Fannie Mae and Freddie Mac recently issued updates to their respective selling guides, including updates relating to remote notarizations.
Fannie Mae issued Selling Guide Announcement (SEL-2021-05), which included the following Selling Guide updates:
- Establishing broad notarization requirements, including requirements specific to remote-ink-signed notarization. These provisions take effect July 1, 2021, although lenders may follow the new requirements immediately.
- Clarifying the timing expectation for a clean loan file through final editing in the Loan Delivery application, providing that loans are subject to all fatal edits in Loan Delivery throughout the submission, loan documentation certification, and acquisition purchases process, and that any fatal edits must be resolved for Fannie to purchase the loan.
- Clarifying that loans with technical or typographical corrections are not considered to be modified loans, even though the Selling Guide uses the term “modification.”
Freddie Mac issued Bulletin 2021-20, which announced the following updates, among others, most of which are effective immediately:
- Revising Exclusionary List screening requirements, including streamlining the obligations to require a Seller to screen certain identified party roles against the Exclusionary List and simplifying the screening requirements for loss mitigation activities. The Bulletin also announced updates to the requirements for requesting a waiver of warranties regarding the Exclusionary List and reporting fraud and Suspicious Activity (all now to be submitted via email).
- Changing various Condominium and Cooperative Project requirements (including those addressing, e.g., projects in litigation or alternative dispute resolution (ADR) proceedings (effective for mortgages with settlement dates beginning on August 31, 2021), Condominium Unit Mortgages delivered as Exempt from Review, maximum single-investor concentration limits for Cooperative Projects, the sale of Cooperative Share Loans in Cooperative Projects that restrict the income eligibility level of subsequent purchasers, and requirements with respect to ownership and use of common elements and common areas (effective for mortgages with settlement dates beginning on August 31, 2021)).
- Updating various property eligibility and appraisal-related provisions, such as clarifying that the appraised value as of the appraisal report effective date is used to determine value, as opposed to the value on the Note Date.
- Revising requirements for the asset and income modeler (AIM) for self-employed borrowers, with respect to the age of federal tax return requirements, effective for mortgages with Loan Product Adviser initial submission dates beginning on August 1, 2021.
- Providing that remote ink notarization (RIN) processes are permitted where expressly permitted by law, and establishing certain minimum standards for the process and technology related to permissible RINs.
- Announcing that the Home Possible Income and Property Eligibility tool will be updated on June 16, 2021, to reflect the 2021 area median income limits.
- Updating the authorized changes for the Virginia Deed of Trust if the mortgage is an eligible refinance.