Source: https://www.armco.us/compliance-calendar/2019/4
Timestamp: 2019-04-25 16:11:52+00:00

Document:
requiring the servicer to have written policies and procedures in place to actively identify and monitor unapplied funds until resolution.
To provide flexibility to lenders delivering into Fannie Majors, any combination of seller/servicer numbers will now be accepted. This change will allow for the delivery of multiple servicer numbers per seller number.
Lenders can take advantage of this change for pools with issue dates beginning April 1, 2019.
Fannie Mae has extended the effective date for mortgage assignment forms to April 1 to give lenders more time to update their assignments, and additional flexibility for document custodians to certify loans that still have the previous address. All loans with notes dated on or after April 1 must have the new Fannie Mae address on the associated assignment.
However, to avoid potential certification delays, lenders should begin using our new corporate address as soon as possible.
NOTE: Document custodians have until March 31 to certify loans with assignments with the previous address. New assignments are mandatory for loans with notes dated on or after April 1.
Chapter 5, Topic 3 has been updated to reflect the documents that must be submitted to VA for prior approval of loans.
Chapter 5, Topic 3 provides an updated list of the documents required to request a Loan Guaranty Certificate following the closing of a prior approval loan.
Chapter 5, Topic 4 lists the documents that must be submitted when a loan is selected for Full File Loan Review.
Modified rule published January 2018.
We require lenders to self-report several matters to us, including breaches of selling warranties, suspected misrepresentation or fraud, loan data and eligibility issues, and issues related to the quality control function. Previously, all self-reporting was done via an email mailbox. With the transition to our new and improved loan quality management system, Loan Quality Connect™, the process for self-reporting will now occur more efficiently within that system. The Guide has been updated to remove references to the mailbox and replace them with references to Loan Quality Connect.
Multiple financed properties: We are imposing a maximum limit of two financed properties, including the subject property, for all HomeReady mortgage loans. Financed properties owned by a non-occupant borrower do not have to be included. The additional reserves required for multiple financed properties are not applicable to HomeReady loans.
Boarder income: Our current policy states that a boarder may not be obligated on the mortgage loan. We are clarifying that the boarder may also not have an ownership interest in the property.
Mortgage insurance coverage: We are clarifying that HomeReady loans combined with HomeStyle® Renovation may be delivered with the lower level of mortgage insurance coverage permitted for HomeReady.
Lenders may implement these policies immediately. Desktop Underwriter® (DU®) will be updated to include the multiple financed property policy and boarder ownership policy in a future release, at which time these will be required for DU loan casefiles. For manually underwritten loans, lenders must apply these policies for loans with application dates or after June 15, 2019.
Freddie Mac and Fannie Mae have revised the Multistate Second Home Rider-Single-Family – Fannie Mae/Freddie Mac Form 3890 (rev. 4/19). For more information, visit Freddie Mac's Uniform Instrument News & Updates web page.
As a result, we are updating Guide Exhibit 4, Single Family Uniform Instruments, to reflect the revised Second Home Rider.
In response to Seller feedback, we are updating the documentation requirements language for retirement income, survivor and dependent benefit income, long-term disability income and Social Security Supplemental Security Income to specify that one or more of the required documents (i.e., benefit verification letter, award letter, pay statement, 1099 and bank statement(s)) can be used to verify income type, source, payment frequency, payment amount and current receipt of the income. As a result, separate verification of current receipt of income is not required if the documentation obtained to support income type, source, payment frequency and predetermined payment amount also verifies current receipt of income.
The applicable Loan Product Advisor feedback messages will be updated to reflect these changes.
We are revising the Guide sections related to the sale of fixed-rate Mortgages with annual- and monthly-premium lender-paid mortgage insurance to reflect a 50 basis points maximum Minimum Contract Servicing Spread for Mortgages sold under the fixed-rate Guarantor and MultiLender Swap programs.
On April 3, the Virginia governor signed SB 1737, which provides a 30-day stay of eviction and foreclosure proceedings for furloughed federal employees and contractors during a partial closure of the federal government.
The law grants a tenant or homeowner who defaults on a housing payment after December 22, 2018, a 30-day stay on eviction or foreclosure proceedings.
(iii) an employee of a contractor for the federal government.
The law is effective immediately and expires on September 30 .
We are updating the Servicing Guide D1-3-01 to authorize, but no longer require, servicers to make contact attempts and perform property inspections for a mortgage loan that is current at the time of the disaster event and remains current following the disaster event.
Servicers remain responsible for inspections and borrower outreach in accordance with existing Servicing Guide requirements if the mortgage loans subsequently become delinquent.
create a new allowable fee for Washington e-Note judicial foreclosure actions.
