November 2013 Rules and Regulation Updates

View The Latest Q & A Issue

Fannie Mae/Freddie in Brief

Fannie & Freddie Agencies Announce New Closing Date To Be Eligible for HARP Refi’s (Effective October 22, 2013) [Download Mortgage Talking PointsTM flyer, Refi Plus™ and DU Refi Plus™ Loans, Relief Refinance and Relief Refinance Open Access Made Easier]

More loans are eligible for these programs, since May 31, 2009 is now the” closing” date and NOT the date “sold” to the agencies. You should take every opportunity to go through your pipeline as quickly as possible to determine whether loans that were previously ineligible are now eligible with the agencies.

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Fannie Mae

FNMA Miscellaneous Updates - Announcement SEL-2013-08 Dated October 22, 2013 - Power of Attorney, HARP Eligibility Dates, Master Blanket Insurance for Projects.

If you have a deal with a POA, a whole new section has been added to the selling guide that gives clear guidance on when it can be used and what restrictions apply. Of course the eligibility improvements to the DU Refi Plus are a pretty sweet deal… see article in this issue, Fannie & Freddie Agencies Announce New Closing Date to be Eligible for HARP Refis, for more guidance on this topic.


Fannie Desktop Originator/Desktop Underwriter Release Notes - DU Version 9.1 – Dated August 20, 2013; Updated August 22, 2013; Updated September 10, 2013; Updated October 22, 2013

This is the 3rd update to DU 9.1 and I have never seen FNMA make so many updates and/or additions to a set of release notes for a new version of DU. We have highlighted the changes in red letters and our comments with yellow highlights.

CFPB: Exam/Audit

CFPB – Assessing Diversity Policies – Why it matters!

The CFPB is listed as a party to this announcement, and since they regulate brokers/bankers, that means they will be "assessing" your diversity transparency, your employment diversity, your user of minority-owned and women-owned vendors, and similar processes. It seems as if this is just one more thing to be worried about when the CFPB comes knocking.

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CFPB Release - Federal Regulators Provide Guidance on Qualified Mortgage Fair Lending Risks (dated 10/22/13)

The CFPB is addressing industry concerns on potential violations to ECOA due to the possibility it could be interpreted as a disparate impact (and of course an unintended consequence of the new regulations). Something tells me that if lenders are hesitant to originate loans that are only QM loans, the result could be that a majority of the minority class is not being served by lenders, and that could be a big problem.

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QM Confusion - Basic Principles & Interpretations

Many loan officers and company are trying to figure out the best solutions from multiple angles to be compliant with QM. Read the 4 basic principles and scenarios and what they mean in your everyday mortgage business.


CFPB – Small Creditors, and do I work for one? [Link to Chart Outlining Requirements for Small Creditors]

You will have to ask yourself three questions to determine if you are a small creditor, and thus be eligible for certain loan types including the ability to originate a small creditor QM that does not have a specific DTI cap (although ATR still needs to be determined). Link to chart outlining requirements for small creditors.


USDA Updates - Compensating Factors for Manually Underwritten Loans – AN 4729 – Effective September 1, 2013. [Download Mortgage Talking Points™ flyer, What You Need to Know to Qualify USDA Buyers - Compensating Factors (updated 9-1-2013)]

Sorry this is late, but this update went into effect on 9-1-13. The only change to the “compensating factor” list is that USDA will now consider a 12-month (verified) rental history from a relative. You’ll find an Updated Mortgage Talking Point™ – What You Need to Know to Qualify USDA Buyers: Compensating Factors!

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Notable changes to Refinancing USDA Rural Development Loans with release of (AN) 4738 – Effective October 24, 2013 [Download Chart - USDA Refinance Matrix]

Some significant changes occurred with the release of Administrative Notice (AN) 4738, on October 24, 2013 with regard to refinance transactions. You’ll find a USDA Refinance Matrix that you can print and refer to, to make sure your borrowers qualify.

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