InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
Fannie updates Covid-19 FAQs
On June 3, Fannie Mae updated its Covid-19 FAQs for sellers to reflect updates to the temporary purchase and refinance eligibility outlined in Lender Letter LL-2020-03. As previously covered by InfoBytes, Fannie Mae announced that borrowers are eligible to purchase a new home or refinance their mortgage if they are current on their mortgage—defined as having “made all mortgage payments due in the month prior to the note date of the new loan transaction by no later than the last business day of that month”—or if the mortgage is currently in a loss mitigation solution (the borrower must have made at least three timely payments as of the note date of the new transaction). The newly updated selling FAQs outline additional details of this policy, including (i) what is meant by “full payments” with regard to loss mitigation programs; (ii) whether the forbearance must be completed before a borrower can be eligible for a purchase or refinance transaction; and (iii) what sources of funds are eligible to be used to reinstate mortgages with missed payments.
Oklahoma Department of Consumer Credit issues an extension to interim guidance regarding temporary operations from home or alternate locations
On June 1, the Oklahoma Department of Consumer Credit issued a Second Amended Interim Guidance that extends previous guidance permitting mortgage loan originators and employees of regulated entities to work from home or an alternate site, as long as certain data security precautions are taken (previously discussed here and here). The guidance was extended through July 5, 2020.
South Dakota Division of Banking extends work from home guidance
On June 1, South Dakota’s Division of Banking updated Memorandum 11-003 (previously covered here) to extend the time period in which licensed mortgage loan originators can work from home until December 31, 2020, so long as certain conditions relating to data and records security are met.
Fannie and Freddie issue temporary underwriting guidance for self-employment income; updates to renovation loan programs
On May 28, Fannie Mae and Freddie Mac issued guidance for underwriting self-employed borrowers during the Covid-19 pandemic. According to Fannie Mae’s Lender Letter LL-2020-03 and Freddie Mac’s Guide Bulletin 2020-19, lenders are now required to obtain additional documentation from self-employed borrowers to determine if the borrower’s income is “stable and has a reasonable expectation of continuance.” Lenders must obtain either (i) an audited year-to-date profit and loss statement for the business, or (ii) an unaudited year-to-date profit and loss statement signed by the borrower and two business depository account statements no older than the latest two months represented on the profit and loss statement. Bulletin 2020-19 and LL-2020-03 also provide guidance to assist lenders when reviewing the documentation to determine whether the business operations were impacted by the Covid-19 pandemic and whether they are considered stable. Fannie and Freddie encourage lenders to apply the temporary requirements immediately, however, they must be applied to any applications received on or after June 11.
Additionally, Bulletin 2020-19 provides temporary flexibilities with Freddie Mac’s “CHOICERenovation” Mortgages, and LL 2020-04 provides guidance on Fannie Mae’s “HomeStyle Renovation” loans. Fannie Mae also issued updates to its Covid-19 servicing FAQs.
South Carolina regulator updates guidance on working remotely and defers deadline for submitting the 2019 mortgage log
On May 28, the South Carolina Department of Consumer Affairs issued updated interim guidance (previously discussed here) regarding working remotely from unlicensed locations and the deadline for submission of the 2019 mortgage log. The updated interim guidance provides that, until July 1, 2020, licensed mortgage loan originators are permitted to work from home, whether in South Carolina or another state, even if the home is not a licensed branch. The guidance also notes the deferral of filing deadline for the 2019 mortgage log required of mortgage broker companies until June 1, 2020.
Fannie launches Covid-19 resource online portal
On May 26, Fannie Mae announced a new online resource for homeowners and renters titled, “Here to Help,” which compiles tools and resources to assist consumers with financial hardships due to the Covid-19 pandemic. The online portal features videos, fact sheets, and mortgage loan look-up tools for consumers and also provides lenders and servicers with tools to better assist their customers, including explanations of loss mitigation offerings and training videos for loan servicers.
Idaho Department of Finance extends work from home guidance for its licensees and registrants
On May 22, the Idaho Department of Finance extended temporary work from home guidance previously issued to Idaho mortgage brokers and lenders, mortgage loan originators, regulated lenders, title lenders, payday lenders, and collection agency licensees and registrants. The original guidance, previously covered here, permits employees to work from home where the residence is not a licensed branch. The guidance is extended through September 1, 2020.
Nevada Dept. of Business and Industry extends work from home guidance
On May 18, the Nevada Department of Business of Industry, Division of Mortgage Lending extended its provisional guidance allowing licensed mortgage loan originators to work from home (previously covered here) until August 31, 2020.
Washington Department of Financial Institutions extends guidance regarding remote work for mortgage loan originators
On May 7, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance permitting mortgage loan originators to work from home, previously covered here, until July 10, 2020.
Fannie Mae updates Single-Family Lender Letter 2020-03 regarding impact of Covid-19 on originations
On May 5, Fannie Mae issued updates to Lender Letter 2020-03. The letter is addressed to all Fannie Mae single-family sellers, and addresses the impact of Covid-19 on originations. Among other things, Fannie Mae extended temporary origination-related policies to June 30, 2020, reminded lenders of policies regarding the use of unemployment benefits as qualifying income, and clarified policies surrounding furloughed borrowers. Fannie Mae also updated guidance regarding age of documentation, verification of self-employment, market-based assets, powers of attorney, remote online notarization, and verbal verification of employment.