Compliance Calendar

New Jersey Assembly Bill 1063 enhances homeowner notification of foreclosure mediation program requirements by stating that obtaining the assistance of a trained foreclosure prevention and default mitigation counselor is a prerequisite to participation in mediation and clarifying that the homeowner-borrower is not required to pay any fees in order to participate in mediation; effective September 1, 2021.

The state of Minnesota has modified its statutes relating to reverse mortgage loan notices by adding subdivisions 6a, 6b relating to communication with third-party designees and independent counseling agencies.

Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will eliminate the Adverse Market Refinance Fee for loan deliveries effective August 1, 2021.

See also:

Fannie Mae Lender Letter LL-2021-13

North Dakota Senate Bill 2103 amends provisions relating to licensing exemptions for Money Brokers and Collection Agencies entities effective August 1, 2021.

This Guide Bulletin announces the elimination of the Market Condition Credit Fee in Price effective for Mortgages with Settlement Dates on or after August 1, 2021.

In August 2020, Freddie Mac announced a Market Condition fee in the form of a 50 basis points Credit Fee in Price, effective for certain refinance Mortgages with Settlement Dates on or after December 1, 2020 (Bulletins 2020-32 and 2020-35).

In response to the FHFA press release(opens in a new window) on July 16, 2021, Freddie Mac will no longer assess this Market Condition Credit Fee in Price that applies to certain cash-out and “no cash-out” refinance Mortgages with Settlement Dates on or after August 1, 2021.

Guide Exhibit 19, Credit Fees in Price has been updated to reflect this change.

The Market Condition Credit Fee in Price will not be assessed on any refinance Mortgage that is allocated to a Cash Purchase Contract with a contract acceptance date after June 1, 2021 and a Mortgage Funding Date on or after August 1, 2021.

If the Market Condition Credit Fee in Price is assessed on a refinance Mortgage that is allocated to a Cash Purchase Contract with a contract acceptance date prior to June 1, 2021 and a Mortgage Funding Date on or after August 1, 2021, Freddie Mac will reimburse the Seller according to the monthly Automated Clearing House (ACH) process described in Guide Section 6303.2.

Sellers will no longer be required to deliver the ULDD Data Point Investor Feature Identifier (Sort ID 368) of "J81" indicating a Construction Conversion Mortgage using Modification Documentation without a new Note in order to not be subject to the Market Condition Credit Fee in Price. Section 6302.28 and Exhibit 34 will be updated in a future Bulletin to reflect this change.

Asset and income modeler (AIM) for Self-Employed Borrowers – August 1, 2021

Effective for Mortgages with Loan Product Advisor® initial submission dates on and after August 1, 2021

We are revising our requirements for the asset and income modeler (AIM) for self-employed offering with respect to age of tax return requirements. Specifically, the Application Received Date will replace the Loan Product Advisor initial submission date as it relates to the requirements for age of federal tax return(s).

See Bulletin for complete details.

Arkansas House Bill 1455 amends the law concerning the conveyance of real property by Power of Attorney by replacing the reference of "letters of attorney" with "power of attorney" effective August 2, 2021.

Fannie Mae announced updates to loan documents for all mortgage loans with a confirmed commitment date on or before August 2, 2021.

The NCUA published a final rule that facilitates the transition of federally insured credit unions (FICUs) to the current expected credit loss (CECL) methodology required under Generally Accepted Accounting Principles (GAAP) effective August 2, 2021.

Fannie Mae released the Loan Delivery User Guide updated August 2021.

This article addresses a recently released set of FAQs on Sponsor-Initiated Affordability, a product that provides better pricing and underwriting flexibility to incentivize the voluntary creation or preservation of affordable units to tenants earning 80% of Area Median Income (AMI) or less.

Freddie Mac Servicing Bulletin 2021-18 announces the retirement of Form 1128, the Loss Mitigation Transmittal Worksheet to settle agency loans. Effective August 2, 2021, all FHA/VA/RHS loans must be submitted through Resolve, which is accessible through the Servicing Gateway.

Arkansas Senate Bill 149 amends the Fair Mortgage Lending Act (FMLA) to clarify the qualifications for licensing; provide a process to allow loan officers to work remotely, modify the process for a change of name or address of a licensee; require licensees to establish cybersecurity policies and procedures; and other updates; effective August 2, 2021.

