Compliance Calendar

The Ohio Department of Commerce has announced the 2021 loan prepayment penalty adjustment in which no penalties can be imposed on prepayment or refinancing of a residential mortgage loan less than $93,119.

Implementation Timeline

• Lenders may use redesigned Form 1003 and DU Spec for all new loan applications received on or after 01/01/2020
• Lenders must use redesigned Form 1003 and DU Spec for all new loan applications received on or after 3/1/2020 
• New applications submitted to DU/DUG/ EarlyCheck must use DU Spec 
• Pipeline loans (applications received before 2/1/2020) must use the same formats as initially submitted

2.59.1738 RENEWAL FEES (1) Licenses issued under Title 32, chapter 9, part 1, MCA, expire December 31. Licensees shall submit their renewal applications by December 1 of each year to ensure issuance of the license to qualified renewal applicants by January 1 of the following year. The renewal fees for the license period January 1 through December 31, 2021, are:

(a) Mortgage Broker Entity, $125.00 (except as provided in 32-9-117(1)(b), MCA);

(b) Mortgage Broker Branch, $62.50;

(c) Mortgage Lender Entity, $187.50;

(d) Mortgage Lender Branch, $62.50;

(e) Mortgage Loan Originator, $100.00;

(f) Mortgage Servicer Entity, $187.50;

(g) Mortgage Servicer Branch, $62.50.

AUTH: 32-9-117, 32-9-130, 32-9-134, MCA

IMP: 32-9-117, 32-9-130, 32-9-134, MCA

The CFPB is amending the Fair Credit Reporting Act (FCRA) to reflect the ceiling on allowable charges under Section 612(f) will increase to $13.00, effective for 2021.

Amends the residential property foreclosure laws, until January 1, 2026, to:

• require the notice of sale also to contain a specified notice to a tenant regarding the tenant’s potential right to purchase a property containing from 1 to 4 single-family residences
  • require a trustee to maintain an internet website and a telephone number to provide specified information on the properties that is free of charge and available 24 hours a day, 7 days a week
    • for purposes of a power of sale, prohibits a trustee from bundling properties for the purpose of sale, instead of requiring each property to be bid on separately, unless the deed of trust or mortgage provides otherwise
  • for purposes of bids at trustee sales, prescribe an alternative process in connection with a trustee’s sale of property under a power of sale contained in a deed of trust or mortgage on real property containing 1 to 4 residential units (see Senate Bill for complete details)
• states that specified provisions related to mortgages and deeds of trust do not relieve a person who is deemed the legal owner of the property when a trustee’s deed is recorded from complying with applicable law regarding the eviction or displacement of tenants, including requirements for the provision of relocation assistance and just cause eviction
  • increases the civil fine for non-maintenance of a vacant property purchased or acquired at the foreclosure sale to up to $2,000 per day for the first 30 days, and up to a maximum of $5,000 per day thereafter, subject to the discretion of the governmental entity levying the fine
• requires the entity to provide notice of intent to assess a civil fine if the legal owner does not commence action to remedy the violation, notify the entity of that action, and complete the action within certain periods to be determined by the entity, subject to specified minimum lengths of time

Amends the mortgages and deeds of trust foreclosure laws to:

• eliminates the initial requirement that a notice of sale be published in the city in which the property or some part of it is situated, instead of providing that the initial publication preference is for a newspaper of general circulation in the public notice district in which the property, or some part of it, is situated
• prohibits charging a fee for the filing of a declaration of nonmonetary status if the trustee under a deed of trust is named in an action or proceeding in which that deed of trust is the subject, and the trustee reasonably believes that it has been named solely in its capacity as trustee and not arising from any wrongful acts or omissions

Ginnie Mae is announcing restrictions to the pooling eligibility of LIBOR-based adjustable-rate loans, effective with security issuances dated on or after January 1, 2021.

Restrictions on LIBOR-Based Single-Family Forward Adjustable Rate Mortgages (ARM)

Effective with security issuances dated on or after January 1, 2021, Ginnie Mae will stop accepting the delivery of loans for securitization into any pool type comprised of loans with any interest term based on LIBOR, including pool types “C RL”, “C TL”, “C FL”, “C FB”, “C SL”, “C XL”, “M RL”, “M QL”, “M TL”, “M FL”, “M FB”, “M SL”, and “M XL”. Consequently, all single-family forward ARM loans that rely on LIBOR, including LIBOR-based ARM-to-ARM loan modifications and re-performing LIBOR-based ARMs, will become ineligible for pooling into any Ginnie Mae I or Ginnie Mae II security as of the effective date.

Restrictions on LIBOR-Based Adjustable Rate Reverse Mortgages [HECM/HMBS]

Effective with HMBS issuances dated on or after January 1, 2021, Ginnie Mae will restrict the eligibility of adjustable rate Home Equity Conversion Mortgage loans for securitization into any HMBS pool type that relies on LIBOR, including pool types “C AL” and “C ML”. LIBOR-Based adjustable rate HECM loans that are not securitized as of January 1, 2021, will be ineligible for pooling without regard to their date of origination or the date in which the corresponding FHA case number was assigned. Participations associated with a HECM loan that is backing HMBS with an issuance date on or before December 1, 2020, will continue to be eligible for securitization without restriction until further notice.

