Fha News

Changes in Adverse Action Disclosure Requirements

LO Compensation Policy

Stay Updated

Connect with us:

Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain mortgage compliance tips and updates.

We hope that you find the content informative and useful. As always, your feedback is appreciated.

New Training Series of Webinars

We asked many of you, “What is your biggest compliance challenge?” And the answer for many was a resounding, “Keeping up with the changes!” As regulations continue to change and it becomes harder to keep up, we recognized the need to offer you more specific trainings.

We are pleased to announce our new Training Series of webinars, to give you the detailed training you need. These webinars will be targeted and concise trainings, based on more specific compliance needs. Our Training Series webinars will be held once a month for 30-45 minutes and include about 15 minutes of Q&A. The Training Series webinars will be offered for a nominal fee. Our first one will be “TILA & MDIA” on July 21.

We will also continue to offer our Free Series once or twice a quarter, where the webinars will be based on more broad overviews of compliance topics. The next free webinar will be “QC Findings Are Done… Now What?” on August 25.

* Watch your inbox for an invitation to these webinars in the next few days.

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Get compliance updates right when they come out, on Twitter and Facebook.

Other Recent Announcements

Here are a few recent announcements that we thought you should know about:

On July 6, 2011, the Federal Reserve Board and the Federal Trade Commission issued rules that will change the adverse action disclosure requirements under Equal Credit Opportunity Act and the Fair Credit Reporting Act. The rule will be effective 30 days from the day the rule is published in the Federal Register.

Announcement on FederalReserve.gov

HUD’s Final Rule Regarding SAFE Act

On June 29, 2011, HUD published the final rule regarding the SAFE Act. The rule details HUD’s oversight responsibility over minimum requirements for state level SAFE Act implementation.

Final rule on OFR.gov

Webinar Questions & Answers

GFE Webinar Q&A

We want to thank everyone who attended our webinar: “GFE Compliance” in June. As promised, we have posted the slides and answers to questions asked.

Download the slides

We have included the first three questions below. *Please visit our website to read all 64 questions and answers.

Question 1 – Discounts are charged in the origination charge. What happens if you have a borrower who agreed to a discount and then changes his mind? If you cannot change the origination charge, how can you fix this?

Answer – If you are including the discount points in your origination charge then you are not allowed to change your origination charge. Discount points can be shown on Box 3 of Block 2 of the GFE. If discounts are listed here, you can change them as the rate changes.

Question 2 – RESPA states that Box 1 and 2 in Important Dates do not change. Is this true? If not, when does it change?

Answer – Question 1 in the Important Dates section will change when loan locking information changes. Question 2 in the Important Dates section will not change and will remain the same on all subsequent re-issues of the GFE.

Question 3 – If the seller is responsible for the transfer tax in our state, is it required to be disclosed on the GFE?

Answer - Please refer to RESPA FAQ (page 34 quesiton 2) Q: How is the transfer tax disclosed in Block 8 of the GFE?
A: The amount the borrower is likely to pay for transfer taxes is disclosed in Block 8 of the GFE. In some areas this amount, as a matter of practice, is governed by state or local laws. If state or local law is unclear or does not specifically attribute transfer tax to a seller or borrower, the amount to be disclosed on the GFE is governed by common practice or experience in the locality of the property.

If the seller is paying a portion of the transfer tax that was not disclosed on the GFE, then that portion should be listed in the seller’s column in the 1200 series on the HUD-1. …Read the rest of the questions and answers on our website.

HUD/FHA Update

ML 2011-20: Termination of the HOPE for Homeowners (H4H) Program

- Provides instructions on how to process cases during phasing out of HOPE for Homeowners (H4H) Program.

ML 2011-21: Revised Instructions for Preparing American Land Title Association (ALTA)/American Congress on Surveying and Mapping (ACSM) Land Title Survey for HUD Multifamily Housing Programs

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- Revises instructions for preparing ALTA/ACSM Land Title Survey for Multifamily programs.

ML 2011-22: Condominium Approval Process for Single Family Housing – Consolidation and Update of Approval Requirements

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- Updates requirements and procedures of Condominium Approval Process.

ML 2011-23: Unemployment Special Forbearance: Temporary Program Changes and Clarifications

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- Temporarily amends Type I special forbearance program for unemployed borrowers.

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

SVC-2011-07: Updates to Foreclosure Time Frames and Imposition of Compensatory Fees

- Communicates expectations regarding max allowable time frame to complete foreclosure process, and imposition of compensatory fees.

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SVC-2011-08: Delinquency Management and Default Prevention

- Announces new servicer requirements to:

Simplify servicing process
Help servicers contact delinquent borrowers more effectively
Determine eligibility and offer foreclosure prevention alternatives

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SVC-2011-09: Servicing Fees on Modified Mortgage Loans and Mortgagee Clause for Loans Registered with MERS

- Describes policy changes to:

Servicing fees on modified mortgage loans
Clarification of mortgagee clause for loans registered with MERS

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Servicing Notice, dated 6/10/11: Hawaii Legislative Changes Affecting Non-Judicial Foreclosures

- Announces that Fannie Mae foreclosures in Hawaii must be commenced as judicial foreclosures

- and all pending Fannie Mae non-judicial foreclosures in Hawaii that haven’t been proceeded to sale should be dismissed and converted to judicial foreclosures

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SVC-2011-10: June 2011 Servicing Guide Update

- Announces release of updated Servicing Guide.

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LL-2011-04: Extension of HOPE Hotline Borrower Counseling Reimbursement

- Extends time period for servicers to request reimbursement for HOPE Hotline counseling.

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SVC-2011-11: Updates to Delinquency Status Codes

- Updates Fannie Mae’s policy on delinquency status reporting.

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SVC-2011-12: Mortgage Insurance Coverage and Confirmation of Repurchase Policies and Remedies for Warranty Violations

- Reminds lenders to ensure that required mortgage insurance is maintained

- Provides new requirements for reporting notifications of mortgage insurance rescissions, mortgage insurer-initiated cancellations, and claim denials

- Confirms Fannie Mae’s repurchase policies, required timelines and remedies relating to representation and warranty violations

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SEL-2011-05: Selling Guide Updates

- Updates Selling Guide, including:

Delayed financing exception
Removal of reverse mortgages
Misc. condo and co-op updates
Misc. Selling Guide updates
Updates to the Requirements for Document Custodians

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LL-2011-05: Participation in HUD’s Emergency Homeowners’ Loan Program

- Provides guidanceon servicer responsibilities regarding Emergency Homeowners’ Loan Program (EHLP).

