TIP OF THE DAY-GOVERNMENT SHUTDOWN

TIP OF THE DAY- GOVERNMENT SHUTDOWN- FANNIE AND FREDDIE’S STANCE

 

There is also more flexibility regarding the verbal verification of employment and paystub age requirements. These temporary requirements will apply to all borrowers impacted by the shutdown and will automatically expire once the government is fully funded and resumes operations.

New reserve requirements

Fannie Mae announced that for loans other than high loan to value refinances that have application dates on or after Jan. 16, 2019, the borrower must have the greater of:

  • Two months of documented reserves, or

  • For loan casefiles underwritten through Desktop Underwriter, the amount of reserves required by DU (with overlays as required by the Selling Guide for certain transactions); or

  • For manually underwritten loans, the amount of reserves required for the transaction per the Eligibility Matrix and Selling Guide.

Verification of Employment

Due to the shutdown and the difficulties in obtaining a VOE, the GSEs will now accept loans from lenders without verbal VEO under the certain circumstances if the lender files a written statement describing the steps the lender took to obtain the verbal VOE and that the requirement could not be met as a direct result of the shutdown.

But Fannie Mae pointed out that many VOEs are still easily available through automated systems and third-party service providers.

The GSEs are also waiving the requirement that the paystub be dated no earlier than 30 days prior to the initial loan application date. Lenders must obtain the most current paystub that reflects year-to-date earnings and may need to obtain the final 2018 year-to-date paystub to accurately calculate income. All other paystub requirements remain unchanged.

justin brown