Chapter 26 and Chapter 35 of the MBS Guide, 5500.3, Rev-1, have been amended in accordance with this memorandum.

Forward and reverse adjustable rate mortgage loans that rely on the Constant Maturity Treasury (CMT) index continue to be eligible without restriction.

Ginnie Mae is ready to facilitate the creation of Single-Class MBS collateralized by pools containing Secured Overnight Financing Rate (SOFR) ARM and HECM loans when those loans become authorized by the insuring agencies.

Hawaii Senate Bill 2275 updates the laws regarding notaries public to conform to the Revised Uniform Law on Notarial Acts (2018), the Hawaii Uniform Electronic Transactions Act, other state notary laws, and current notary practices effective 1/1/2021.

Added:

• §456-A Authority to refuse to perform notarial act
• §456-B Notarial act performed for remotely located individual
• §456-C Remote online notaries public; application; qualifications
• §456-D Notification regarding performance of notarial act on electronic record; selection of technology; acceptance of tangible copy of electronic record
• §456-E Validity of notarial acts
• §456-F Relation to the federal Electronic Signatures in Global and National Commerce Act

Revised:

• §456-1 Commission; renewal
• §456-2 Qualifications; oath
• §456-3 Seal
• §456-4 Filing copy of commission; authentication of acts
• §456-5 Official bond
• §456-6 Liabilities; limitations on; official bond
• §456-8 Rules
• §456-9 Fees and administrative fines
• §456-14 Authority to perform notarial act; notary public connected with a corporation or trust company
• §456-15 Journal; copies as evidence
• §456-17 Fees
• §456-19 Notary public signing for disabled person
• §456-20 Failure to verify identity and signature
• §456-21 Failure to authenticate with a certification statement
• §502-42 Certificate, contents
• §502-48 Identification of person making
• §502-72 Disposition of records

California Assembly Bill 1864 enacts the California Consumer Financial Protection Law (CCFPL) and changes the name of the Department of Business Oversight (DBO) to the Department of Financial Protection and Innovation (DFPI).

Key takeaways

• Establishes UDAAP authority for the new DFPI, adding “abusive” to “unfair or deceptive” acts or practices prohibited by California law, and authorizing remedies similar to those provided in the Dodd-Frank Act. The DFPI also has authority to define UDAAPs in connection with the offering or provision of commercial financing (e.g., merchant cash advance, lease financing, factoring) and other financial products or services to small business recipients, nonprofits, and family farms.

• Authorizes the DFPI to impose penalties of $2,500 for “each act or omission” in violation of the law without a showing that the violation was willful, which, arguably, represents an enhancement of DBO’s existing enforcement powers in contrast to Dodd-Frank and existing California law. The new law also includes enhanced penalties for “reckless” violations of up to $25,000 per day or $10,000 per violation. For “knowing” violations, the penalty may be up to $1,000,000 per day or 1% of the violator’s net worth (whichever is less) or $25,000 per violation.

• Exempts from the DFPI’s new UDAAP authority, banks, credit unions, federal savings and loan associations, and similar entities, as well as current licensees of the DBO and licensees of other California agencies, “to the extent that licensee or employee is acting under the authority of” the license.

• Creates a “registration” requirement (subject to the DFPI’s implementing regulations) that greatly expands the reach of the DFPI to oversee entities that are not currently subject to licensure/registration. Businesses that could potentially be subject to the new law include service providers (including affiliated entities) that offer their own or integrated financial products or services, and entities that provide payment or other financial data processing products or services to consumers by any technological means, among others. Note that debt collectors may soon become subject to new licensure requirements under separate legislation awaiting the governor’s signature.

• Provides DFPI with broad discretion to determine what constitutes a “financial product or service” within the law’s coverage, including by a regulation finding that the financial product or service is either: “(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law,” or “(B) Permissible for a bank … to offer or provide … [but] has, or likely will have, a material impact on consumers,” with certain enumerated exclusions.

• Provides that administration of the law will be funded through the fees generated by the new registration process and other funds generated from fines, penalties, settlements, or judgments.

Exemptions. Although the law increases DFPI’s authority over covered persons, it also expands the list of individuals and entities that are exempt from the CCFPL, which now includes: licensees and employees of licensees of any state agency other than DFPI, when acting under the authority of the other state agency’s license, and (ii) persons or employees of persons who are acting under the authority of one of the following licenses, certificates, or charters issued by the DFPI:

• An escrow agent under the Escrow Agents Law
• A finance lender, broker, program administrator, or mortgage loan originator under the California Financing Law
• A broker-dealer or investment adviser under the Corporate Securities Law of 1968
• A residential mortgage lender, servicer, or originator under the Residential Mortgage Lending Act
• A check seller, bill payer, or prorater under the Check Sellers, Bill Payers, and Proraters Law
• A capital access company under the Capital Access Companies Law
• Doing business under a license, charter, or certificate issued under the Financial Institutions law.