E-5-05 is being updated to clarify that servicers must compensate the law firm for the amount of work actually performed if the foreclosure action is cancelled and not completed, regardless of whether the first or any subsequent milestone invoicing event has been reached.
Servicers must ensure the fees are reasonably prorated to the services rendered.
The new allowable foreclosure fees apply to all matters referred to counsel for initiation of foreclosure proceedings, regardless of referral date, as long as the matter is still active as of April 10, 2019.
The Maine third-party foreclosure sale fee applies to third-party sales that take place on or after April 10, 2019.
The fee proration clarification applies to the law firm’s services invoiced on or after April 10, 2019. We are not requiring servicers to re-open and review compensation for matters in which a law firm’s invoice was previously denied because the next milestone invoicing event had not yet been reached.
We have consolidated shared requirements for sellers and servicers related to the use of MERS in Part B of the Selling Guide.
In accordance with Announcement SEL-2019-01, the Servicing Guide has been updated to remove references to the Quality Assurance System (QAS) in anticipation of the upcoming transition to Loan Quality Connect (LQC).
We’ve updated the Pro Rata Fees and Milestone Invoicing language across all AAA matrices and also updated the Maine, New Hampshire, and Washington (judicial e-Note) allowable foreclosure fees.
In addition, we removed the legal review requirement and note for New York settlement conferences.
Previously, in the event of an Eligible Disaster, Servicers were required to ascertain the number of Mortgages impacted and the extent of damages caused to each Mortgaged Premises, which Servicers may determine through discussions with the Borrower and/or a property inspection. This requirement may be unnecessarily burdensome in situations where a Mortgage was current or no more than 30 days delinquent at the time of the Eligible Disaster and does not become more than 30 days delinquent following the event.
To provide flexibility for Servicers so they can focus their efforts on assisting Borrowers who are or become more than 30 days delinquent, Servicers may, but are no longer required to, determine the extent of damages caused to the Mortgaged Premises where the Mortgage was current or 30 or fewer days delinquent at the time of the Eligible Disaster. However, should such a Mortgage subsequently become more than 30 days delinquent, Servicers must initiate collection efforts in accordance with Guide Chapters 9101 and 9102 and order property inspections as required by Section 9202.12.
In Bulletin 2018-26, we announced that Servicers could maintain and execute winterization and yard maintenance without seasonal time frame restrictions.
In response to Servicer inquiries, we are revising Exhibits 57 and 74 to simplify the winterization and yard maintenance expense amount descriptions.
In Bulletin 2019-7, we updated the Guide to reflect updated requirements to the Note Rate to Coupon spreads and a reduction in the maximum Servicing Spread for Mortgages serving as collateral for Uniform Mortgage-Backed Security and Mortgage-Backed Security (MBS), effective for Mortgages sold under Freddie Mac’s fixed-rate Guarantor or MultiLender Swap program with Settlement Dates on or after June 3, 2019.
Additionally, we revised Guide sections related to the sale of fixed-rate Mortgages with annual- and monthly-premium lender-paid mortgage insurance to reflect the 50 basis points maximum Minimum Contract Servicing Spread for Mortgages sold under the fixed-rate Guarantor and MultiLender Swap programs.
As a reminder, the FHFA has instructed Freddie Mac and Fannie Mae to monitor the Weighted Average Coupon (WAC) of MBS and take actions as appropriate such that MBS WAC would be generally consistent with historical WAC levels. The FHFA, Freddie Mac and Fannie Mae are working to determine an appropriate target MBS WAC, such as 80 basis points or slightly higher (given current guarantee fees and minimum servicing levels).
Based on comments and questions received and as part of our annual review, on March 13, 2019, we updated the Document Custody Procedures Handbook to add clarification around Note exceptions regarding affidavits, powers of attorney, and to make other revisions and clarifications.
This guidance is effective for case numbers assigned on or after April 18, 2019, and will be incorporated into a forthcoming update of the HUD Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1).
This guidance applies to transactions where a person or entity is providing any portion of a Borrower’s MRI.
II.A.4.d.ii (TOTAL) and II.A.5.c.ii (Manual).
Minimum Required Investment (MRI) refers to the Borrower’s contribution in cash or its equivalent required by Section 203(b)(9)(A) of the National Housing Act, which represents at least 3.5 percent of the Adjusted Value of the Property.
The Mortgagee must ensure that the Borrower’s MRI is from a permissible source and meets the following requirements.
The Mortgagee must ensure that the source of funds for the Borrower’s MRI to be provided fully complies with the Source Requirements for the Borrower’s Minimum Required Investment.
(3) anyone who is or will be reimbursed, directly or indirectly, by any party included in (1) or (2) above.
