InfoBytes Blog
Fannie Mae Updates Numerous Selling Policies
On May 27, Fannie Mae announced in Selling Guide Announcement SEL-2014-06 numerous selling policy updates. The announcement includes changes to Fannie Mae policies related to cash-out refinance transactions to provide additional flexibility and clarity with regard to delayed finance, continuity of obligation, and multiple finance properties for the same borrower. The announcement also details several asset-related updates, including, for example, that Fannie Mae will no longer require documentation for any deposit on a borrower’s recent bank statement that exceeds 25% of the total monthly qualifying income for the loan. Instead, Fannie Mae is changing the definition of a large deposit to 50% of the total monthly qualifying income, and states that when a deposit includes both sourced and unsourced portions, only the unsourced portion must be used when calculating whether the deposit meets the 50% definition. Fannie Mae also announced: (i) updates to the definitions for retail, broker, and correspondent origination types; (ii) clarification of the requirements for use of a power of attorney; and (iii) revised requirements for reporting lender financial statements.