Colorado adopted amendments to it's Mortgage Loan Originator Licensing and Mortgage Company Registration Act (MLOLMCRA) Rules effective January 1, 2021.

The adoption of the rules is the culmination of these collaborative efforts, resulting in rules that have been updated to consider mortgage loan originators holding licenses in other jurisdictions, reconcile with NMLS processes and procedures, and ensure consistent disclosure and record retention timelines. The proposed rules have been written in plain language and are easier to use and understand. Additionally, the proposed rules provide a clearer roadmap of the licensing and enforcement requirements of the Mortgage Loan Originator Licensing and Mortgage Company Registration Act. 

Redlined Version Here

CFPB adjusts the annual dollar amount threshold under the Home Ownership and Equity Protection Act of 1994 (HOEPA).

For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2021 will be $22,052. 

The adjusted points-and-fees dollar trigger for high-cost mortgages in 2021 will be $1,103. 

For qualified mortgages, which provide creditors with certain protections from liability under the Ability-to-Repay Rule, the maximum thresholds for total points and fees in 2021 will be 3 percent of the total loan amount for a loan greater than or equal to $110,260; $3,308 for a loan amount greater than or equal to $66,156 but less than $110,260; 5 percent of the total loan amount for a loan greater than or equal to $22,052 but less than $66,156; $1,103 for a loan amount greater than or equal to $13,783 but less than $22,052; and 8 percent of the total loan amount for a loan amount less than $13,783.

CFPB adjusts the annual dollar amount threshold under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act).   

For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount in 2021 for the safe harbor for a first violation penalty fee will remain unchanged at $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will also remain unchanged at $40. 

Mandatory for initial submissions to Loan Product Advisor v5.0.06 and Mortgages with Application Received Dates on or after March 1, 2021, but may be used for Mortgages with Application Received Dates on or after January 1, 2021.

Open production period

The open production period will run from January 1, 2021 through February 28, 2021. During this period, all lenders may submit MISMO v3.4 loan application submission files to the GSEs’ AUS production environments and begin using the redesigned URLA. Industry participants that did not participate in the limited production period may enter production on a date of their choice.

Mandatory date

The redesigned URLA and updated Loan Product Advisor v5.0.06 technical specifications must be used for Mortgages with Application Received Dates and initial submissions to Loan Product Advisor on or after March 1, 2021.

Redesigned URLA

We are updating the Guide to add the redesigned Form 65 and make other related changes. Refer to the March 1, 2021 versions of Guide impacts: Sections 3401.7, 4101.1, 4304.1, 4602.13, 5101.1, Exhibits 1, 4, 5, Forms 65, 65A, 65As and 65s

Loan Product Advisor instructions for an alimony obligation

Effective with Seller implementation of the redesigned Form 65 and updated Loan Product Advisor technical specifications

When entering an alimony obligation with the updated Loan Product Advisor Specification v5.0.06, select “Alimony” for Income Type and enter it as a negative number. If the Borrower also receives alimony income, select the applicable income type(s) of “Alimony” for Income Type and enter the amount received. Sellers will no longer need to manually add applicable income type(s) together and subtract out any obligations.

Guide impacts: Sections 5301.1 and 5401.2

Loan Product Advisor and Loan Selling Advisor instructions for Affordable Seconds

Effective with Seller implementation of the redesigned Form 65 and updated Loan Product Advisor technical specifications

Loan Product Advisor instructions

The updated Loan Product Advisor v5.0.06 technical specifications contain new data fields for Affordable Seconds. As noted above, Loan Product Advisor v5.0.06 technical specifications dated March 18, 2020, must be used with the redesigned URLA.

Loan Product Advisor clients using system Specification v4.8.01 and earlier versions will continue to follow the current instructions provided in Section 4204.2(v) for entering the Note amount of the Affordable Second as shown in the first row of the table below when there is no payment due for the first 60 months of the Mortgage. For more information, refer to Affordable Seconds Defined and Tips for Data Submission into Loan Product Advisor.

New data points in Loan Product Advisor Specification v5.0.06 enable originators to accurately identify Affordable Seconds with no payment requirements before the Due Date of the 61st monthly payment. We are providing the revised data entry instructions for additional clarity on how to enter data in Loan Product Advisor for these types of Affordable Seconds, depending on which version of the request file specification you are using. (See Bulletin for complete details)

Delivery requirements

For Mortgages with Affordable Seconds treated as a gift in Loan Product Advisor v4.8.01 or earlier, Sellers must continue to deliver the valid value of “G18” for ULDD Data Point, Investor Feature Identifier (Sort ID 368). However, for Mortgages with Affordable Seconds submitted in Loan Product Advisor v5.0.06 or later, Sellers are no longer required to deliver the Investor Feature Identifier of “G18.”

Guide impacts: Section 6302.34 and Exhibit 34

House Bill 124 enacts provisions for electronic recording of documents and remote notarizations effective January 1, 2021.

Freddie Mac is introducing payment deferral, a new workout option that enables servicers to assist eligible borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current. 