While additional funds to close may be provided by one of these sources if permitted under the relevant Sources of Funds (II.A.4.d.iii (TOTAL) and II.A.5.c.iii (Manual)) requirements, none of the Borrower’s MRI may come from these sources.
A Family Member may provide the Borrower’s MRI in accordance with Section 203(b)(9)(B) of the National Housing Act.
In accordance with the Prohibited Sources of Minimum Cash Investment Under the National Housing Act – Interpretive Rule, HUD does not interpret Section 203(b)(9)(C) of the National Housing Act to prohibit Governmental Entities, when acting in their governmental capacity, from providing the Borrower’s MRI where the Mortgage is being originated as part of a Governmental Entity homeownership program.
Where any portion of the Borrower’s MRI is provided by a person or entity other than the Borrower, the Mortgagee must also obtain documentation to support the permissible nature of the source of those funds.
The Mortgagee must document that all portions of the Borrower’s MRI come from an acceptable Source of Funds (II.A.4.d.iii (TOTAL) and II.A.5.c.iii (Manual)) in accordance with both the source requirements for the specific type of funds used, and the specific documentation requirements under the additional Source Requirements for the Borrower’s MRI set forth in this section.
The Mortgagee must document that the Borrower’s MRI was provided by the Governmental Entity, as either a gift or through Secondary Financing, in a manner consistent with the National Housing Act and the additional provisions of this section. The Mortgagee must document that the Governmental Entity incurred prior to or at closing an enforceable legal liability or obligation to fund the Borrower’s MRI in its governmental capacity. It is not sufficient to document that the Governmental Entity has agreed to reimburse the Mortgagee for the use of funds legally belonging to the Mortgagee to fund the Borrower’s MRI.
the Governmental Entity has, at or before closing, authorized a draw on its account to provide the funds towards the Borrower’s MRI.
The Mortgagee must either document the actual transfer of funds in satisfaction of the obligation or liability by the Governmental Entity prior to the submission of the Mortgage for insurance or obtain documentation of the satisfaction of the obligation or liability by the Governmental Entity after submission and maintain such documentation in the Mortgagee’s files.
The failure of the Mortgagee to demonstrate the downpayment assistance provider has transferred the funds, the failure of the Governmental Entity to satisfy the obligation or liability, or any demand for reimbursement or indemnification for such funds by the Governmental Entity may call into question whether FHA requirements have been met and result in a determination that the funds were, in fact, provided by a prohibited source.
We are increasing the approved Servicer reimbursement amounts for attorney fees associated with uncontested foreclosures in the States listed in Guide Exhibit 57A.
We are increasing the limit for expense code 600021 (Skip Trace/Investigative Report) from $90 to $160.
As a reminder, Servicers must verify that legal fees and costs incurred are reasonable and customary for the area in which the Mortgaged Premises is located. For reimbursement of expenses that exceed the current expense limits in Exhibit 57A, Servicers must request Freddie Mac's approval prior to incurring the expense.
We are updating Exhibits 57A and 74 to reflect these changes.
The clarifying amendments in this final rule are largely technical in nature.
Section 701.20 Suretyship and guaranty.
The final rule makes minor conforming amendments to § 701.20(c).
The final rule makes conforming amendments to the section governing requirements for suretyship or guaranty agreements by removing outdated cross-citations to the loans to one borrower or group of associated borrowers limit in §§ 723.2 and 723.8 of the member business lending regulation and adding an updated cross-citation to § 723.4(c).
The final rule divides § 701.21(c)(4) into two new paragraphs. One paragraph, § 701.21(c)(4)(i), states the general rule that loans carry a 15-year maturity. The other, § 701.21(c)(4)(ii), makes more explicit that there are exceptions to the general 15-year maturity limit in § 701.21(e) through (g) for various types of credit union loans.
The final rule maintains all of current § 701.21(c)(4) in § 701.21(c)(4)(i), which articulates the general 15-year maturity limit that exists on FCU loans. However, the final rule also adds language to clarify that the maturity for a new loan under GAAP is calculated from the new date of origination.
Section 701.21(c)(4)(ii)(A) of the final rule cross-cites to the exception to the general 15-year maturity limit in § 701.21(e) regarding covered loans secured, in full or in part, by the insurance or guarantee of, or with an advance commitment to purchase the loan, in full or in part, by the Federal Government, a State Government or any agency of either.
Section 701.21(c)(4)(ii)(B) of the final rule cross-cites to the exception to the general 15-year maturity limit in § 701.21(f) regarding covered home improvement, mobile home, and second mortgage loans.
