Fannie Mae & Freddie Mac Announce Numerous Selling Guide Updates

Freddie Mac Fannie Mae

On May 15, Fannie Mae issued Selling Guide Announcement SEL-2012-04, which includes numerous changes to various Selling Guide topics. To address questions from lenders, the Announcement enhances and clarifies certain DU Refi Plus and Refi Plus requirements in connection with HARP program modifications. Fannie Mae also updated the eligibility and underwriting requirements for DU Refi Plus and Refi Plus to specifically permit financing provided through state Hardest Hit Fund programs to be used to pay down the mortgage balance at closing or to pay closing costs. All of the DU Refi Plus and Refi Plus updates are detailed in an attachment to the Announcement. A second attachment provides myriad updates to Fannie Mae’s employment and income policies, which are designed to provide additional flexibility and efficiency in processing employment and income documentation. The Announcement also includes miscellaneous Guide changes, including changes to Fannie Mae’s (i) restructured mortgage loan policy, (ii) Eligibility Matrix, (iii) eCommitONE User’s Guide, and (iv) Standard ARM Plan Matrix. Also on May 15, Freddie Mac issued Bulletin 2012-11, which amends and adds a number of selling requirements, many of which are effective immediately. The Bulletin permits federally regulated sellers to conduct “Electronic Transactions” using electronic versions of certain loan documents during the initial loan origination process. Several new Guide provisions also are included in the Bulletin. The new requirements: (i) entitle Freddie Mac to recapture premiums and buyups associated with mortgages that are paid off within 120 days of their sale to Freddie Mac, regardless of the reason for the payoff; (ii) remove the requirement that ARMs sold to Freddie Mac have a note rate, margin, and lifetime ceiling that are divisible by one-eighth of one percent; (iii) prohibit the sale of Mortgages encumbered by certain private transfer fee covenants as of July 16, 2012; and (iv) cease Freddie Mac’s practice of purchasing mortgages originated on Fannie Mae balloon documents as of September 1, 2012. The Bulletin also notifies sellers that Freddie Mac will contact customers with counterparty authorization (CPA) compliant accounts for resubmission of outdated CPA compliance forms. Finally, the Bulletin reiterates guidance from a number of previous bulletins and email updates regarding Freddie Mac Relief Refinance Mortgages and UAD Field-Specific Standardization Requirements.