Please read the Bulletin for complete requirements for the payment deferral: 

▪ Borrower eligibility

▪ Mortgage/property eligibility

▪ Borrower documentation

▪ Eligibility exclusions

▪ Determining the terms of the Payment Deferral

▪ Completing a Payment Deferral

▪ Payment Deferral Agreement

▪ Evaluation hierarchy

▪ Eligible Disasters and COVID-19

▪ Workout Prospector®

▪ Other requirements

Effective: Servicers are encouraged to begin evaluating borrowers for payment deferral in accordance with this Lender Letter on or after Jul. 1, 2020; however, servicers must begin evaluating borrowers for payment deferral no later than Jan. 1, 2021. 

Fannie Mae is introducing payment deferral, a new workout option that enables servicers to assist eligible borrowers who have resolved a temporary hardship and resumed their monthly contractual payments but cannot afford either a full reinstatement or repayment plan to bring the loan current. 

Please read the Lender Letter for complete requirements for the payment deferral: 

▪ Determining eligibility for a payment deferral 

▪ Determining eligibility for a payment deferral for a Texas Section 50(a)(6) loan 

▪ Determining the payment deferral terms 

▪ Completing a payment deferral 

▪ Processing a payment deferral for an MBS mortgage loan 

▪ Processing a payment deferral for a mortgage loan with mortgage insurance 

▪ Handling fees and late charges in connection with a payment deferral 

▪ Incentive fees ▪ Servicing fees for a payment deferral 

▪ Requesting reimbursement for payment deferral expenses 

▪ Fannie Mae workout hierarchy ▪ Updates to Fannie Mae Flex Modification 

▪ Reporting responsibilities for payment deferral 

▪ Borrower Solicitation Letter (Form 745) 

Effective: Servicers are encouraged to begin evaluating borrowers for payment deferral in accordance with this Lender Letter on or after Jul. 1, 2020; however, servicers must begin evaluating borrowers for payment deferral no later than Jan. 1, 2021. Also, these policy changes will be reflected in the Dec. 2020 update of the Servicing Guide.

The effective date for the final rule is January 1, 2020, and the compliance date is January 1, 2021.

The final rule amends the definition of trading account, adopts new exclusions from the definition of proprietary trading, streamlines existing exclusions and exemptions, and tailors compliance program obligations for banking entities. Specifically, the final rule

• revises the definition of “trading account” by (a) eliminating the presumption that the purchase (or sale) of a financial instrument held for 60 days or fewer is within the short-term intent prong of the trading account, (b) establishing a presumption that the purchase (or sale) of a financial instrument held for 60 days or more is not within the short-term intent prong of the trading account, (c) providing that firms that are subject to the market risk rule prong are not subject to the short-term intent prong, and (d) allowing firms to opt into the market risk rule prong.
• revises the definition of “trading desk” by adopting a multi-factor definition based on the same criteria typically used to establish trading desks for other operational, management, and compliance purposes.
• revises the exclusion from the definition of proprietary trading for liquidity management and adopts new exclusions for (a) error trades and error-correcting trades, (b) customer-driven matched swap transactions, (c) mortgage servicing assets and mortgage servicing rights hedging activities, and (d) purchasing or selling financial instruments that would not be accounted for as trading assets or liabilities on applicable reporting forms.
• streamlines the proprietary trading and covered fund exemptions for underwriting and market-making related activities, risk-mitigating hedging activities, and activities conducted solely outside the United States.
• tailors compliance program obligations based on trading assets and liabilities and generally streamlines the compliance program obligations. The final rule eliminates the 2013 rule’s CEO attestation requirement for all banking entities except for banking entities with significant trading assets and liabilities. Banking entities without significant trading assets and liabilities will no longer be required to submit annual CEO attestations as of January 1, 2020.
• revises the metrics reporting obligation requirements to (a) apply only to banking entities that have significant trading assets and liabilities and (b) require metrics reporting on a quarterly schedule. The metrics amendments eliminate the following metrics: Inventory Aging, Stress Value-at-Risk, and Risk Factor Sensitivities. The amendments replace the Customer-Facing Trade Ratio metric with the new Transaction Volumes metric and replace the Inventory Turnover metric with the new Positions metric. In addition, the amendments require that metrics be reported in an XML format.

Amended §80.2 is adopted with substantive changes to the published text and is republished to reflect such changes. The substantive changes to amended §80.2 regulate no new parties and affect no new subjects of regulation.

Definition of a Residential Mortgage Loan Originator Changes

The adopted rules add several new definitions to §80.2 related to the definition of a residential mortgage loan originator. The adopted rules add a new definition for "originator," to adopt by reference the statutory definition for residential mortgage loan originator in Chapter 156, allowing for use of that shortened term throughout the rules, improving readability and reducing word count. The adopted rules add a definition for the phrase "takes a residential loan application," as used in Finance Code, §156.002(14), for purposes of determining when an individual is acting as a residential mortgage loan originator. The adopted rules add a definition for the term "application" to further define and clarify when an individual has received information constituting a residential mortgage loan application for that same purpose. The adopted rules also add a definition for the phrase "offers or negotiates the terms of a residential mortgage loan," as used in Finance Code, §156.002(14) for purposes of determining when an individual is acting as a residential mortgage loan originator. The adopted rules add a definition for "compensation" for that same purpose.