Mortgage Bankers Association

The Centers for Disease Control and Prevention released a new order terminating residential evictions through October 3 in counties with “heightened levels of community [COVID-19] transmission.”

Freddie Mac announces selling guide updates related to qualified mortgages (updating the applicable sections of the Guide with requirements announced in earlier Bulletins); cash-out refinance mortgages when none of the borrowers have been on title for at least six months prior to the note date; Guide Plus notifications; and additional updates.

Fannie Mae SEL-2021-07 announces Selling Guide updates to specify when credit card reward points can be used as eligible assets, remove the expired Version 1 of the representations and warranties framework, update risk factors in Desktop Underwriter^® (DU^®), and clarify the policy on interested party contributions.

FHA released two partial waivers to its COVID-19 Advance Loan Modification (COVID-19 ALM) and COVID19 Recovery Loss Mitigation Options (COVID-19 Recovery Options).

• Effective immediately Fannie Mae is retiring the age of documentation and market-based asset policies that have been in place

• Removed from this Lender Letter the verbal verification of employment policy that previously expired and the power of attorney policy that was moved to the Selling Guide

Expiration of certain temporary credit underwriting requirements

Effective immediately, we are expiring the following COVID-19 requirements originally published in Bulletin 2020-8 on March 31, 2020:

As a result, our published Guide requirements apply as follows:

• Age of income and asset documentation – refer to Guide Section 5102.4
• Use of funds for Down Payment and/or Closing Costs – refer to Section 5501.3
• Reserves – refer to Section 5501.2

Remaining temporary credit underwriting requirements

The temporary credit underwriting requirements related to the following topics remain in effect until further notice, without a defined expiration date:

• Self-employed Borrowers: verification that the business is open and operating as announced in Bulletin 2020-8 and subsequently updated in Bulletins 2020-27 and 2020-35
• Self-employed Borrowers: requirements and guidance for Borrowers with qualifying income derived from self-employment as announced in Bulletin 2020-19 and updated in Bulletin 2020-44
• Purchase and refinance eligibility requirements for Borrowers with existing Mortgages as announced in Bulletin 2020-17

The Uniform Mortgage Data Program released this announcement to answers questions frequently asked about Fannie Mae and Freddie Mac’s joint efforts to update the Uniform Appraisal Dataset (UAD).

The purpose of this Mortgagee Letter is to inform Mortgagees of new student loan calculation requirements of the monthly payment obligation to align better with the current industry standards

FHA announced the publication of the Servicing and Loss Mitigation section (Section III) of the Single-Family Housing Policy Handbook 4000.1 effective August 17, 2021; however, Servicers may begin to implement these updates immediately.

These updates strengthen FHA’s loss mitigation approaches for struggling borrowers while streamlining key requirements for servicers.

In addition, the policy revisions align with industry standards and reduce and update outdated requirements and processes. These changes will improve outcomes for borrowers facing financial hardship and reduce the burden on both borrowers and servicers.

The Servicing and Loss Mitigation section also incorporates policy and process improvements identified by FHA, and through industry feedback received from its July 14, 2020, posting on the Single-Family Housing Drafting Table.

Key updates to and benefits of this section will include:

• A revised loss mitigation waterfall that allows servicers to review struggling borrowers for a permanent FHA Home Affordable Modification Program (FHA HAMP) home retention option without a lengthy forbearance. This approach has been proven to be highly effective at helping borrowers avoid redefault and foreclosure;
• Streamlined documentation requirements to avoid unnecessary delays and to align more closely with standard industry servicing practices, including removing signature requirements on Trial Payment Plans; and
• A revised structure for certain allowable costs and fees that corresponds with fee structures
  used by other industry participants.

Note: FHA Mortgagee Letter 2021-14 extends implementation to March 31, 2022, for

• Section III – Servicing and Loss Mitigation
• Appendix 4.0 – FHA-Home Affordable Modification Program (FHA-HAMP) Calculations
• Appendix 5.0 – HUD Schedule of Standard Possessory Action and Deed-In-Liew of Foreclosure Attorney Fees
• The effective date for all other changes published on April 19, 2021, continue to have an August 17, 2021, effective date

On August 20, 2021, Fannie Mae published the updated DU Specification Version 1.8.2 (DU Spec) and DU Implementation Guide MISMO Version 3.4.

VA is making technical amendments to the COVID-19 Veterans Assistance Partial Claim Payment program (COVID-VAPCP) effective August 23, 2021.

