A Transfer of Servicing involving CHOICERenovation Mortgages with renovations not completed by the Settlement Date (as described in Section 4607.1(b)), is prohibited until:
Servicing Requirements
Updating Section 8104.6 to provide that Seller/Servicers that service any CHOICERenovation Mortgage that was permitted to be delivered to Freddie Mac prior to completion renovations must, in addition to other Servicing requirements, comply with the Servicing requirements related to completion of such renovations. This includes but is not limited to:
Effective: | June 22, 2019 |
Industry: | Mortgage Lending |
Source: | Fannie Mae SEL-2019-07 → |
Tags: | Property - Appraisal, Underwriting |
Effective: | June 24, 2019 |
Industry: | Mortgage Servicing |
Source: | Connecticut Connecticut House Bill 6996 → |
Tags: | Connecticut, Foreclosure |
Effective: | June 24, 2019 |
Industry: | Mortgage Servicing |
Source: | New Jersey New Jersey Senate Bill 362 → |
Tags: | New Jersey, Foreclosure |
Provides that deed restrictions on affordable housing units are not extinguished by foreclosure proceedings.
Effective: | June 24, 2019 |
Industry: | Mortgage Lending |
Source: | Freddie Mac Bulletin 2019-16 → |
Tag: | Underwriting |
Effective: | June 26, 2019 |
Industry: | Consumer Lending, Mortgage Lending |
Source: | Kentucky Alert → |
Tags: | Kentucky, Licensing |
On March 26, 2019, Kentucky Governor Matt Bevin signed into law a bill, House Bill 285 (HB 285), which amends the requirements for consumer loan companies in Kentucky.
Some of the key provisions of HB 285 include the following:
Effective: | June 27, 2019 |
Industry: | Mortgage Lending |
Source: | Delaware Delaware House Bill 199 → |
Tags: | Delaware, Licensing |
Effective: | June 28, 2019 |
Industry: | Mortgage Lending |
Source: | Nevada LCB File No. R177-18 → |
Tags: | New Jersey, Licensing |
Effective: | June 28, 2019 |
Industry: | Mortgage Lending |
Source: | USDA https://www.rd.usda.gov/files/pn525.pdf → |
Tag: | Certification, Endorsement, and Delivery |
HB-1-3555, Chapter 4 is partially revised to update the lender's reporting and oversight requirements.
Chapter 4: Paragraph 4.12, to add a bullet to provide guidance on lender post-closing self reports.
Remove: Chapter 4 dated 03-19-16: Pages 4-7 & 4-8
Insert Chapter 4 dated 03-19-16: Pages 4-7 & 4-8 revised 06-28-19.
Effective: | June 28, 2019 |
Industry: | |
Source: | VA Circular 26-19-17 → |
Tag: | Underwriting |
This Circular supplements the Department of Veterans Affairs (VA) Lenders Handbook, updates to Chapter 8, Topic 8, The VA Funding Fee, eligibility clarification and updates to Chapter 6, Refinancing, concerning Interest Rate Reduction Refinancing Loans, IRRRLs.
Effective: | June 28, 2019 |
Industry: | Mortgage Lending |
Source: | Alaska Alaska House Bill 104 → |
Tags: | Alaska, Licensing |
Amends provisions relating to exemptions from mortgage lender, mortgage broker, and mortgage loan originator licensing requirements.