Other Definitions Changes

The adopted rules make other changes to the definitions section in §80.2. The adopted rules eliminate the existing definition for "one-to-four family residential real property," the subject matter of which is generally replaced by adding two new definitions for "dwelling" and "residential real estate," terms which are used in Finance Code, Chapter 156. The adopted rules also eliminate the existing definition for "criminal offense," used in evaluating an individual's fitness and eligibility to be licensed by the department as a residential mortgage loan originator, as being unnecessary in the rules chapter pertaining to mortgage companies. The adopted rules also add the following new definitions: "mortgage applicant," "mortgage company," "person," and "social media site."

Sections 80.200, 80.202 - 80.204, and 80.206 are further republished to adopt minor, non-substantive changes to add TAC references and correct minor errors in grammar.

Required Disclosures and Advertising Changes

The adopted rules make changes to the disclosures a mortgage company or its sponsored originator are required to make, as provided by §80.200. The adopted rules limit existing disclosure requirements by eliminating the requirement for a licensed mortgage company to post disclosures at its physical office. Existing requirements for posting disclosures on a website are clarified to expressly include a social media site of the mortgage company. The adopted rules impose a new requirement to disclose Nationwide Mortgage Licensing System and Registry (NMLS) identification information on all correspondence from a mortgage company or sponsored originator. The adopted rules also limit existing disclosure requirements in connection with a mortgage company's physical office, as provided by §80.206, by eliminating the requirement that a mortgage company post its hours of operation at each physical office. The adopted rules make changes to the advertising requirements imposed on mortgage companies by rule, contained in §80.203. The adopted rules limit existing advertising requirements by eliminating the requirement that a mortgage company recite the address of its physical office in Texas when making an advertisement. The adopted rules further alter requirements for advertising including by: clarifying an existing requirement that advertisements on social media sites are subject to the rules; limiting existing advertising requirements by allowing a mortgage company to promote its website address on certain promotional items deemed by rule not to constitute an advertisement; clarifying that signs on the premises of a mortgage company are not subject to the advertising requirements; and clarifying that a mortgage company may advertise directly, and need not advertise by and through an originator sponsored by the mortgage company.

Duties and Responsibilities Changes

The adopted rules make changes to the duties and responsibilities imposed on licensed mortgage companies by rule, contained in §80.202. The provisions of existing subsection (a) are eliminated and replaced with language causing each discrete act contained in the paragraphed list under subsection (a) to be deemed a violation of the prohibition against a mortgage company engaging in fraudulent and dishonest dealings pursuant to Tex. Fin. Code §156.303(a)(3). The prohibition against disparaging a source of income for a mortgage loan, contained in existing subsection (b), paragraph (3), is clarified to include the more likely and harmful scenario where the source of funds is inflated to secure loan approval. The provisions of existing subsection (b) are eliminated and replaced with language causing each discrete act contained in the paragraphed list under subsection (b) to be deemed a violation of the prohibition against a mortgage company engaging in improper dealings pursuant to Tex. Fin. Code §156.303(a)(3). Existing subsection (b), paragraph (3), which prohibits a mortgage company from representing to a mortgage applicant that a fee payable to the mortgage company operates as a discount point for the transaction, is clarified to prohibit any similar representation that such fee confers a financial benefit on the mortgage applicant, except in the limited circumstances set forth in the subparagraphs under existing subsection (b), paragraph (3). The provisions of existing subsection (b), paragraph (3), subparagraph (D), requiring a mortgage company to respond accurately to a question about the scope and nature of its services and any costs, are eliminated and the subject matter replaced with a new subsection (b), paragraph (4), requiring a mortgage company to respond within a reasonable time to questions from a mortgage applicant. A new subsection (d) is added to offer additional guidance on the existing requirement barring the splitting of origination fees with a mortgage applicant except in the narrow circumstances elucidated by the Consumer Financial Protection Bureau (CFPB) in Regulation X. In order to aid enforcement and prevent evasion of the requirement by those individuals who are acting in the dual capacity of an originator sponsored by the mortgage company and a real estate broker or sales agent licensed under Occupations Code, Chapter 1101, the adopted rules create a rebuttable presumption that a rebate or other transfer to the mortgage applicant made after closing is derived from his or her role as originator (a violation), and, conversely, not derived from his or her role as real estate broker or sales agent.

Books and Recordkeeping Changes

The adopted rules make various changes to the requirements for a mortgage company and its sponsored originator to keep books and records, contained in §80.204. The adopted rules clarify the existing requirement that a mortgage company or its sponsored originator maintain a copy of the mortgage loan application signed by both the originator and the mortgage applicant. The adopted rules also expand an existing requirement directing a mortgage company to maintain a log of its mortgage transactions. The adopted rule requires that such log describe the purpose for the loan and the owner's intended occupancy of the real estate securing the mortgage loan. The adopted rules also impose a new requirement to maintain records establishing the physical office of the mortgage company, and other more minor such changes.

Other Modernization and Update Changes.

The adopted rules make changes to modernize and update the rules including: adding and replacing language for clarity and to improve readability; removing unnecessary or duplicative provisions; and updating terminology.