On August 23, 2021, Fannie Mae released the Loan Delivery Enhancements guide that assesses this year’s previous, current, and upcoming Loan Delivery updates.

FDIC published a Final Rule issuing a Statement of Policy Regarding Minority Depository Institutions that updates, strengthens, and clarifies the agency's policies and procedures related to minority depository institutions effective August 23, 2021.

On August 26, 2021, Fannie Mac announced updates to Desktop Underwriter (DU) Version 11.0 during the weekend of September 18, 2021.

Fannie released Navigating forbearance for servicers to assist customers in understanding forbearance requirements and workout options available to resolve their delinquency.

Missouri Senate Bill 106 modifies provisions regarding reasonable and bona fide third-party fees incurred for remote or electronic filings or fees sustained through interest and penalties following a judgment effective August 28, 2021.

Community Land Trust Mortgages secured by CHOICEHomes^®

In an effort to expand affordable housing options, we are allowing Sellers to sell Community Land Trust Mortgages secured by a CHOICEHome with Freddie Mac's written approval. To obtain Freddie Mac's written approval, the Seller must contact its Freddie Mac representative or the Customer Support Contact Center at 800-FREDDIE.

As a reminder, a Seller must separately obtain Freddie Mac's written approval before selling Mortgages secured by a CHOICEHome.

Guide impact: Section 4502.5

Construction Conversion Mortgages secured by Manufactured Homes

In an effort to provide greater flexibility for manufactured housing, we have removed the land ownership requirement that at least one Borrower be on title to the land for 12 months or more prior to the Effective Date of Permanent Financing for "no cash-out" refinance Construction Conversion Mortgages secured by Manufactured Homes.

As a result of this change, we have updated references to calculating value for Construction Conversion Mortgages secured by Manufactured Homes to include instances when the Borrower has been on title to the land for less than 12 months.

We have also reformatted the refinance requirements for Construction Conversion and Renovation Mortgages to better highlight the differences for "no cash-out" and cash-out refinances.

Guide impacts: Sections 4602.5, 4602.10, 4602.12 and 5703.4

GreenCHOICE^® Mortgages

Based on industry feedback and in support of our continuing efforts to preserve housing affordability, we have updated certain requirements related to GreenCHOICE^® Mortgages to provide specificity and flexibility for our Sellers and Borrowers.

See bulletin for full revisions and table.

On August 30, 2021, Fannie Mae published its Property 360 Expense Reimburse User Guide.

Refi Possible is a new “no-cash out” refinance offering for low-income Borrowers that we are introducing under the guidance of the FHFA and in coordination with Fannie Mae. Refer to the full bulletin for requirements.

6/16/2021 - Refer to updates published here: https://sf.freddiemac.com/articles/news/freddie-mac-refi-possible-mortgage-requirements-update

Freddie Mac announces updates to the Refi Possible℠ Mortgage, which is available on August 30, 2021, to allow use of the credit report to determine if the payment history requirements have been met through the last reported mortgage tradeline date, provide a Loan Product Advisor® (LPASM) assessment of the payment history through the date the mortgage tradeline was last reported on the credit report, provide additional requirements for the Seller to establish the payment history between the date the mortgage tradeline was last reported and the note date, and provide eligibility for borrowers who have resolved missed payments due to a COVID-19 forbearance.

Fannie Mae has published the Multifamily Asset Management Portal (MAMP) Release 13.0, and the new features are now accessible.

Fannie Mae Lender Letter LL-2021-07 adjusts the terms for a Flex Modification with reduced eligibility criteria for COVID-19 impacted borrowers to provide an opportunity to reduce their interest rate, regardless of the mortgage loan’s mark-to-market loan-to-value ratio.

Freddie Mac Bulletin 2021-24 announces temporary changes to the Flex Modification to further assist Borrowers who have been negatively impacted by the COVID-19 pandemic and who may require additional payment relief beyond what is currently available.

CFPB issued a final rule to finalize amendments to the federal mortgage servicing regulations establishing temporary special safeguards to help ensure that borrowers have time before foreclosure to explore their options, including loan modifications and selling their homes effective August 21, 2021.

Condominium and Cooperative Projects

• Revised requirements addressing projects in litigation or alternative dispute resolution (ADR) proceedings – August 31, 2021
• Minor updates to ownership and use of Common Elements of a Condominium Project and Common Areas of a Cooperative Project – August 31, 2021
  

See Bulletin for complete details.