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To view all Fannie Mae Announcements and Letters for the year, visit

Bulletin 2011-11: Servicing Alignment Initiative and Hawaii Legislative Changes Affecting Non-judicial Foreclosures

Freddie Mac Update

- Announces Servicing Alignment Initiative

- Provides requirements to process foreclosures in Hawaii, due to recent Hawaii law changes

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

No recent VA circulars.

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To view VA Circular/News for 2010, visit the VA website.

This information has been taken from various public resources and does not constitute legal advice.

Feel free to call us with any questions at 877-226-3216 or reply to this email.

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Jun
27
2011

Free Mortgage Compliance Updates & Webinars

With mortgage regulations and guidelines constantly changing, it can be hard to keep up. Now you can get instant updates right when the announcements come out—Just follow us on Twitter or Facebook. We will also keep you informed of our upcoming webinars and share helpful compliance resources.

You can also get many useful compliance resources and a summary of each month’s agency announcements in our free monthly newsletter. Sign up today for the MCA Monthly Compliance Update, which includes:

Agency announcements
- HUD/FHA
- Fannie Mae
- Freddie Mac
- VA
Invitations to upcoming compliance and QC webinars
Slides and Q&A from previous webinars
Summaries of major compliance issues

Regulations keep changing, but we’ll help you comply. We’ll keep you updated, and we can help you with all your compliance and quality control needs:

No Comments »

Jun
03
2011

MCA Monthly Compliance Update – June 2011

June Butterfly Picture from freestockphotos.biz

MCA Monthly Compliance Update
June 2011

In This Issue

Our Services

https://www1.gotomeeting.com/register/640246888

* LO Compensation Policy *

Stay Updated

Connect with us:

Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain mortgage compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

Join our free monthly webinar “GFE Compliance.”

Review how to fill out the GFE correctly and avoid common mistakes.

Join our free webinar on Thursday, June 16 at 1:00 p.m. MDT.

Reserve your webinar seat now at:

More than a year after its implementation, there is still a lot of frustration and confusion about the GFE. We have received many requests for another webinar about the GFE, so we are pleased to announce our next free webinar “GFE Compliance” on:

Thursday, June 16 at 1:00 pm MDT (3:00 pm Eastern)

(*Note: This webinar is one hour later than usual, at 1:00 instead of 12:00.)

Join us as we discuss the following:

How to fill out the GFE properly
What we’ve learned since the new GFE was implemented
Common GFE findings from quality control audits
Q&A session to answer your GFE questions

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Get compliance updates right when they come out, on Twitter and Facebook.

HUD/FHA Update

No recent mortgagee letters.

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

LL-2011-03: New Fannie Mae-Approved Mortgage Insurer

- Announces new Fannie Mae-approved mortgage insurer, Genworth Residential Mortgage Assurance Corporation.

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SEL-2011-04: Selling Guide Updates

- Updates selling guide related to:

Deferred student loans
Documentation requirements for retirement accounts
Prohibition of certain mortgage insurance agreements
Resubmission to DU after closing
MERS
Misc. Selling Guide updates

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Servicing Notice, dated 5/26/11

- Announces that Fannie Mae will conduct reapplication process for Retained Attorney Network in 16 states.

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SVC-2011-06: Updates to Imminent Default Definition and Determining Market Value for Preforeclosures

- Updates several servicing policies, including:

Imminent default definition for mortgage loan modifications
Determining property market value for preforeclosure sales and deeds-in-lieu of foreclosure

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To view all Fannie Mae Announcements and Letters for the year, visit

Bulletin 2011-9: Servicing

Freddie Mac Update

- Makes changs to servicing requirements, or updates:

Mortgage clause notice
Designated counsel for DC and WV
Short payoff remittance requirements
Mortgage data ownership and usage
Servicing in accordance with applicable law
Guide updates

Bulletin 2011-10: Selling and Servicing

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- Updates certain selling and servicing requirements related to:

Mortgage eligibility and credit underwriting
Property eligibility and appraisal requirements
MERS requirements

Circular 26-11-7: SAHSHA Data and GWOT Reporting

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

- Reminds Loan Guaranty personnel to keep accurate and timely records in SAHSHA.

- Reminds staff to maintain Loan Guaranty reports that track designated participants in Global War on Terrorism (GWOT).

Circular on VA.gov

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Circular 26-11-8: Elimination of the Prior Loan Validation Requirement

- Announces that Prior Loan Validation (PLV) is no longer required on VA Interest Rate Reduction Refinance Loans (IRRLs).

Circular on VA.gov

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To view VA Circular/News for 2010, visit the VA website.

This information has been taken from various public resources and does not constitute legal advice.

Feel free to call us with any questions at 877-226-3216 or reply to this email.

No Comments »

Mar
03
2011

MCA Monthly Compliance Update – March 2011

MCA Monthly Compliance Update

March 2011

In This Issue

Our Services

Quality Control Plan Implementation

https://www1.gotomeeting.com/register/991690536

Stay Updated

Connect with us:

Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

Join our free monthly webinar “Compliance Q&A Webinar.”

We need your questions: Please send us your compliance questions for our upcoming webinar.

Get answers to your questions about RESPA/GFE, TIL, QC Plans, etc.

Join our free webinar on Thursday, March 17 at 12:00 p.m. MDT.

Reserve your webinar seat now at:

Many of you requested a webinar just for Q&A, and we are pleased to announce our first webinar dedicated solely to answering your mortgage compliance questions. Join us on March 17 for your chance to take advantage of our combined compliance knowledge and resources. Since this webinar will be customized to answer your questions, it is vital that we receive your questions in advance. This will also help us prepare resources for you and others during the webinar.

*We need questions prior to the webinar. Please email your questions to info@mortgagecomplianceadvisors.com or submit them in the “Questions & Comments” box during registration. Thank you.

We will be happy to answer your questions about:
-  RESPA/GFE
-  TIL
-  QC Plans
-  Other

Who should attend?
This FREE webinar is designed for mortgage compliance professionals. Feel free to forward this registration link to your colleagues who also work in compliance/QC.

(You will receive a link to the SLIDES in a reminder email sent ONE HOUR before the webinar starts.)

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For real time compliance news, you can now follow us on

Twitter and Facebook.

Audit Update

Did you know…?

Brokers are not required to issue an initial TIL or initial Servicing Disclosure Statement.

