June 2017
MortgageCurrentcy.com Rules and Regulation Updates

View The Latest Q & A Issue

Fannie Mae

Fannie Mae Releases Update to Underwriting FAQs – Updated May 2017

You may not even want to read this article. This list has been fairly static for the past couple of years. It’s like Fannie Mae is just keeping the questions there and updating the links to the selling guide reference if something changes. Remember to use the Ask the Experts Help Desk to get your questions answered by the experts. (Fannie Mae Releases Updated Underwriting FAQs – Updated May 2017)


Fannie Updates FAQs for Appraisal and Property Related Questions – May 2017

There are 9 updated FAQ’s and 2 NEW ones. Both of the new questions fall under the topic heading of “Appraiser Selection and Management”. And the first new question is a doozy. Read the answers and you’ll be as surprised as we were! • Q7: Will Fannie Mae accept appraisals when an unlicensed or uncertified appraiser or appraiser trainee completes the property inspection? • Q9: What if the contract is amended after the appraisal is completed? (Appraisal and Property-Related Frequently Asked Questions (FAQs) – Updated May 2017 )


Fannie DU Version 10.1 Release Notes Topics - Scheduled for Release July 29, 2017 [Maximum DTI | Disputed Tradelines | ARM LTVs ratios | Self-employment Income Docs | DU Validation Services | Property Inspection Waivers]

There is a lot of good news with this update scheduled for July 29, 2017. Fannie is really going to lighten up on their risk assessment for disputed tradelines, self-employed borrowers that only have to get one year of tax returns, increased ARM LTV’s, the multiple financed message improvement regarding required reserves, treatment of timeshares, employment offers and contracts, and so on. (Desktop Originator/Desktop Underwriter Release Notes DU Version 10.1 – New Release scheduled for the weekend of July 29, 2017 – Dated May 30, 2017)

Freddie Mac

Freddie Mac Updates – Bulletin 2017-17 [Download UPDATED Mortgage Talking PointsTM flyer, HO-6 Condo Insurance Policy Simplified]

The biggie clarification in this bulletin is ‒ anytime you are refinancing a property, regardless of purpose, occupancy, LTV, length of ownership, and so on, you are not allowed to use any proceeds from any refinance as reserves….. ever. This is true for both Freddie and Fannie, and this source of funds has always been ineligible for use as reserves, technicalities and all. (Freddie Mac Bulletin 2017-7 – Dated May 17, 2017 )


Freddie - Updates Multiple Selling Guide Topics • Automated Collateral Evaluation (or ACE) – Effective 6-19-17 • Condos – Effective immediately & August 31, 2017 • Sales Contracts Amendments – Effective immediately • Accessory Units – Effective 8-31-17

Sometimes we wonder if Freddie Mac has a person whose only job is to review Fannie Mae’s selling guide and who says, if they can do it, we should do it too. And then they do. They have matched Fannie with the only difference being the effective dates. (Freddie Mac Bulletin 2017-8 – Dated May 31, 2017 )


FHA – DU For Government Loans – Undisclosed Mortgage Debt; Secondary Financing; Asset Calculations Formula Updated June 24, 2017

The most impactful change I see is the clarification that the presence of any undisclosed debt does not require an automatic downgrade to manual underwriting. Only undisclosed mortgage debt that meets the manual downgrade definition of derogatory requires this downgrade. (DU for Government Loans Release Notes, June 2017 Release, May 16, 2017)


Location of Comparables in VA Appraisal Reports – Cir 26-17-14

It appears VA has seen an uptick in the requests for appraisal revisions and is hoping that better detailed explanations from the appraisers will help avoid this. This would certainly make sense if you have a property where a Staff Appraisal Reviewer (SAR) is questioning the use of the comparables that are many miles from the subject property. (Circular 26-17-14, Clarification of Locational Requirements of Comparable Sale Properties for VA Appraisals, May 29, 2017 )


USDA Rural Development Revises Property & Appraisal Requirements - Handbook HB-1-3555 – Effective 5-17-17

USDA Rural Development recently published revisions to portions of Handbook HB-1-3555 via Procedure Notices 498 (published 5/17/2017). We cannot begin to express how significant the revisions to Chapter 12 are. These 10 major revisions cleared up a number of issues impacting loan origination.