InfoBytes Blog
Fannie Mae Announces Numerous Selling Policy Changes
On September 24, Fannie Mae issued Selling Guide Announcement SEL-2013-07, which includes changes to various selling policies. The announcement states that the flood insurance coverage requirements have been updated to clarify existing policy, address common lender questions and align with prevalent industry practices, as well as to alter the requirements for flood insurance on attached condominium projects (requiring a master policy in effect at least equal to 80% of replacement cost or the maximum insurance available from the National Flood Insurance Program per unit, whichever is lower). Fannie Mae updated its maintenance fee (formerly known as inactivity fee) requirements, including, among other things, lowering the loan delivery threshold from $2 million in mortgage loans to one mortgage loan. The announcement also (i) revises the instructions for Form 360 (“Certificate of Authority, Incumbency, and Specimen Signatures”) to clarify that the form must be completed and signed by an officer of the lender or, if the lender is not a corporation, a member of senior management, (ii) enhances guidance on the allowable age of federal income tax returns and the tax-related documentation required by adding disbursement dates, and (iii) revises the temporary leave income policy to clearly state that documentation concerning the timing of the borrower’s return to work can be provided directly to the lender by the borrower or the employer. The announcement also includes several other selling policy changes, and describes selling guide updates based on previously announced policy changes related to ability to repay and qualified mortgages.