On January 16, Freddie Mac and Fannie Mae, in consultation with the FHFA, issued additional temporary guidance on selling policies that may be impacted during the government shutdown.
Freddie Mac Bulletin 2019-3 provides revisions to temporary guidance previously announced in Bulletin 2019-1 (see previous InfoBytes coverage here), and notifies sellers of temporary changes to certain Guide requirements to further assist impacted borrowers. Due to the length of the shutdown, Freddie Mac has added a minimum reserves requirement in order to offset the risk associated with a borrower’s interruption of income. Sellers must document the greater of two months reserves or the minimum reserves as required by the Loan Product Advisory and the Guide, for impacted mortgages with application received dates of January 16, 2019 or after. In addition, Freddie Mac will allow flexibility in circumstances where a seller is unable to meet the 10-day pre-closing verification of income and employment requirements for impacted mortgages regardless of the application received date. Freddie Mac also directs sellers of government funded, guaranteed, or insured mortgages sold to Freddie Mac to review government agency requirements.
Fannie Mae Lender Letter LL-2019-2 also provides additional temporary guidance on selling policies that may be impacted during the continued shutdown, and builds upon guidance issued last December. (See LL-2018-06 covered by InfoBytes here.) The additional guidance imposes a minimum liquid financial reserves requirement to offset risk and is applicable to loans with application dates on or after January 16, 2019. The new reserves requirement does not apply to high LTV refinances. Finally, Fannie Mae will provide additional flexibility with regard to verbal verification of employment and paystub age requirements.