Compliance Calendar

Freddie Mac Selling Guide Bulletin 2021-29 announces updates relating to a new requirement that year-to-date paystubs be dated no more than 30 days before the Application Received Date and a new requirement for Sellers to inform Freddie Mac of a Borrower’s address confidentiality program (ACP) substitute mailing address.

FHA Mortgagee Letter 2021-21 announces the transition of the Single Family Default Monitoring System (SFDMS) from FHA Connection (FHAC) to FHA Catalyst beginning December 1, 2021.

Fannie Mae Servicing Guide Announcement (SVC-2021-07) updates reclassification and repurchase requirements for delinquent regular servicing option MBS mortgage loans to ensure REO is never held in MBS Trust and to comply with the Foreign Investment in Real Property Tax Act.

The Federal Housing Administration (FHA) announced they are postponing the effective date for reporting delinquent mortgage data to the FHA Catalyst originally announced in Mortgage Letter (ML) 2021-22.

In response to high demand in certain markets, the Department of Veterans Affairs will raise appraisal fees and lengthen allowable turnaround effective December 1, 2021.

Freddie Mac Selling Guide Bulletin 2021-36 announces Selling updates to Sellers related to 2022 conforming loan limits, the extension of guarantee fee obligation, affordable lending, credit underwriting, and document custody.

FHA has published extensions to its temporary regulatory and SFH Policy Handbook 4000.1 waivers:

• Allowing alternative methods for servicers to conduct borrower interviews for FHA-insured mortgages when performing early default interventions for borrowers in danger of foreclosure.

The state of Wyoming adopted requirements regarding its Uniform Consumer Credit Code, effective immediately.

The USDA has published this Unnumbered Letter (UL) increasing the permissible packaging fees for:

• Section 502 Direct certified loan application packaging. The corresponding change to Handbook-1-3550, Chapter 3, Attachment 3-A will be made in advance of this UL’s expiration date.
• American Rescue Plan Act (ARPA) packaging as outlined in the applicable UL dated May 12, 2021.
The increased packaging fees are effective as of the date of this UL.

BACKGROUND:
The Agency supports partnerships with loan application packagers since
packagers can provide outreach and presence in counties where a Field Office is not located; assist the Agency in reaching very low-income applicants; promote the program in underserved areas; prescreen potential applicants; counsel potential applicants on how to improve their ability to qualify for a home; ensure that applications are complete and accompanied by the supporting documentation needed for the Agency’s decision.

The UL expires on November 30, 2022

The Wyoming Secretary of State adopted terms relating to notarial acts that include remote notarizations, effective immediately.

MODIFICATION AGREEMENT UPDATES

To simplify the modification agreement process for Servicers and Borrowers, Servicers are no longer required to prepare two original modification agreements for the Borrower’s signature, as previously described in Guide Sections 9206.16 and 9206.17. Instead, the Servicer will deliver an unsigned copy of the modification agreement, together with any applicable riders and disclosures, and provide a date by which the Borrower must sign and return the executed modification agreement (and applicable riders and disclosures), which must be no more than 14 days from the date the Servicer sent the modification agreement.

Once the Borrower has signed the modification agreement and made the last required monthly payment due during the Trial Period and the Servicer determines the Borrower otherwise remains in compliance with the terms of the Trial Period Plan, the Servicer must sign the modification agreement and return a copy to the Borrower. The Servicer may not sign the modification agreement until the Borrower has signed the modification agreement and complied with all requirements of the Trial Period Plan.

Additionally, we are changing the requirement that the Servicer submit the fully executed original modification agreement for recordation within one Business Day of receiving either the Borrower executed modification agreement or the final Trial Period payment, whichever is later, to five Business Days to allow Servicers more time to complete the requirement.

Guide impacts: Sections 9206.16 and 9206.17

RETIREMENT OF HARDEST HIT FUNDS

In February 2010, the federal government announced the Hardest Hit Fund (HHF) program with an objective of allocating Treasury’s Troubled Asset Relief Program (TARP) funds to targeted areas that were impacted by the housing crisis and economic downturn. In Guide Bulletin 2010-25, we announced the Servicer requirements for participation in mortgage assistance programs under the HHF Program and subsequently updated the requirements in Section 9211.1 in Bulletins 2011-18, 2011-24 and 2016-10.