In accordance with RESPA and TILA, we will not issue a finding to brokers if these documents are not in the file. Check out the regulations:

Servicing Disclosure Statement: Delivery. The lender, table funding mortgage broker, or dealer that anticipates a first lien dealer loan shall deliver the Servicing Disclosure Statement within 3 business days from receipt of the application by hand delivery, by placing it in the mail, or, if the applicant agrees, by fax, e-mail, or other electronic means. In the event the borrower is denied credit within the 3 business-day period, no servicing disclosure statement is required to be delivered …Read the rest on our website.

Webinar Questions & Answers

QC Plan Webinar Q&A

We want to thank everyone who attended our webinar: “Essentials of a Compliant QC Plan.” As promised, we have posted the slides and answers to the questions asked.

Download the slides

We have included the first three questions below. *Please visit our website to read all 10 questions and answers.

Question 1 – How do you go about verifying assets?

Answer – You would attempt to get the company to verify the information you have in your file is correct, via new VOD or phone conversation. You will want to assure that the asset documentation has not been forged or altered in any way.

Question 2 – We are a broker and most of our lenders will require a quarterly audit of our FHA loans. You mentioned the detailed QC Plan reviews are trickling downhill. Do you foresee lenders requiring their approved brokers to do more than the 10% of FHA loans being audited? The FHA loans are all we’re auditing at this time. Do we need to include all of our other loan types?

Answer – I do not anticipate any lenders requiring more than the FHA required 10% selection. We are certainly seeing a bigger focus on Quality Control from all lenders and agencies. You are only required to audit files if your investors or licensing agencies require it. However, I would recommend you QC at least 10% of all your loans. This will give you a good baseline of the quality and risk level of all the loans you originate.

Question 3 – What is acceptable to meet occupancy certification requirements?

Answer - There is not guidance on this topic. However, if audited, you will need to justify that a satisfactory attempt to verify occupancy was conducted. …Read the rest of the questions and answers on our website.

HUD/FHA Update

ML 2011-09: Home Equity Conversion Mortgage (HECM) Counseling: Waiver of HECM Counseling Fees and Activities Included in the Time Recorded Portion of the HECM Counseling Certificate

- Provides guidance to counselors and lenders regarding:

When HECM counseling fee should be waived
Activities performed by HECM counselor that are included in amount of time recorded on form HUD-92902
Allowing agencies to establish counseling fees based on certain criteria

ML 2011-10: Annual Mortgage Insurance Premium Changes and Guidance on Case Numbers

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- Introduces 25 basis point increase to Annual Mortgage Insurance Premiums, effective 4/18/11

- Provides guidance on validity period of case numbers and new requirements for requesting them

SVC-2011-02: Updates to the Mandatory Retained Attorney Network

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ML 2011-11: FHA Refinance Transactions

- Clarifies and updates existing guidance about FHA refinance transactions. Entire letter on HUD.gov

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ML 2011-12: Tier Ranking Scores – Incentive Round 42

- Announces FHA servicing lenders’ tier rankings for Round 42. Entire letter on HUD.gov

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ML 2011-13: Revision of ML 10-30, Extension of Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223 (f)

- For Multifamily Mortgagees: Extends temporary authority from ML 2010-21 until February 17, 2012. Entire letter on HUD.gov

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ML 2011-14: Subordination, Non-Disturbance and Attornment Agreements

- For Multifamily Mortgagees: Provides guidance on use of Subordination, Non-Disturbance and Attornment Agreements (SNDA) for commercial leases in certain FHA insured projects… Entire letter on HUD.gov

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

Notice, dated 2/10/11: Termination of Relationship with Ben-Ezra & Katz Law Firm

- For Florida mortgages: Servicers may not refer any future Fannie Mae matters to the Ben-Ezra & Katz law firm. Announcement on eFannieMae.com

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LL-2011-02: Mortgage Loan Data Requirements Update

- Updates lenders on status of Federal Registry requirements for originators and related Fannie Mae delivery data requirements. Announcement on eFannieMae.com

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- Adds 14 new jurisdictions to mandatory retained attorney network… Announcement on eFannieMae.com

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To view all Fannie Mae Announcements and Letters for the year, visit

Bulletin 2011-3: Freddie Mac Service Loans Application Terms and Conditions for Use

Freddie Mac Update

- Gives terms and conditions for use of Service Loans application, which are added to Guide Chapter A50. Bulletin on FreddieMac.com

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Bulletin 2011-4: Selling and Servicing

- Lowers max LTV, TLTV, and HTLTV ratios to 95% for all conventional mortgages

- Provides additional guidance for treatment of sales concessions, etc. …

Circular 26-11-4: Loan Guaranty Regulatory Update

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

- Announces completion of VA’s Loan Guaranty regulatory restructuring in Title 38 of Code of Federal Regulations (CFR), part 36. Entire circular on VA.gov

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Circular 26-11-5: New Loan Modification Regulation

- Announces primary changes for modifying VA loans resulting from a recent regulatory revision. Entire circular on VA.gov

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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216 or reply to this email.

1 Comment »

Jan
06
2011

MCA Monthly Compliance Update – January 2011

MCA Logo

Mountain picture

MCA Monthly Compliance Update

January 2011

In This Issue

Our Services

https://www1.gotomeeting.com/register/638319816

Stay Updated

Connect with us:

Join our free monthly webinar “Common Compliance Findings of 2010 & How to Prevent Them.”

Learn about common audit findings and tips to prevent them.

Join our free webinar on Thursday, January 20 at 12:00 p.m. MST.

Reserve your webinar seat now at:

Join us for a free webinar on January 20, where we will look at all our quality control audit findings from all companies in the year 2010 and break it down into useful information for your company. We’ll see what the common trends were and alert you to negative trends we are seeing in the marketplace. We will also share helpful tips on how you can reduce the number of findings in your next quality control audit. We encourage you to submit questions for our panelists in the box below and also during the Q&A session at the end of the webinar.

Common findings from all companies’ QC audits in 2010
Negative trends in the marketplace
Tips to reduce your findings
Q&A session

(*You will receive a link to the SLIDES in a reminder email sent ONE HOUR before the webinar starts.)

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For real time compliance news, you can now follow us on

Twitter and Facebook.

Coming in 2011 to MCA and its Clients

Coming in 2011

To further help our current clients, we will be adding and improving various services in the upcoming year. You can look forward to these changes in the coming months.