Sections 80.300 are further republished to adopt minor, non-substantive changes to add TAC references and correct minor errors in grammar.

The updates include:

POWER OF ATTORNEY
Effective January 4, 2021; however, Seller/Servicers are encouraged to implement the changes as soon as possible

In Bulletin 2020-38, we announced that, effective January 4, 2021, Sellers would be required to deliver the recorded power of attorney to the Document Custodian within five Business Days of receipt from the recorder’s office. In response to Seller feedback and to offer more flexibility, we are revising the requirement from within five Business Days to within 30 days of receipt from the recorder’s office.

Guide impacts: Sections 1402.8 and 6301.4

UPDATED DOCUMENT CUSTODY PROCEDURES HANDBOOK
We have updated the Document Custody Procedures Handbook on Freddie Mac’s web site and AllRegs to align with changes in our purchase requirements that were announced in recent Guide Bulletins. These revisions are related to:

Pause on accepting new Document Custodians
Submission of aged release reports semi-annually, beginning in January 2021
Additional and enhanced documentation delivery requirements for Cooperative Share Loans
Enhanced Lost Note Affidavit custodial and note recovery requirements
Expansion on Freddie Mac audits
Updates on notarizations
Expansion of processing supplemental paper and electronic documents
In response to the increasing use of electronic documents in the mortgage market, we have also created a new chapter with information on eMortgages. Acting as Document Custodian (Freddie Mac-approved third-party eCustodian) for Freddie Mac’s eNotes requires separate approval from Freddie Mac. That approval process and the special requirements for managing eNotes are described in Chapter 6, Procedures Relating to eNotes and eMortgages

Effective for Mortgages with Application Received Dates on or after January 4, 2021; however, Sellers are encouraged to apply these updates to existing loans in process

In order to provide more flexibility in the use of a Power of Attorney (“POA”) when the Borrower is experiencing an emergency preventing him or her from executing documents in person, we are updating our POA requirements found in Section 6301.4, including several updates that align with the temporary COVID-19 flexibilities found in Bulletin 2020-8. The revised requirements include:

• An employee of the title insurer or settlement agent may be the attorney-in-fact
• The Seller or settlement agent must discuss the POA with the Borrower prior to closing the Mortgage
• Evidence of the emergency qualifying the use of a POA must be included in the Mortgage file
• POAs may be executed using eSignatures

Despite different temporary requirements for POAs used due to COVID-19 and reflected in Bulletin 2020-8, Sellers are reminded that for all other usage of POA:

• POAs may be used with any loan type
• All POAs must be notarized

Guide impact: Section 6301.4

This letter publishes changes to HUD’s maximum financing policy for New Construction (in Handbook 4000.1, Sections II.A.8.i.i-iv) include:

· Eliminating Early Start Letter and Pre-Approval requirements;

· Consolidation of requirements regardless of loan-to-value (LTV);

· Including Form HUD-92544 Warranty of Completion as a requirement for all New Construction;

· Providing alternative inspections by a third party, who is a registered architect or structural engineer, in the absence of International Code Council (ICC) certified Residential Combination Inspector (RCI) or Combination Inspector (CI); and

· Updating when Form HUD-NPMA-99-B, New Construction Subterranean Termite Service Record is required to align it with the four acceptable termite treatment applications reflected on the form HUDNPMA-99-A.

Mortgages executed by a power of attorney

If recordation is required for a power of attorney (POA), and if the original POA was sent for recording, Seller/Servicers are required to deliver a copy of the POA to the Document Custodian along with the Note and then either the original POA or a copy of the POA with recording confirmation to the Document Custodian when received from the recording office.

We are revising the Guide to require that Seller/Servicers deliver a certified copy of the POA along with the Note and promptly deliver the original POA or a copy of the POA with recording confirmation to the Document Custodian as a trailing document within five Business Days of receiving it from the recording office.

If the Note was executed under an Electronic POA, the Seller must comply with additional delivery requirements (See Bulletin)

Note: If the Document Custodian is not able to accept electronic documents, the Seller/Servicer must send a paper copy of the POA and/or the paper copy of the recorded POA to the Document Custodian.

Guide impacts: Sections 6301.4 and 6301.8

eMortgages executed by a power of attorney

• If the eNote was executed by a person acting as attorney-in-fact pursuant to authority granted by a Borrower under a paper POA, the Seller/Servicer must comply with specified delivery requirements (See Bulletin)
• If the eNote was executed by a person acting as attorney-in-fact pursuant to authority granted by a Borrower under an Electronic POA, the Seller/Servicer must comply with specified delivery requirements (See Bulletin)

Note: If MERS eDelivery is not available, for delivery of the Electronic documents, delivery by other electronic means (e.g., e-mail) to Freddie Mac or the Freddie Mac approved third-party eNote custodian is acceptable. If Freddie Mac is the eNote custodian, deliver the Electronic documents to loan_delivery_funding_ops@freddiemac.com.