Section 701.21(c)(4)(ii)(C) of the final rule cross-cites to the exception to the general 15-year maturity limit in § 701.21(g) regarding covered 1-4 family real estate loans.
The final rule revises § 701.21(c)(5) to add cross-citations to the specific requirements on loans to a single borrower or group of associated borrowers in the loan participation rule, § 701.22(b)(5)(iv), and member business lending rule, § 723.4(c).
(e) Insured, Guaranteed, and Advance Commitment Loans.
The final rule revises § 701.21(e) to make more explicit that the maturity limits applicable to loans covered by paragraph (e) are notwithstanding the general 15-year limit in paragraph (c)(4). The final rule also adds a cross-citation to paragraph (c)(4).
The final rule retains almost all of current § 701.21(f), but inserts some additional language to improve clarity.
The final rule revises § 701.21(f)(1) to make more explicit that the maturity limit applicable to loans covered by paragraph (f) is notwithstanding the general 15-year limit in paragraph (c)(4). The final rule also adds a cross-citation to paragraph (c)(4).
The final rule retains almost all of § 701.21(g), but inserts some additional language to improve clarity.
The final rule revises § 701.21(g)(1) to make more explicit that the maturity limit applicable to loans covered by paragraph (g) is notwithstanding the general 15-year limit in paragraph (c)(4). The final rule also adds a cross-citation to paragraph (c)(4).
As described in more detail below, the final rule makes minor conforming amendments to § 701.22(b) regarding loan participations.
The final rule updates the cross-citation in § 701.22(b)(1), which provides that for a federally insured credit union to purchase a participation interest in a loan, the loan must comply with all regulatory requirements to the same extent as if the purchasing federally insured credit union had originated the loan. Specifically, the final rule changes the outdated cross-citation in § 701.22(b)(1) from § 723.8 to § 723.4(c).
Changes identified in Section II.A may be implemented immediately (March 27, 2019), but must be implemented for mortgages with case numbers assigned on or after April 29, 2019.
Updated sales guidance for properties encumbered with a PACE obligation to require the sales contract to specify satisfaction of the PACE obligation by the seller at or prior to the closing to reflect ML 2017-18.
Updated guidance to require lender to notify the appraiser that the PACE obligation will be paid off as a condition of loan approval to reflect ML 2017-18.
Clarified that a subordination agreement is not required for federal tax liens (in repayment).
Updated guidance for non-occupying co-Borrowers with existing FHA-insured Mortgages.
Updated guidance to clarify that properties that remain encumbered with a PACE obligation are not eligible for FHA Mortgage insurance to reflect ML 2017-18.
Added guidance on determining reasonable share of appreciation.
Updated Borrower’s total Mortgage Payment to make any PACE obligation classified as a special assessment ineligible to reflect ML 2017-18.
Provided guidance on the use of Third Party Verification (TPV) services to verify a borrower’s employment, income, and asset information, to reflect ML 2019-01.
Added clarifying guidance to treat Tip Income the same as Overtime or Bonus Income.
Added clarifying language for calculation of Effective Income.
Edited mentions of Fannie Mae Form 216/Freddie Mac Form 998 for consistency.
Updated documentation guidance for evidencing transfer of gifts to the Borrower or settlement agent.
Replaced “loan instruments” with “Mortgage and Note” to provide more specific guidance.
Updated link and removed specific reference to 2006 International Energy Conservation Code (IECC) to ensure continuous access to the most recent IECC approved by HUD.
Clarified the timeframe, for pre-closing or post-closing, for submitting final underwriting review decision documents to reflect ML 2016-21.
Updated guidance to distinguish which certifications are required for purchase or refinance transactions.
Replaced “subordinate loan agreement” with “Mortgage” and “Note” to provide specific guidance for documentation requirement.
Implemented a change in the test case binder colors, and added a timeframe for Mortgagees entering the Direct Endorsement Test Case process to reflect ML 2016-21.
Implemented timeframe changes for documents that are submitted for review from pre-closing to post-closing to reflect ML 2016-21.
Replaced “general contractor” with “project manager” to reflect how work is being completed.
Removed requirements to use an FHA Roster Inspector, to reflect ML 2019-04.
Updated language to clarify PACE obligations meeting certain requirements as eligible debt under the “Rate and Term” and “Simple Refinances,” to reflect ML 2017-18.
Clarified that evidence of funds to close must follow the “applicable sections” of Source of Funds.
Removed definition for ten-year warranty.
Clarified that for properties existing for less than one year both a building permit or final inspection and an appraisal evidencing property is 100 percent complete are required to reflect ML 2019-04.
Removed requirements for a 10-year warranty, to reflect ML 2019-05.

References: § 701
 § 723
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 723
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 701
 § 723
 § 723