Roundtable discussions for clients

We will be hosting online Round Table Discussions with our clients to open dialogue and discussion about common compliance issues.

Enhanced state compliance

We are enhancing our state compliance service to be more effective for our clients.

Trend tracking reports on all findings reports

Trend tracking reports will be included in each new Findings Report issued. This will allow our clients to track company and underwriter performance over an extended period of time.

Updated website

We will be updating our website to include a fresh look and to contain more resources for your compliance needs.

HUD/FHA Update

ML 2010-41: Construction Specifications Institute (CSI), MasterFormat Editions

- For Multifamily Mortgagees: The construction specifications template for FHA new construction and substantial rehabilitation projects has changed… Entire letter on HUD.gov

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ML 2010-42: Federal Home Loan Bank – Affordable Housing Program, Homeownership Set-Aside Grant Program

- Provides guidance on FHLB AHP Homeownership Set-Aside Program in conjunction with FHA financing. Entire letter on HUD.gov

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ML 2010-43: Flood Zone Requirements for Federal Housing Administration (FHA) Insured Mortgages

- Announces that FHA now requires flood zone determination on all properties
- Prohibits FHA Mortgage Insurance for properties in designated coastal barriers

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ML 2011-01: Home Equity Conversion Mortgage Property Charge Loss Mitigation

- Provides loss mitigation guidance for HECMs that are delinquent due to unpaid property charges… Entire letter on HUD.gov

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ML 2011-02: Quality Control Requirements for Direct Endorsement Lenders

- Clarifies FHA’s quality control requirements in light of changes to lender eligibility criteria:

All FHA-approved mortgagees must perform quality control reviews of their Sponsored Third Party Originators
Mortgagees can determine the appropriate sample amount of loans for those reviews (such as 10% of all loans)

All Early Payment Defaults (EPDs) still need to be reviewed
- Must be reviewed within 45 days from the end of the month the loan is reported as 60 days past due
Rejected applications still need to be reviewed
- Must be reviewed within 90 days from the end of the month in which the decision was made

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

Notice, dated 12/15/10: Co-op Share Loan Documentation and Requirements for Document Custodians Update

- Updates state-specific requirements for co-op share loans, such as which documents must be delivered to document custodian. Updates Connecticut requirements and adds Alaska, Indiana, and Washington. Announcement on eFannieMae.com

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LL-2010-15: Uniform Appraisal Dataset and Uniform Collateral Data Portal

- Gives overview of:

Uniform Appraisal Dataset requirements

Uniform Collateral Data Portal

Future updates to Fannie Mae policies

Notice, dated 12/17/10: Reminder of Duties Regarding Confidentiality of Fannie Mae Mortgage Files and Borrower Payment Records

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- Reminds servicers of duty to ensure security, integrity, and confidentiality of borrower, property, and other information related to loan. Announcement on eFannieMae.com

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Notice, dated 12/17/10: Broker Price Opinion Providers and Pricing Structure

- Notifies servicers of four new Broker Price Opinion (BPO) providers

- Clarifies that, effective February 1, 2011, servicers must diversify referrals among two or more BPO providers

- Announces new reimbursement rates

SVC-2010-18: Technology Fees and Foreclosure and Bankruptcy Referrals

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- Amends servicing requirements regarding technology usage and electronic invoice submission charges to attorneys and trustees and foreclosure and bankruptcy referrals. Announcement on eFannieMae.com

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SEL-2010-17: Updated Flow Business Pricing Requirements

- Summarizes the updated and new loan-level price adjustments (LLPAs) Announcement on eFannieMae.com

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To view all Fannie Mae Announcements and Letters for the year, visit

Bulletin 2010-31: Uniform Appraisal Dataset and Uniform Collateral Data Portal Requirements

Freddie Mac Update

- Provides requirements for the Uniform Appraisal Dataset (UAD) and Uniform Collateral Data Portal (UCDP). Bulletin on FreddieMac.com

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Bulletin 2010-32: Extension of Service Member Foreclosure Protection

- Extends service member foreclosure protection to 12/31/11. Bulletin on FreddieMac.com

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

Circular 26-10-15: Guidance for Implementing New SAH Regulations

- Provides guidance on processing Specially Adapted Housing (SAH) cases under new rules. Entire circular on VA.gov

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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216 or reply to this email.

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Nov
04
2010

MCA Monthly Compliance Update – November 2010

Picture of autumn leaves

MCA Monthly Update

November 2010

In This Issue

Our Services

https://www1.gotomeeting.com/register/681262872

Stay Updated

Connect with us:

Join our free monthly webinar “Reviewing Red Flags of Fraud.”

We have posted the slides from last month’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.

Review common mortgage fraud issues and the FTC’s Red Flags Rule enforced 12/31/10.

Join our free webinar on Thursday, November 18 at 12:00 p.m. MST.

Reserve your webinar seat now at:

The December 31st enforcement date is fast approaching for the Federal Trade Commission’s Red Flags Rule. Join us for a free webinar on November 18, where we will have a review of common mortgage fraud issues, as well as valuable information and a Q&A session about the FTC’s Red Flags Rule. (It should be noted that the extension of the enforcement deadline to December 31, 2010 does not affect other federal agencies’ enforcement of the original November 1, 2008 deadline.) We hosted a webinar in May about the red flags of fraud, and this month’s webinar will update the information and discuss any new developments.

This free webinar is open to everyone, and we encourage you to submit your questions during registration or to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on

Twitter and Facebook.

Download the slides in handout format

Webinar Questions and Answers

Webinar Q&A from “Managing the Year of Change”

We want to thank everyone who attended our webinar: “Managing the Year of Change.” As promised, we have posted the slides and answers to the questions asked.

Download the slides

We have included the first three questions below. *Please visit our website to read all 7 questions and answers.

Question 1 – You have stated that MDIA defines an application the same way as a GFE. So, you are saying that if we do not disclose a GFE because we do not have all of the pieces, then we do not have to issue the TIL either?

Answer – Yes. This is correct. TILA/MDIA shares RESPA’s definition of an application. If you do not have what is defined as an application then you are not required to disclose a TIL statement. This can be found in 12 CFR 226.19 for the Truth in Lending Act.

Question 2 - The Dodd 1 yr GFE and TIL combined implemented from what effective date?

Answer – The effective date is 1 year after transfer. That would be July 22, 2011. However, there is already a working copy going around, and I would expect it to be implemented well before this date.

