Fannie Mae has issued a slew of updates, clarifications, and extensions affecting its Selling Guide. Announcement SEL-2015-06 includes the following changes. The most notable change concerns the way paid-off revolving debt is treated.
Payoff of Revolving Debt at or Prior to Closing:
Effective immediately, if the balance of a revolving debt has been paid down to zero before settlement the Selling Guide no long requires that the account be closed. The account may remain open even as the DTI ratio is adjusted to reflect the change in monthly payment. Lenders may ignore the automatic reminder from Desktop Underwriter (DU) regarding an open account until that feature is removed in a DU release later in 2015.
Extension of DU Refi PlusTM and Refi PlusTM
As announced in the May 12, 2015 Selling Notice, DU Refi Plus and Refi Plus have been extended until December 2016. The Selling Guide has been updated to reflect the new application and delivery dates.
Manufactured Housing Affidavit of Affixture
The Selling Guide will no longer suggest lenders seek assistance from Fannie Mae's regional offices in preparing this form but rather that the appropriate state or local agency be consulted. The update also clarifies who must sign the affidavit.
Loan Repurchases and Make Whole Payments Requested by Fannie Mae.
This is a technical change to correct an omission from a 2010 revision to Section A2-3.2-01 of the Selling Guide. The sentence appears under "Redelivery of Repurchased Loans" and notes that a mortgage loan repurchased from another investor or GSE that was delivered in error to that investor or GSE is eligible for delivery to Fannie Mae, as long as it meets all relevant eligibility requirements.
Verification of Deposits and Assets
This is to clarify that bank statements used to verify assets must cover two full months of banking activity rather than just one monthly statement that includes the prior months balance as has been a common misinterpretation.
A statement has been added to the Guide to recognize that sometimes lenders may apply a more conservative approach when qualifying borrowers. This is acceptable as long as Fannie Mae's minimum requirements are met, and lenders consistently apply the same approach to similar loans.
Other clarifications included in the current announcement include:
- Clarification of CLTV and HCLTV Ratio Requirements for Project Reviews on Florida Condos
- Revised Kentucky Security Instrument
- Updated List of Approved Mortgage Insurance Forms
- Updated List of Special Feature Codes dealing with flood insurance
- A blanket change of all references to "eCommitting" and "eCommitONE" in the Selling Guide with "Fannie Mae's whole loan committing application" or the "whole loan committing application."
- A blanket change of all references to "National Underwriting Center" with "Loan Quality Center."