Compliance Calendar

USDA is announcing that for a 12-month period, beginning 05-02-2022, non-U.S. citizens with valid Social Security Numbers and work authorization, as evidenced by documentation such as an Employment Authorization Document, Form I-766 (EAD), are temporarily eligible to apply for assistance and will temporarily revise Chapter 8 paragraph F “Having Acceptable Citizenship or Immigration Status [7 CFR 3555.151(b)]” of the SFHGLP Handbook.

Fannie Mae announced updates to Lender Letter 2021-07, updating the requirements related to performing an escrow analysis to clarify that servicers must spread any escrow shortage repayment amount identified in the subsequent annual study after a COVID-19 payment deferral or a Flex Modification by the reduced eligibility criteria for COVID-impacted borrowers over either the remaining escrow shortage repayment period or another period of up to 60 months.

In the Selling Guide Announcement (SEL-2022-04), Fannie Mae announced updates to include changes to the adding requirements on the use of virtual currency, updating requirements on the source of funds from assets located outside of the United States and its territories, providing additional details on eligibility requirements, eliminating the need to provide unrecorded assignments of mortgage for loans not registered with Mortgage Electronic Registration System, Inc. (MERS®) and miscellaneous updates.

In this Sellers Guide Bulletin, Freddie Mac announced updates related to credit underwriting and eligibility, Uniform Loan Delivery Dataset (ULDD) Phase 4a, Loan Product Advisor Feedback Certificate, and some additional guide updates effective immediately unless otherwise noted.

Fannie Mae updated Lender Letter 2021-02 on May 4, 2022, to include Increases to their expense reimbursement limits for interior and exterior property inspections.

Due to the current interest rate environment, the State of Vermont Department of Financial Regulation has suspended the disclosures for high cost mortgage loans required by Title 9, Section 104 of the Vermont Statutes Annotated (“Section 104”) until January 1, 2023.

The United States Department of Agriculture (USDA) announced updates to the Homeowner Assistance Fund (HAF) FAQs and posted them on the Single-Family Housing Guaranteed Loan Program website.

The Federal Housing Administration (FHA) announced the publication of the Title I Property Improvement and Manufactured Home Loan Programs sections of its Single-Family Housing Policy Handbook 4000.1

The Title I Manufactured Home Loan program is meant to facilitate financing for manufactured homes that are titled as personal property, and the lots on which these homes will reside. The Title I Property Improvement Loan program is designed to help homeowners finance improvements on their homes to improve the livability or utility of a property through a second trust or unsecured loan.

The USDA announced the mandatory use of its automated Guaranteed Underwriting System (GUS) and the Lender Loan Closing (LLC) final rule effective May 9, 2022.

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

▪ Eliminating unrecorded assignments of mortgage: incorporates the policies introduced in LL-2021-15, Unrecorded Assignments of Mortgage and New Limited Powers of Attorney into the Servicing Guide

▪ Mortgage-backed security principal & interest, guaranty fee, and reverse mortgage loan remittances: provides updates to managing drafting instructions for mortgage-backed security (MBS) principal & interest (P&I), guaranty fee, and reverse mortgage loan remittances

▪ Miscellaneous updates:

o provides notification of the transition to a new foreclosure and bankruptcy data reporting system and

o updates cutoff time for drafting instructions

Fannie Mae has released an update to its Appraisal Waivers Frequently Asked Questions.

The website published version of the Department of Housing and Urban Development's (HUD) Servicemembers Civil Relief Act (SCRA) Notice, which is required to be sent to all homeowners within 45 days of becoming delinquent on a mortgage loan, has been updated with a new expiration date of 11/30/2024.

This Circular announces new procedures for loan approval where the borrower has a VA-appointed fiduciary. It also announces new procedures for processing joint loans, both at the loan approval stage and when the lender reports the loan to VA for evidence of guaranty.

Historically, VA has conducted a pre-closing review of loan application packages when the borrower has been rated inability to manage financial affairs and has a VA appointed fiduciary.1 Also, VA has conducted a pre-closing review of cases where a loan would include more than one Veteran using entitlement. 2 For both loan types, the lender has sent such loan application packages to VA in advance of loan closing, and loan closing has not been able to proceed until after VA has issued approval. But as VA continues to evaluate ways to streamline procedures to improve the Veteran experience, VA has determined that such case-by-case reviews add a step that VA no longer believes necessary for ensuring program integrity. VA has determined instead that post-audit oversight would be as effective as a preclosing review in maintaining program integrity, without the delays and additional administrative burdens that can be associated with the historical process.

Illinois Senate Bill 3971 amends the Illinois Banking Act and Savings Bank Act to further protect the confidentiality of customer financial records, including guidance on the disclosure of financial records in response to subpoenas, warrants, and other court-related requests, effective immediately.

The U.S. Department of Housing and Urban Development (HUD) implements federal disaster assistance to State and local recovery efforts in the areas of Kansas affected by severe winter storms and straight-line winds from March 17 to March 22, 2022.

This newsflash provides information on Reason for Default Changes, Loan Termination in Connecticut, Loss Mitigation Letter, Servicer Department Contacts, and Technician Contact Information.

Reason for Default Changes – The “Reason for Default Update” event will not process if the new default reason is submitted in servicer’s nightly file and, while the event is pending processing, another nightly file containing the original default reason is received. Servicers should make sure not to send another change file containing the original default reason to ensure that the new default reason processes successfully. This event is not available on the Event Bulk Upload template. Servicers that do not use a nightly file for event reporting may contact the assigned loan technician for assistance.

Loan Termination in Connecticut – A change was recently implemented in VALERI and the Results of Sale event is no longer the terminating event. Either the Transfer of Custody or the Confirmed Sale no Transfer of Custody event with the confirmation date is required to terminate the loan in VALERI. The updated State Foreclosure Process and Statutory Bid Information spreadsheet is located at https://www.benefits.va.gov/HOMELOANS/servicers_valeri_rules.asp .

Loss Mitigation Letter – To meet the requirement in 38 C.F.R. 36.4317(c)(13), servicers using a servicing system must provide the date that the loss mitigation letter was sent in the nightly file to generate the Loss Mitigation Letter Sent event. Servicers that manually report events using the bulk upload template can find an event tab named “Loss Mitigation Letter Sent.” A copy of the letter is still required for all Post Audit reviews on terminated loans.

Servicer Department Contacts – A new business area for Partial Claims is available in VALERI. Servicer administrators are urged to create and maintain accurate points of contact (POC) for each business area by selecting “Servicer Departments” from the main menu and then selecting “New.” Knowledge Article “Servicer Article: Add a New Servicer Department (POC)” is also available in VALERI. VA loan technicians rely on this information to complete their tasks timely. Missing or inaccurate servicer POC information may cause delays for both the technician and servicer.

Technician Contact Information – The VALERI Technician and Regional Loan Center (RLC) contact list has been updated and is located at https://www.benefits.va.gov/homeloans/servicers_valeri.asp . It is also available in VALERI as Servicer Knowledge Article: VALERI Technician and RLC Contacts.

New York Assembly Bill 1508 expands the market for reverse mortgages by allowing borrowers who are age 62 or older to obtain reverse mortgages on cooperative apartments.