Question 3 – I had a question related to the LO compensation that we discussed in webinar today. Changing LO compensation is a fairly easy regulation to comply with. It requires a change to the existing mind set, but logistically, it is not difficult. The requirement is to pay the LO based on total volume as a percentage or flat fee per until or some other method that doesn’t result in steering the borrower to an undesirable product.

Ok, so I’m with the regulators so far. Then, here is where I get lost. The regulation also says that companies that broker loans are also subject to the regulations. Ok, so now a brokerage firm or even a lender when acting as a broker also can not be paid differently for different pricing tiers or loan programs? So, effectively investors have to stop by brokerage firms how they are currently paying them. It is not simply paying the loan officer appropriately, but you also have to change the way you pay the firm. The interesting part is that secondary market transactions are exempt, so investors can still pay lenders but not brokers in spread premiums that change with loan program. So, it appears that the regulation much like RESPA is trying to put brokers at a competitive disadvantage. Am I understanding this correctly?

Answer – Yes, according to the rule, an originator is a loan originator and a broker company. Therefore, a broker company cannot be compensated based on the terms of the loan.

…Read the rest of the questions and answers on our website.

HUD/FHA Update

ML 2010-35: Borrower Certification for FHA Refinance of Borrowers in Negative Equity Positions

- Announces that mortgagees must obtain signed certification form from borrower if underwater borrower is refinancing. View the entire letter

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ML 2010-36: Requirements for Combined Loan Amounts

- Eliminates requirements that sum of all liens not exceed geographical max mortgage limit for both purchase and refinance transactions. View the entire letter

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

*To view an announcement, visit https://www.efanniemae.com/sf/guides/index.jsp.
Click “2010” on the right, under “Announcements and Lender Letters.” You will then have access to all 2010 announcements.

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SEL-2010-14: Appraiser Independence Requirements

- Announces Appraiser Independence Requirements, which replace HVCC. Effective immediately. Announcement on eFannieMae.com

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SVC-2010-16: Miscellaneous Servicing Policy Changes

- Announces misc. servicing policy changes, including:

Retirement of Payment Reduction Plan

Clarification of mandatory pre-filing mediation policy for mortgage loans in Florida

Waiver of escrow deposit accounts

Flood insurance requirements

Submissions of underwriting and servicing review files

LL-2010-12: Making Home Affordable: Interactions with Hardest-Hit Fund Unemployment and Reinstatement Programs

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- Provides guidance to servicers for interactions with Hardest Hit Fund Unemployment and Reinstatement Programs. Announcement on eFannieMae.com

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To view all Fannie Mae Announcements and Letters for the year, visit

Bulletin 2010-23: Selling and Servicing

Freddie Mac Update

*To view an announcement, visit http://www.freddiemac.com/sell/guide/. The bulletins and industry letters are on the right.

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- Announces Appraiser Independence Requirements, which replace HVCC

- Makes changes to requirements regarding:

Property eligibility

Credit

Eligibility requirements for Freddie Mac counterparties

Operational

Mortgage insurance

Bulletin 2010-24: State Farm Florida Insurance Company

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- Announces that Freddie Mac will accept insurance from State Farm Florida Insurance Company… Bulletin on FreddieMac.com

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Bulletin 2010-25: Servicer Requirements for Hardest Hit Fund

- Provides guidance to servicers for interactions with Hardest Hit Fund Unemployment and Reinstatement Programs. Bulletin on FreddieMac.com

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Bulletin 2010-26: Foreclosure and Bankruptcy Referrals in Florida

- Announces that servicers may not refer any new Freddie Mac foreclosure or bankruptcy cases to Law Offices of David J. Stern, P.A. in Florida. Bulletin on FreddieMac.com

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

Circular 26-10-13: The Veterans Benefits Act of 2010

- Announces enactment of Veterans’ Benefits Act of 2010

Changes to funding fee exemption status

Creation of Specially Adapted Housing (SAH) assistive technology grant program

View the entire circular

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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216 or reply to this email.

1 Comment »

Sep
02
2010

MCA Monthly Compliance Update – September 2010

MCA Logo

MCA Monthly Update
September 2010

In This Issue

Federal Reserve’s Final Rules

Quick Links

https://www1.gotomeeting.com/register/292055536

Stay Updated

Connect with us:

Join our free monthly webinar “Revisiting the GFE: How to Resolve Common Findings.”

We have posted the slides from last month’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.

An in depth review of the GFE and how to prevent common errors.

Join our webinar on Thursday, September 23 at 12:00 p.m. MDT.

Reserve your webinar seat now at:

We continue to see GFE mistakes as one of the top findings in the quality control audits we perform. As a result of these continued findings, we felt further training on the GFE would be helpful. We will conduct an in-depth review of correctly completing the GFE. In addition, we will review the most common GFE mistakes we find and discuss how to proactively prevent these mistakes from occurring.

We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on Twitter and Facebook.

Federal Reserve’s Final Rules on Compensation and Steering

Federal Reserve’s Final Rules

The Federal Reserve published final rules to protect mortgage borrowers from various unfair practices that can arise from originator compensation practices. The rules go into effect April 1, 2011. Some of these changes include:

- Prohibiting payments to the loan originator that are based on the loan’s interest rate or other terms.

- Prohibiting a mortgage broker or loan officer from receiving payments directly from a consumer while also receiving compensation from the creditor or another person…

You can read the Federal Reserve’s press release here, which includes attachments to the highlights and the actual final rule.

Webinar Questions and Answers

QC Plan Webinar Questions and Answers

We want to thank everyone who attended our webinar: “Understanding How the LQI Affects You.” As promised, we have posted the slides and answers to the questions asked.

Download the slides

We have included the first three questions below. *Please visit our website to read all the questions and answers.

Question 1 – We are a lender who funds our own loans and sells them to investors after closing. Should the Pre funding audit take place PRIOR to closing and us funding the loan at the closing table or should that take place after closing prior to shipping to an investor?

Answer – The pre-funding audit can really occur at any time in the process. However, pre-funding is the best time, as you will have all the signed final documents to review. If you were to review the file prior to closing, you would be missing critical documents to review. While there are no rules against pre-closing audits, we do not recommend it.

Question 2 - Are SSA-89 the SSN validation required by FNMA or only if there are inconsistencies and flags?

Answer – I was incorrect in my statement regarding Fannie Mae’s requirement about SSN verification. You only need to verify with the SSA if the borrowers SSN is not validated by DU. Please reference Fannie Mae Announcement SEL-2010-01. https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1001.pdf.