Guide impact: Section 1402.8

This Lender Letter covers the following information:

• Lenders’ responsibilities for appraisal review: reviews lenders’ responsibilities for appraisal review
• Top appraisal findings and defects: provides examples of appraisal defects and shows how Collateral Underwriter® (CU®) messages can help to identify them
• Lenders’ responsibilities for compliance with Appraiser Independence Requirements: provides clarity for lenders’ on how to comply with AIR
• Appraisal underwriting best practices: suggests best practices for lenders’ appraisal underwriting processes
• QC best practices: suggests best practices for lenders’ QC processes related to appraisals
• Resources: points out resources to help lenders manage appraisal risk efficiently and effectively

• Under Regulation Z, the Temporary GSE QM loans patch is scheduled to expire no later than January 10, 2021

10/20/20 Update: The CFPB issued a final rule to extend the GSE Patch, originally scheduled to expire on January 10, 2021, until the mandatory compliance date of a final rule amending the General Qualified Mortgage (QM) loan definition in Regulation Z.

The OCC published a final rule amending licensing requirements to update and clarify the policies and procedures, eliminate unnecessary requirements consistent with safety and soundness, and make other technical and conforming changes; the final rule is effective on January 11, 2021, except for instruction 15g which is effective on December 11, 2020.

The Bureau of Consumer Financial Protection (Bureau) is issuing this Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency (Statement) to encourage financial institutions to better serve consumers with limited English proficiency (LEP) and to provide principles and guidelines to assist financial institutions in complying with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Equal Credit Opportunity Act (ECOA), and other applicable laws.

Freddie Mac is extending COVID-19 temporary flexibilities for employed income 10-day pre-closing verifications, appraisal, and GreenCHOICE Mortgages®, condominium projects, and power of attorneys (POAs) for mortgages with application received dates through February 28, 2021.

Freddie Mac has also updated the COVID-19 Selling FAQs to address year-to-date profit and loss statements and remove several FAQs pertaining to post-funding quality control flexibilities that are no longer in effect.

Fannie Mae LL-2020-03 announces

• an extension of the application dates for verbal verifications of employment and power of attorney flexibilities to Feb. 28, 2021.
• content was reorganized such that the policies with explicit expiration dates are shown first, and like content was moved closer together (income and employment).
• content that no longer applies was removed (such as quality control flexibilities and submission of financial statements) as have reminders of current policies in the Selling Guide.
• the COVID-19 Selling FAQs were updated to address year-to-date profit and loss statements and FAQs that pertained to COVID-19 policies that have expired have been removed.

Fannie Mae LL-2021-04 announces

• an extension of effective date: extending the application dates eligible for these temporary flexibilities to February 28, 2021, unless otherwise noted.
• content was reorganized and like content was moved closer together (e.g., HomeStyle Renovation content); two sections were removed (Identification of a Fannie Mae loan and Delivery requirements).

This Guide Bulletin announces updates to the age of the tax return date and documentation requirements as well as self-employed income guidance when tax returns from the most recent calendar year are not yet available.

During the weekend of January 16, 2021, Fannie Mae will implement an update to Desktop Underwriter® (DU®) Version 10.3. Unless specified below, the changes in this release will apply to DU Version 10.3 loan casefiles submitted or resubmitted on or after the weekend of January 16, 2021.

The changes in this release include the following:

• Manufactured Housing Message
• Support of the Redesigned Uniform Residential Loan Application (Form 1003)
• Submission Detail Messages
• Minimum Amortization Term
• Updates to Align with the Selling Guide

The Florida Department of Financial Services has amended the application procedures for Loan Originator License to provide an additional 45 days for submission of additional application information and to provide for the disposition of incomplete applications effective January 18, 2021.

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will extend the moratoriums on single-family foreclosures and real estate owned (REO) evictions until February 28, 2021.

See also:

Freddie Mac Bulletin 2021-3 https://guide.freddiemac.com/app/guide/bulletin/2021-3

Fannie Mae Lender Letter (LL-2021-02) https://singlefamily.fanniemae.com/media/24891/display

Effective immediately, FHA is permitting individuals classified under the “Deferred Action for Childhood Arrivals” program (DACA) with the U.S. Citizenship & Immigration Service (USCIS) and are legally permitted to work in the U.S. are eligible to apply for mortgages backed by the FHA.

Prior to today’s announcement, the FHA Single Family Housing Handbook (“Handbook 4000.1 Section II.A.1.b.ii(A)(9)(c) includes this statement: “Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” This language was incorporated into the FHA Handbook by the Obama Administration in September 2015 although it was first incorporated into FHA guidelines in 2003.

The Small Business Administration (SBA), in consultation with the Department of the Treasury, is providing this guidance to assist businesses in calculating their revenue reduction and payroll costs (and the relevant documentation that is required to support each set of calculations) for purposes of determining their eligibility for and amount of a Second Draw PPP Loan.

Fannie Mae updated the Guide to reflect changes to the criteria for automatic reclassification of MBS mortgage loans serviced under the special servicing option from four consecutive months delinquent to 24 consecutive months delinquent, as previously communicated in Lender Letter LL-2020-13.

Effective: These policy changes are effective in January 2021 for mortgage loans that become greater than four consecutive months delinquent (based on December 2020 and January 2021 reporting activity).

