Compliance Calendar

Oregon House Bill 2009 establishes temporary limitations on lenders' remedies for borrowers' failures to make payments on obligations secured by mortgages, trust deeds, or land sale contracts for certain real property effective June 1, 2021.

Colorado has revised statutes in relation to foreclosure sales of real property effective immediately.

Quality control (QC) and Exclusionary List

• Revised Exclusionary List screening requirements and fraud-related reporting changes
• New links to reference materials related to quality control (QC) and fraud prevention

Condominium and Cooperative Projects

• Additional specificity for Condominium Project review and eligibility requirements
• Updates for Cooperative Projects with excessive single-investor concentration
• Revised requirements for limited equity Cooperative Projects
• Guidance related to delivery of taxpayer identification numbers (TINs) for Condominium Unit Mortgages

Property eligibility and appraisals

• A new exception when multiple parcels that would normally be adjoined are separated by a road
• Removal of the requirement to report the transaction type and owner of record on the appraisal update
• Additional specificity regarding appraisal timing

Remote notarization

• Addition of Remote Ink Notarization (RIN) with minimum standards
• The addition of West Virginia to the list of States eligible for Remote Online Notarization (RON)

Authorized changes for Security Instruments

See Bulletin for complete details.

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

▪ Remote ink-signed notarization: added a new topic on notarization standards along with specific requirements for remote ink-signed notarization (RIN)

▪ Electronic submission via loan delivery: clarified the timing expectation for a clean loan file through final editing in Loan Delivery

▪ Clarification of correction and modification policy: clarified that loans with technical or typographical corrections are not considered to be modified loans

ASSET ELIGIBILITY AND DOCUMENTATION REQUIREMENTS

Direct account verifications (i.e., verification of deposit form)

In response to Seller feedback, we are providing greater specificity by updating our requirements when direct account verifications (i.e., verification of deposit forms (VOD)) are used.

For direct account verifications, we required additional documentation of the source of funds when the current balance in an account was significantly greater than the average balance. To align with our guidance for single deposits requiring verification, additional documentation is now required only for purchase transactions and when the current balance in an account exceeds the average balance by more than 50% of the sum of the total monthly qualifying income and the amount derived from the asset calculation for establishing the debt payment-to-income ratio described in Section 5307.1.

As an example, if the current balance reflected on the Borrower’s verification of deposit form is $15,000 and the average balance is $12,000, the source of the $3,000 increase must be verified if the Borrower’s total monthly qualifying income is less than $6,000.

Third-party asset verifications

We previously required third-party electronic asset verifications to identify the account with a minimum of the last four digits of the account number. We have revised this requirement to allow the asset account to be identified with a minimum of the last two digits of the account number.

Automated asset assessment with Loan Product Advisor, part of asset and income modeler (AIM), will be updated at a later date, which will be communicated when available.

Guide impact

Section 5501.3 has been updated to reflect these changes.

We are updating our requirements for third-party income and employment verifications as follows:

• For third-party 10-day pre-closing verifications (10-day PCVs), we required the name, address and phone number of the third-party service provider. We are revising this requirement to only require the name and contact information for the service provider.
• A requirement is being added for the Seller to ensure that the third-party verification service provider’s procedures provide for compliance with quality control requests for reverifications from Freddie Mac, the Seller and/or Servicer

Guide impacts: Sections 5302.2 and 5302.3

This circular announces that VA will continue to use VA Form 26-1802a, HUD/VA Addendum to Uniform Residential Loan Application.

Fannie Mae is introducing the RefiNow refinance option that offers expanded eligibility to benefit borrowers at or below 80% of the area median income (AMI) limit and helps more borrowers take advantage of the current low interest rate environment. Refer to the lender letter for the RefiNow requirements.

During the weekend of June 5, 2021, Fannie Mae will implement an update to Desktop Underwriter® (DU®) Version 11.0, which will include the implementation of the RefiNow™ refinance option applicable to DU Version 11.0 loan casefiles submitted or resubmitted to DU on or after the weekend of June 5, 2021.

Freddie Mac Servicing Guide Bulletin 2021-22 announces Servicing Guide updates to address third-party mortgage assistance funds; updates to Form 479A; extinguishment of rights in collateral; depository account monitoring clarification; Exclusionary List screening requirements for loss mitigation activities; workout incentives contact updates; short sale minimum net proceeds; Payment Deferrals and assumptions; Payment Deferral offer EDR code; and income source references.

Fannie Mae SVC-2021-03 announces Servicing Guide updates to address updates to verification of borrower’s income and assets; post-forbearance disaster payment deferral; IRS reporting; Fannie Mae Software Subscription Agreement Master Terms and Conditions; and verbiage related to hazard loss disbursements.

The Montana Division of Banking and Financial Institutions amended its rules that implement the Montana Mortgage Act (MMA) effective June 12, 2021.

New York Assembly Bill 5630 reforms the statutory short form and other powers of attorney for purposes of financial and estate planning.