Question 3 – We utilize a Mortgage Lock in Agreement as our intent to proceed. Does this seem sufficient to you, or do you recommend some other means of intent?

Answer – HUD/RESPA does not give specific guidance on how to comply with this rule. However, MCA recommends a separate specific disclosure to make sure there are no questions regarding your borrower’s intentions.

…Read the rest of the questions and answers on our website.

HUD/FHA Update

ML 2010-23: FHA Refinance of Borrowers in Negative Equity Positions

- Provides guidance regarding enhancements to FHA’s refinance program for underwater borrowers. View the entire letter

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ML 2010-24: Combined Loan-to-Value Requirements for Refinance Transactions

- Eliminates unlimited CLTV ratio and returns FHA to its former CLTV limit for case numbers assigned on or after September 7, 2010. View the entire letter

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ML 2010-25: Processing Instructions for Refinancing Cooperative Housing Projects under Section 207 pursuant to Section 223(f)

- Provides processing instructions and guidance to issue Mortgage Insurance for refinancing Cooperative Housing Projects under Section 207 pursuant to Section 223 (f) of the National Housing Act. View the entire letter

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ML 2010-26: Further Policy Guidance to Defer Submission of Final Architectural Plans and Specifications Introduced by Mortgagee Letter 2008-19…

- For Multifamily Mortgagees: Provides guidance on ML 08-19 regarding deferring submission of final architectural plans… View the entire letter

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ML 2010-27: Renewal of Special Authority for Eligibility of Projects for Mortgage Insurance where Construction has Started…

- For Multifamily Mortgagees: Renews policy for eligibility of projects where construction has started. View the entire letter

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ML 2010-28: Changes to FHA Mortgage Insurance Premiums

- Raises annual FHA premium and lowers upfront premium, except for HECMs. Effective for case numbers assigned on or after October 4, 2010. View the entire letter

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ML 2010-29: Minimum Credit Scores and Loan-to-Value Ratios

- Introduces new minimum credit scores and LTV ratio requirements for FHA loans. Effective for case numbers assigned on or after October 4, 2010. View the entire letter

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

Fannie Mae Update

SEL-2010-10: Selling Guide Updates

- Updates the Selling Guide regarding the following topics:

Mortgage loans secured by properties subject to unexpired redemption periods

Delivery of repurchased loans

General warranty of project eligibility

Seasoned mortgage loan requirements

Co-op share loan documentation

Termination of inactive document custodians

Title Insurance ALTA Endorsement 21-06

Miscellaneous Selling Guide updates

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SEL-2010-11: Undisclosed Liabilities and Re-underwriting Requirements

- Updates requirements for undisclosed liabilities and re-underwriting.

Also clarifies that lender is not required to obtain a new credit report to verify additional debt.

SVC-2010-11: Unique Hardships

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- Identifies “Unique Hardships” that warrant use of relief provisions for borrowers impacted by unusual circumstances that create financial hardship. View the entire announcement

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SEL-2010-12: Options for Borrowers with a PACE Loan

- Announces new requirements for lenders regarding borrowers who obtained Property Assessed Clean Energy (PACE) loans before July 6, 2010. View the entire announcement

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SVC-2010-12: Foreclosure Time Frames and Compensatory Fees for Breach of Servicing Obligations

- Revises foreclosure time frames for FL, MD, NV, and NY. Fannie Mae also reserves right to impose compensatory fees for breach of servicing obligations. View the entire announcement

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SVC-2010-13: Mandatory Pre-filing Mediation Policy for Mortgage Loans in Florida

- Announces that servicers must assign delinquent Florida mortgages to a FNMA attorney for mediation before initiating foreclosure proceedings. View the entire announcement

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To view all Fannie Mae Announcements and Letters for the year, visit

Summary of Fannie Mae Loan Quality Initiative

Freddie Mac Update

Bulletin 2010-19: Selling

- Makes changes to selling requirements, including providing guidance on 2010 median income changes, revising underwriting requirements regarding inquiries on borrower’s credit report, etc. View the entire bulletin

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Bulletin 2010-20: Mortgages Secured by Properties with an Outstanding Property Assessed Clean Energy (PACE) Obligation

- Provides guidance regarding Freddie Mac’s purchase of mortgages with a Property Assessed Clean Energy (PACE) obligation. View the entire bulletin

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

Circular 26-10-9, Change 1: Itemization of Credits and Title Service Charges

- Clarifies that breakout of charges should be attached to HUD-1, not on HUD-1 itself. View the entire change

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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216.

No Comments »

Jun
10
2010

MCA Monthly Compliance Update – June 2010

MCA Logo

MCA Monthly Update
June 2010

In This Issue

MCA and Our Community

Webinar Q & A

Red Flags Rule Extended

Quick Links

https://www1.gotomeeting.com/register/690882728

Stay Updated

Connect with us:

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, our newsletters contain compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

Join our free monthly webinar “Common Compliance Findings and How to Prevent Them.”

We have posted the slides from May’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.

Improve your quality control processes and prevent common findings.

Join our webinar on Thursday, June 24 at 12:00 pm MDT.

Reserve your webinar seat now at:

Join us for our free June webinar where we will provide invaluable information on how to limit your exposure to risk and improve your quality control processes: We will share common trends that we see in our quality control audits and how you can prevent them. We will also share helpful tips on how you can meet the ever-increasing quality control demands made by investors.

We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on Twitter and Facebook.

FTC’s Red Flags Rule Deadline Extended to December 31, 2010

MCA and Our Community

Mothers for Haiti

On May 15th, MCA participated in the Mothers for Haiti fundraiser in Riverton, Utah. Mothers for Haiti is a charitable foundation, started by a small group of nurses and other volunteers, who have been to Haiti since the January 2010 earthquake. Their goal is to raise funds and gather much-needed food and supplies for the children of the Foyer De Sion Orphanage.

If you would like to learn more about how to help, click here to contact Mothers for Haiti.

Webinar Questions and Answers

“Red Flags of Fraud” Webinar

We want to thank everyone who attended our webinar: “Red Flags of Fraud.” As promised, we have posted the slides and answers to the questions asked.

Download the slides

We have included the first two questions below. *Please visit our website to read all the questions and answers.

Question 1 – What steps would you take if the signatures did not match?

Answer – We first suggest contacting your borrower and discussing the discrepancy with them. If you feel the situation warrants special consideration, such as a deliberate case of misrepresentation, you can contact any of the suggested sites we made available during the presentation (local HUD office, Fannie Mae or the FTC). You should retain in your file the steps you took in detecting and addressing the discrepancy.

