Fannie Mae and Freddie Mac Issue Selling and Servicing Guide Updates

Fannie Mae and Freddie Mac recently issued updates to their selling and servicing guides.

Fannie Mae recently issued Selling Guide Announcement (SEL-2020-07), which highlights updates to the Selling Guide including the following, among others:

• The expansion of property eligibility criteria to allow for the sale of loans secured by single-width manufactured homes that meet specified eligibility requirements and for the eligibility of such properties for principal residence purchase and limited cash-out refinance transactions (effective February 1, 2021);
• Updates to requirements related to the use of retirement, government annuity, and pension income (lenders may take advantage of these policy changes immediately but must apply the changes to loans with application dates received on or after February 15, 2021);
• At the direction of FHFA and in collaboration with Freddie Mac, modifications to seller/servicer eligibility standards related to minimum liquidity which make the unused, undesignated, and available portions of credit lines ineligible for meeting minimum requirements for non-depository seller/servicers (non-depository seller/servicers must be compliant with the updated requirements based on financials reported as of March 31, 2021);
• Updated documentation requirements for the sale of personal assets; and
• A redesigned Uniform Residential Loan Application Form 1003 (the updated form may be used beginning January 1, 2021).

Fannie Mae also recently issued Servicing Guide Announcement (SVC-2020-08), which notes that the modified seller/servicer eligibility standards related to minimum liquidity, as updated in the Selling Guide, were also incorporated by reference in the Servicing Guide.

Freddie Mac issued Bulletin 2020-48, which announces updates to its Selling/Servicing Guide, including the following:

• Under the guidance of FHFA and in collaboration with Fannie Mae, an update to the definition of acceptable liquidity for non-depository seller/servicers that excludes unused committed advanced lines of credit as allowable liquidity assets (effective March 31, 2021);
• A revision from five days to 30 days to the time frame within which certain powers of attorney must be delivered to the document custodian (effective January 4, 2021); and
• Updates to the Document Custody Procedures Handbook to align with changes recently made to Freddie Mac’s purchase requirements.