In circumstances where the servicer uses a processing month to complete a disaster payment deferral, Fannie Mae updated the Guide to eliminate the requirement that the servicer report the same delinquency status code used when reporting the previous month’s delinquency status information (i.e., delinquency status code 09 - Forbearance or 42 - Delinquent, No Action). If no other delinquency code is applicable and the mortgage loan reflects as current in our investor reporting system, the servicer is not required to report delinquency status information in the month in which the disaster payment deferral is completed.

Fannie Mae recently updated our remote online notarization policies, as communicated in Selling Guide Announcement SEL-2020-06. The policies also apply to remote online notarizations for the purpose of servicing or modifying a mortgage loan.

USDA announced an extension to the

1. foreclosure and eviction moratoriums until March 31, 2021;
2. first legal action and reasonable diligence timelines until March 31, 2021; and
3. approval of the initial 180-day COVID-19 Forbearance no later than the earlier of the termination date of the national emergency declared by the President on March 13, 2020 or March 31, 2021

FHA Mortgagee Letter 2021-03 announces an extension to the foreclosure and eviction moratorium originally issued in ML 2020-04, extended in MLs 2020-13 and 2020-19, 2020-27, and further extended in ML 2020-43 for borrowers with FHA-insured Single Family mortgages covered under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for an additional period through March 31, 2021.

The purpose of this Mortgagee Letter (ML) is to further update the Effective Date of ML 2020-06 with regards to approval of the initial COVID-19 Forbearance for FHA Borrowers and HECM deadlines.

This Mortgagee Letter is effective immediately.

The Georgia Department of Banking and Finance adopted provisions relating to general licensing requirements that include mortgage loan originator licensure; disclosure, advertising, and other requirements; books and records requirements; as well as examination, registration and investigation fees. These provisions are effective on January 28, 2021.

For redlined changes: https://dbf.georgia.gov/docume...

Pursuant to the GovDelivery message dated December 23, 2020, this communication clarifies that USDA will continue processing loans through February 26, 2020.

At this time, the Agency has determined that final submissions received by USDA via Legacy GUS by 11:59 pm ET on February 12, 2021, will be considered for Conditional Commitment prior to the February 26, 2021 closure of Legacy GUS.

Loans submitted after February 12, 2021, are unlikely to be reviewed, however, we will continue to review as many files as possible until that time.

Complete and detailed guidance of the Legacy GUS to New GUS transition can be found under the “New URLA Guaranteed Underwriting System (GUS)” tab in the LINC Library Training and Resources section.

IMPORTANT GUS CONVERSION DATES:

• February 26, 2021 – At the close of business on this day, Legacy GUS will no longer be available for editing or processing applications. Legacy GUS will be available to users in a view-only capacity so that historical data is accessible for up to one year.
• February 27-28, 2021 – All Single-Family Housing Guaranteed Loan Program (SFHGLP) systems will be unavailable to facilitate the transition to New GUS.

• March 1, 2021 – New GUS goes live. Existing applications in Legacy GUS that have not received a Conditional Commitment will require the application to be reentered into New GUS for consideration by USDA.

1. Background and Purpose. Under chapter 37 of title 38, United States Code, and Executive Orders
related to the COVID-19 national emergency, VA has taken numerous steps to help Veterans who are
experiencing financial hardships, directly or indirectly, as a result of the COVID-19 pandemic. The
purpose of this circular is to extend foreclosure and eviction relief on properties secured by VA-guaranteed
loans, including those previously secured by VA-guaranteed loans but currently in VA’sReal EstateOwned
(REO) portfolio.

2. Moratorium on Foreclosure and Eviction. Due to the ongoing COVID-19 national emergency and its impact on Veteran borrowers, all properties secured by VA-guaranteed loans, including those previously secured by VA-guaranteed loans but currently in VA’sREOportfolio, are subject to a moratorium on foreclosure and eviction through March 31, 2021. Except with respect to a vacant or abandoned property, the moratorium applies to the initiation of foreclosures, the completion of foreclosures in process, and evictions.

3. Rescission: This Circular is rescinded on April 1, 2021.

• publication of the London Interbank Offered Rate (LIBOR) index is not guaranteed beyond 2021
• the Secured Overnight Financing Rate (SOFR) is the recommended alternative to LIBOR
• Origination adjustable rate mortgage (ARM) products tied to LIBOR; all standard and custom Notes must be revised to account for the new index
• Origination home equity line of credit (HELOC) products tied to LIBOR; all custom Import Terms Disclosures, Account Opening Disclosures, and HELOC Agreements must be revised to account for the new index
• Servicing adjustable rate mortgage (ARM) products tied to LIBOR; §1026.20 advance notice of a rate adjustment with a corresponding change in payment must be provided at least 60 days, but not more than 120 days, before the first payment at the adjusted level is due
• Servicing home equity line of credit (HELOC) products tied to LIBOR; §1026.9 change in terms notice must be provided at least 15 days before the effective date of the change
• Banking credit card products tied to LIBOR; all initial disclosures must be revised to account for the new index
• Banking credit card products tied to LIBOR; §1026.9 change in terms notice must be provided at least 45 days before the effective date of the change