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Financial Services Law Insights and Observations

FHFA eases loan processing for GSEs

Federal Issues FHFA Fannie Mae Freddie Mac Mortgages Appraisal Covid-19

Federal Issues

On March 31, the FHFA announced that it has provided flexibility to Fannie Mae and Freddie Mac (GSEs) in processing loans. According to the announcement, the GSEs will now be allowed to (i) use “desktop appraisals on new construction loans”; (ii) accept an “alternative to the Completion Report” to show that construction is complete; (iii) rely on documents from borrowers to allow draws instead of requiring inspections; and (iv) utilize remote online notarizations and powers of attorney to a greater extent. Fannie Mae updated LL-2020-04 to specifically address temporary appraisal requirements, identification of Fannie Mae loans, and alternatives to complete report Form 1004D. Additionally, Fannie Mae updated LL-2020-03 for single-family sellers, adding remote online notarization, verification of self-employment, age of documentation, market-based assets, powers of attorney, and lender QC requirements. Freddie Mac also covered the FHFA topics in Bulletin 2020-8 with Covid-19-related selling guidance.

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