Question 2 – Does the geographic concentration change when you look at fraud for profit vs. fraud for housing?

Answer – The geographic concentration can definitely change. We provided the following two sources which demonstrated significant concentrations of fraud in specific geographic location: https://www.efanniemae.com/utility/legal/pdf/fraudstats/fraudupdate0410.pdf and www.fbi.gov/hq/mortgage_fraud.htm. Another excellent source for information on mortgage loan fraud is through the Financial Crimes Enforcement Network, www.fincen.gov…

…Read the rest of the questions and answers on our website.

Red Flags Rule Extended

With the FTC’s further extension of the Red Flags Rule deadline, Mortgage Compliance Advisors encourages mortgage brokers and lenders not to put off implementing their Red Flag Policy.

May 28, 2010 – This morning, the Federal Trade Commission announced a further extension of the enforcement date for the Red Flags Rule. The previous enforcement deadline, June 1, 2010, has now been extended to December 31, 2010. The FTC states that the reason for the extension is to allow congress time to “consider legislation that would affect the scope of entities covered by the Rule…

…Read the rest of our press release about the extension.

Summary of Fannie Mae Loan Quality Initiative (LQI)

Fannie Mae recently published its Loan Quality Initiative (LQI), impacting several requirements. MCA has created a brief summary of Fannie Mae’s LQI, including effective dates. We hope you find the information informative and useful.

If you aren’t sure whether your current Quality Control Plan meets Fannie Mae’s new requirements, MCA can help. Call 877-250-5243 or email info@mortgagecomplianceadvisors.com for more information.

You can also find more detailed information about Fannie Mae’s LQI at www.efanniemae.com/sf/lqi/index.jsp.

Summary of Fannie Mae Loan Quality Initiative (LQI)

Borrower Identity Verification

Lenders will be required to confirm the identity of each borrower prior to the extension of credit.

Effective: June 1, 2010

SSN and ITIN Verification

All borrowers must have a valid SSN or ITIN. Lenders must validate the SSN with the Social Security Administration… Read our entire Summary of Fannie Mae LQI.

HUD/FHA Update

ML 10-18: Update of Property and Preservation (P&P) Requirements and Cost Reimbursement Procedures

- Updates consolidated property and preservation (P&P) guidance for foreclosed properties that had FHA mortgages. Effective July 13, 2010. View the entire letter

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ML 10-19: Streamline Refinance Transactions and FHA TOTAL Scorecard

- Announces that lenders may score streamline refis through TOTAL, and process and underwrite as streamline refis. View the entire letter

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

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*We offer FHA, VA, and HECM reference manuals with regulations and policies updated quarterly. For more information, visit our website or call 877-226-3216.

Fannie Mae Update

Notice, dated 5/24/10: 2010 Servicing Guide Part VIII — Updated Reference to Foreclosure Time Frames

- Modifies reference to foreclosure time frames in previous announcement. View the entire notice

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SEL-2010-07: Selling Guide Updates

- Updates the Selling Guide’s following topics:

Mortgage insurance clarifications

Community Seconds loan eligibility

Title exceptions and defects

Miscellaneous updates and clarifications

SVC-2010-07: Introduction of Fannie Mae’s Home Affordable Foreclosure Alternatives Program

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- Introduces Home Affordable Foreclosure Alternatives Program, which simplifies use of short sales and DIL options. Policies must be implemented by August 1, 2010. View the entire announcement

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LL-2010-07: Extension to Fannie Mae’s Alternative Modification to the Home Affordable Modification Program

- Extends eligibility timeline in LL-2010-04 and clarifies certain requirements for participation in Alt Mod program. View the entire announcement

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To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae’s website.

Freddie Mac Update

Bulletin 2010-11: Freddie Mac HAMP Backup Modification

- Announces changes for:

HAMP Backup Modification

Cap-to-Reinstate modification

HAMP requirements to permit use of a Servicer’s proprietary form to collect borrower’s financial information…

Underwriting & Processing Tips

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Bulletin 2010-12: Home Affordable Foreclosure Alternatives

- Announces Freddie Mac’s requirements for the Treasury’s Home Affordable Foreclosure Alternatives (HAFA) initiative. Effective August 1, 2010. View the entire bulletin

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update

Circular 26-09-19 – Change 1: Rescission of VA Acceptance of HUD/FHA Condominium Approvals

- VA can accept HUD/FHA/USDA condo approvals if project approval was dated prior to December 7, 2009, but not after… View the entire change

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Circular 26-10-6: Revised VA Making Home Affordable Program

- Provides authority and revised instructions for modifying VA loans in accordance with Making Home Affordable program. Effective immediately. View the entire circular

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Circular 26-10-7: Forbearance For Homeowners With Problem Drywall

- Requests that servicers extend forbearance for at least 6 months for homeowners with problem drywall. View the entire circular

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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216.

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Mar
04
2010

MCA Monthly Update – March 2010

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MCA Monthly Update
March 2010

In This Issue

Quick Links

https://www1.gotomeeting.com/register/689424280

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Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, our newsletters contain underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

MCA now offers compliance services to help you verify income, compliance, and identity.

4506-T Income Verification – Order your 1, 2, 3, or 4 year tax transcripts through MCA, and you will receive them in 1-2 business days.

Focus Reviews – Get quick pre- or post-closing compliance checks, which include our professionals’ advice on how to correct any issues.

Identity Verification – Comply with Fannie Mae’s new announcement SEL-2010-01 and the Patriot Act, which reqiure financial institutions to verify the identity of borrowers.

Join our free monthly webinar “Continuing to make sense of the new GFE: A more in depth look.”

We want to thank those who attended our first webinar: Making Sense of the New GFE. We have posted the slides from February’s webinar on our website. March’s webinar will be a more in depth look at the new Good Faith Estimate.

Get more detail about fee disclosure and changed circumstance as they relate to the GFE.

Join our webinar on Thursday, March 18 at 12:00 pm MST.

Reserve your webinar seat now at:

After last month’s webinar that gave a basic overview of the 2010 Good Faith Estimate, we received requests for a more interactive and in-depth training. This month’s webinar will consist of a brief, yet comprehensive, presentation on fee disclosure and changed circumstance as they relate to the Good Faith Estimate, followed by a panel discussion featuring several experienced mortgage professionals.