As of June 30, 2021, mortgage assistance programs under the HHF program have expired. As a result, we are updating the Guide to retire Guide Chapter 9211 and all references to the HHF accordingly.

Guide impacts: Sections 9201.6, 9211.1, 9212.1, 9301.6 and 9301.7

Updates to HHF-related Guide forms and exhibits

Effective March 1, 2022, but Servicers are encouraged to begin using the revised documents immediately

In addition, we are announcing updates to Guide Exhibit 93, Evaluation Notices, Exhibit 1100, Payment Deferral Agreements, Exhibit 1101, Disaster Payment Deferral Agreement, Exhibit 1145, Borrower Solicitation Letter, and Guide Form 710, Mortgage Assistance Application, to reflect the removal of HHF references and to add general references to mortgage assistance programs. Servicers are encouraged to begin using these revised documents immediately and before the mandatory effective date of March 1, 2022.

Servicers should refer to Chapter 9212 for requirements regarding handling of third-party mortgage assistance funds.

Guide impacts: Exhibits 93, 1100, 1101, 1145 and Form 710

ADDITIONAL GUIDE UPDATES AND REMINDERS

Borrower-requested cancelation of Borrower-paid mortgage insurance

We are clarifying that for Borrower-requested cancelation of Borrower-paid mortgage insurance based on current value where the Mortgage is seasoned less than two years, the Servicer may only approve such requests if it determines that the increased market value of the Mortgage Premises since the Origination Date is due to substantial improvements. Repairs that are made to keep the Mortgaged Premises maintained and fully functional are not considered “substantial improvements.”

Additionally, we are clarifying that Servicers may be reimbursed for mortgage insurance premiums incurred after the DDLPI and before a deed-in-lieu of foreclosure or a third-party foreclosure sale has been successfully reported to Freddie Mac or a short sale has been settled on Freddie Mac systems.

Guide impacts: Sections 8203.2, 8203.3 and 9701.7

Delivery requirements for eMortgages

For ease of navigation for Seller/Servicers, we have added the delivery requirements for electronically recorded paper modification agreements to the eNote Custodian for eMortgages to Section 9206.17.

Guide impact: Section 9206.17

Updates from Bulletin 2021-36

Remote online audio/video storage

Previously, Section 1401.16 appeared to require Sellers to maintain a recording of the notarial act for Mortgages closed using the Remote Online Notarization (RON) process. We have updated the section to require:

• Current Servicers (instead of Sellers) to obtain the recording of the notarial act upon request, and
• RON technology providers to make arrangements with notaries to provide access to Sellers and Servicers, as it is a common practice for them to make arrangements with participating notaries to obtain access and store the RON audio/video recording

This update should make it easier for current Servicers to obtain the recording, if necessary, for enforcement purposes or upon Freddie Mac request.

Guide impact: Section 1401.16

Foreclosure, bankruptcy and other legal proceedings for eMortgages

We have updated the title of Section 1402.11(e) from “Servicers that must be the Note holder (Controller) in legal proceedings” to “Foreclosure, bankruptcy or other legal proceedings” for greater clarity.

Guide impact: Section 1402.11

Genworth Mortgage Insurance Corporation name change to Enact

Effective February 7, 2022

Genworth Mortgage Insurance Corporation will officially begin doing business as Enact Mortgage Insurance Corporation. The valid value for ULDD Data Point MI Company Name Type/ MI Company Name Type Other Description (Sort ID 413/414) will change from “Genworth” to “Enact” on August 1, 2022; the MI Code “01” will remain the same.

Guide impact: Exhibit 10

Seller/Servicer oversight of Document Custodians

Effective March 1, 2022

We are requiring that Seller/Servicers have an oversight process to ensure their Document Custodians maintain all eligibility requirements. Seller/Servicers must notify Freddie Mac within one Business Day if a Document Custodian no longer meets one of our requirements.

We have also updated the Document Custodian eligibility requirements to require Document Custodians to:

• Maintain an acceptable risk threshold based on Freddie Mac’s internal risk tolerance thresholds, or
• Have an Acceptable Net Worth of at least $500,000,000

The prior requirement required Document Custodians to have an investment grade rating by a nationally recognized institution or have an Acceptable Net Worth of at least $500,000,000. Servicers and Document Custodians will be notified if a Document Custodian is below the acceptable risk threshold and does not have an Acceptable Net Worth of at least $500,000,000.