This article addresses a recently released set of FAQs common questions about the features, requirements, and benefits of the RefiNow™ mortgage, an affordable refinancing option to make it easier and less expensive for qualifying homeowners to reduce their monthly housing costs.

Oregon Senate Bill 765 makes permanent provisions allowing notary public to perform notarial act using communication technology for remotely located individual under certain circumstances effective June 15, 2021.

Requires a notarial certificate be included in a tangible copy of any electronic record to satisfy recording requirements, if the notarial officer executing the notarial certificate certifies that the tangible copy is an accurate copy of the electronic record.

Texas House Bill 2533 permits licensed appraisers to perform evaluations rather than full appraisals for financial institutions where full appraisals are not required by federal guidelines and permits lenders to use both employee-conducted evaluations and automated valuation systems; effective June 15, 2021.

Home Possible® Mortgage Area Median Income Limits

As announced in our May 27, 2021, Single-Family News Center article (opens in new window), Loan Product Advisor and the Home Possible Income & Property Eligibility tool (opens in new window) will be updated on June 16, 2021 to reflect the 2021 area median income (AMI) limits.

The FHFA provides the AMI estimates to Freddie Mac, which we use to determine if the Borrower’s annual qualifying income meets Home Possible Mortgage eligibility requirements.

For Manually Underwritten Mortgages, the updated Borrower income limits will be effective for Mortgages with Application Received Dates on and after June 16, 2021.

See Bulletin for complete details.

West Virginia has amended provisions by adding thereto a new section, designated §8-12-22, relating to foreclosure actions involving abandoned properties; authorizing a municipality to commence a proceeding in a court of competent jurisdiction in the county in which the property is located to compel a foreclosure; defining “vacant and abandoned property”; designating the Zombie Property Remediation Act of 2021; and requiring conveyance of the deed following foreclosure.

Fannie Mae Lender Letter (LL-2021-10) announces changes to the RefiNow option previously published on May 5, 2021, to allow existing subordinate financing to be simultaneously refinanced as part of a RefiNow transaction, provided certain requirements are met, permit borrowers who have resolved missed payments due to a COVID-19 forbearance to be eligible for a new RefiNow transaction, and clarify the paystub requirements to align with current policy.

Fannie Mae announces a new coverage calculator for 1- to 4-unit properties, PUDs, detached condominiums, attached condominiums, and co-ops for lenders and servicers to determine the minimum flood insurance coverage required by Fannie Mae.

West Virginia Senate Bill 469 permits the appearance by video for purpose of notarial acts, permanently authorizing remote online notarizations effective June 17, 2021.

The law requires that when using RON, the notary must indicate that RON was used. Docutech has added the following statement to various documents: “This notarial act involved the use of communication technology.”

New Mexico Senate Bill 365 enacts changes to the prohibitions and requirements relating to certain adjustable-rate home loans effective June 18, 2021.

Maine House Paper 1033a/L.D. 1399 continues temporary modification of certain in-person notarization and acknowledgment requirements and develops the permanent implementation of remote and online notarization effective June 23, 2021.

Fannie Mae is releasing Collateral Underwriter^® (CU^®) Version 5.0 on June 25, which will include an enhanced user interface, which will incorporate the two existing versions of CU into one platform, and message updates to provide additional guidance, retire less effective messages, and add overvaluation messages.

Fannie Mae has provided an updated FAQ document to common questions related to Fannie Mae’s property eligibility and appraisal policies.

In Bulletins 2020-48 and 2021-4, Freddie Mac updated the power of attorney (POA) requirements found in Section 6301.4. As a result of Seller feedback, we are revising those requirements to provide greater clarity and flexibility and to remove certain obligations. With this Bulletin, we are:

• Clarifying that the Seller’s obligations may be performed by the broker, correspondent or other originator when delivering a Wholesale Home Mortgage
• Reducing the requirement to have a pre-closing discussion with the Borrower to cash-out refinance Mortgages only; purchase Mortgages and “no cash-out” refinance Mortgages do not necessitate a pre-closing discussion
• Adding military deployment to the list of events that justify using a POA and waiving the requirement for a pre-closing discussion when the Borrower is unavailable due to being in a Period of Military Service (as defined in Section 8501.3)
• Specifically listing the information that must be discussed with the Borrower during the pre-closing discussion
• Easing documentation requirements when a POA is required to be accepted under applicable law
• Providing that the POA need not be specific to the mortgage transaction
• Expanding the ways in which the Borrower’s acknowledgment of the pre-closing discussion may be memorialized

Guide impact: Section 6301.4

POWER OF ATTORNEY

Effective for Application Received Dates on or after June 30, 2021, but Sellers may implement sooner if possible

In Bulletins 2020-48 and 2021-4, we updated the power of attorney (POA) requirements found in Section 6301.4 to provide more flexibility when using POAs. In response to client feedback, we are extending the mandatory implementation date to June 30, 2021.

Guide impact: Section 6301.4

Effective June 30, 2021, no claim submissions, regardless of submission method, will require a Borrower’s SSN.