We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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If you have any questions, simply reply to this email or call us at 877-226-3216.

For real time compliance news, you can now follow us on Twitter and Facebook.

…Read the rest of the questions and answers on our website.

Underwriting & Processing Tips

Answers to your GFE questions

We received many excellent and challenging questions during our webinar “Making Sense of the New GFE,” hosted in the month of February. As promised, we have posted the slides from the webinar on our website, as well as answers to all 33 questions we received about the new GFE. We have included the first four questions below.

*Please visit our website to read all 33 questions and answers.

Question 1 - We understand two circumstances in which the compensation to the originator can change: the loan amount changes and a portion of the origination charges are dependent on the loan amount; the loan program changes. If a loan is floating and is later locked, we understand that the credit or charge to the borrower may change, but “Our Origination Charges” may not change and the originator’s comp (even if the YSP or rebate changes) will not change. Correct?

Answer: According to our interpretation of the resources we have utilized, that is correct. HUD FAQ’s #19, page 8, states the following- If a borrower locks the interest rate after the GFE has been issued, a revised GFE must be issued within 3 days of the interest rate lock reflecting the date that the rate lock is good through. Any interest rate-dependent charges (specifically Block 2, Line A and Block 10 on the GFE) and terms that changed must also be updated on the revised GFE.

Question 2 – We have seen several large lenders consider a change in pricing to be a changed circumstance that permits redisclosure and a change to Our Origination Charges and the broker’s comp. Is this permitted? If so, what is the rationale under the rule?

Answer: This is not permitted once a rate has been locked. HUD FAQ’s 1/28/10 states market fluctuations do not constitute a changed circumstance and a GFE may not be revised to reflect market fluctuations.

Question 3 – If I change the loan amount, does a new 1003, TIL and GFE need to be signed?

Answer: These documents will need to be re-disclosed to the borrower within 3 days and evidence of re-disclosure or re-issue will need to be maintained in the file.

Question 4 – If the Buyer is paying a 1% commission of the contract amount to the seller (in this case a bank). The transaction is a short sale. Should this be disclosed as a closing cost on the GFE for the buyer?

Answer: No.This charge is considered real estate commission and will not need to be disclosed on the GFE. [...Q&A continued on our website.]

FHA Update

ML 10-06: Extension of Mortgagee Letter 2009-22 Revised Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223(f)

- Extends deadline to February 17, 2011 for temporary authority from ML 2009-22 (Revised Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223(f) Apartments).

View the entire letter

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To view all HUD Mortgagee Letters for the year, visit HUD’s website.

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*We offer FHA, VA, and HECM reference manuals with regulations and policies updated quarterly. For more information, visit our website or call 877-226-3216.

Fannie Mae Update

LL-2010-02: New Fannie Mae-Approved Mortgage Insurers

- Announces four new mortgage insurers. View the entire letter

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LL-2010-03: An Introduction to Fannie Mae’s Loan Quality Initiative

- Introduces Loan Quality Initiative (LQI), which makes several changes to be announced over the next few months. LQI focuses on several areas, including:

Policies that confirm the identity and occupancy of the borrower, validation of qualified parties to the transaction, and policies that address the borrower’s credit profile

Updated quality control requirements

Delivery of additional information about property and appraisal

Loan delivery enhancements

Reporting and validation of mortgage insurance coverage data

View the entire letter

Loan Quality Initiative Resources (FAQs, summary with key dates, live web seminars, etc.)

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SEL-2010-01: Selling Guide Updates for the Loan Quality Initiative

- Describes some changes impacting Selling Guide as result of Loan Quality Initiative (LQI).

- “The change to the Potential Red Flag messages will be effective the weekend of April 17, 2010.”

- Policies effective June 1, 2010:

“Lenders will be required to confirm the identity of each borrower whose credit is used for the purpose of determining ability to meet Fannie Mae’s underwriting and eligibility standards prior to the extension of credit.”

All borrowers are required to have a Social Security number or ITIN.

Lenders must confirm that companies involved in origination, underwriting, or servicing are not on GSA Excluded Party List or HUD LDP List prior to delivery of loan.

“Lenders [must] determine that all debts of the borrower incurred or closed up to and concurrent with the closing of the subject mortgage are disclosed on the final loan application and included in the qualification for the subject mortgage loan.”

“If the subject property is a condo or other property type that is identified by a unit number, the unit number must be included in the property address on the note.”

- Effective January 3, 2011, “LTV ratio calculation [must] be truncated (shortened) to two decimal places, then rounded up to the next whole percent.” View the entire announcement

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SEL-2010-02: Selling Guide Updates

- Announces that the Selling Guide has been updated to incorporate several miscellaneous clarifications or omissions. View the entire announcement

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Notice dated 3/2/10: Extension of the Home Affordable Refinance Program

- FHFA extends Home Affordable Refinance Program (HARP) to June 30, 2011.

- “Accordingly, lenders may continue to apply the HARP flexibilities to loans originated under Refi Plus™ and DU Refi Plus™ provided the note date is on or before June 30, 2011 and the loans are delivered to Fannie Mae no later than October 31, 2011.”

View the entire notice

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SVC-2010-04: Reclassified MBS Mortgage Loans

- Describes the following:

Reclassifying HAMP Program MBS Mortgage Loans

Expedited Reimbursements of Servicer Advances for Reclassified MBS Mortgage Loans

Executing Modification Agreements

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To view all Fannie Mae Announcements and Letters for the year, visit

Freddie Mac Update

Bulletin 2010-3: Home Affordable Modification Program

- Provides guidance on HAMP, including requirement for full verification of borrower eligibility after servicer receives “Initial Package.” View the entire bulletin

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Bulletin 2010-4: Multiple Subjects

Requires Sellers to take out separate fixed-rate Cash contracts for Relief Refis with specified higher LTVs (effective February 22, 2010)

Corrects deadline for submission of Guide Form 996E

Provides guidance on Form 16SF

Bulletin 2010-5: Selling and Servicing

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- Announces enhancing Loan Prospector to provide a point value estimate from HVE for a property address. Also announces changes to Guide related to this enhancement:

Sellers must have copy of entire Note in file

Sellers may not delegate endorsement of Notes via power of attorney

Guide reflects a few updates for various states (IL, NH, RI, CA, GA, NC)

Bulletin 2010-6: Freddie Mac Relief Refinance Mortgage Offering Extended

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- Extends offering of Relief Refinance Mortgages–must have Note Dates on or before June 30, 2011.