Finally, upon request, a Document Custodian is required to provide documentation showing its vaults receive annual fireproof certification.

Fannie Mae Servicing Guide Announcement SVC-2021-09 consolidates into the Selling Guide policies regarding insurance applicable to both lenders and servicers, updates various borrower-facing servicing forms and documents, retires Form 2002, clarifies subservicer eligibility to perform general servicing duties and responsibilities for HomeStyle® Renovation mortgage loans not associated with property renovation, and adds a link to the Mortgage Insurance Claims Portal.

The Servicing Guide has been updated to include changes to the following:

▪ Consolidation of Servicing and Selling Guide insurance policies: incorporates property and additional or optional insurance requirements applicable to both lenders and servicers from the Servicing Guide into the Selling Guide

▪ Updates to borrower-facing Guide documents: includes updates to various servicing forms and documents

▪ Form 2002 retirement: updates post-delivery servicing transfer requirements and retires MBS Custodian Recertification (Form 2002)

▪ Subservicer special product approval clarification: clarifies subservicer eligibility to perform general servicing duties and responsibilities for HomeStyle® Renovation mortgage loans not associated with property renovation

▪ Miscellaneous update: adds a link in the Servicing Guide to the Mortgage Insurance Claims Portal

SYNOPSIS

Repeals law concerning excess rates and charges for title insurance; makes agreement to use services of title or settlement service company subject to attorney review.

a. Notwithstanding the provisions of this act nothing herein shall prevent a consumer from exercising their free choice in the selection of the title or settlement services company of their choosing. Any agreement by a consumer to use the services of a title or settlement service company shall be subject to the attorney review, if any, which is part of the contract for sale of real estate and may be revoked in the same manner as provided in the contract for the sale of real estate.

b. A person who violates the provisions of this section shall be:

(1) for a first violation, subject to a 90 day business license suspension;

(2) for a second violation:

(a) subject to a 180 day business license suspension; and

(b) liable to a penalty of not more than $1,000 for each violation; and

(3) for a third and any subsequent violation:

(a) subject to a one year business license suspension; and

(b) liable to a penalty of not more than $2,500 for each violation

This Circular expresses concern about the Department of Veterans Affairs (VA) home loan borrowers affected by the Kentucky Severe Storms, Straight-Line Winds, Flooding, and Tornadoes.

This update modifies and clarifies requirements for military owner occupancy, tax return extensions, comparable sales for new (or recently converted) projects, measuring gross living area, property, and flood insurance, and provides other miscellaneous updates.

In this circular, the VA clarifies the processes for determining the statutory funding fee and supplements the information provided in Circular 26-21-11.

The agencies provide notice of the determination of the results of the review of the definition of qualified residential mortgage, the community-focused residential mortgage exemption, and the exemption for qualifying three-to-four unit residential mortgage loans, in each case as currently outlined in the Credit Risk Retention Regulations as adopted by the agencies.

In this Circular, the VA extends the suspension of certain property inspection requirements for COVID-19 Forbearance cases.

This FAQ document provides responses to common questions related to Fannie Mae’s project review methods and policies for determining project eligibility for mortgages secured by units in condo, co-op, and PUD projects as outlined in LL-2021-14.

New York Senate Bill 1579 requires a plaintiff including a lender, an assignee or a mortgage loan servicer in a mortgage foreclosure action to maintain the subject property.

The New York Department of Financial Services adopted provisions approving the use of the Secured Overnight Financing Rate (SOFR) as a benchmark for certain variable rate loans, effective immediately.

Amendment to 3 NYCRR 333

Indices Which May Be Used in Connection with Variable Rate Closed-End Personal Loans Made by Lending Institutions Pursuant to Part 33 or in Connection with Variable Rate Open-End Accounts Established by Banking Institutions Pursuant to Part 90.

Amendment to 3 NYCRR 334

Indices Which May Be Used in Connection with Part 80 Variable Rate Junior Mortgage Loans, Part 91 Variable Rate Installment Agreements and Part 92 Variable Rate Closed End Retail Installment Contracts and Obligations.

Arizona House Bill 2617 amends provisions to permit judgment liens on homestead properties and define requirements for title insurers on the sale of homestead properties subject to judgment liens effective December 31, 2021.