This Week's Highlights - Tuesday, October 13, 2020

  • FHA Issues Waiver for Interior Photos on Inspections in PDMDAs
  • Fannie Mae October Selling Guide Updates
  • Freddie Mac Selling Updates
  • Updated FEMA Area Declaration for Iowa
  • Reminder! 2019 Tax Returns Required
  • Knowledge Owl Training Opportunities
  • New Mercury Appraisal Ordering Platform
  • Change in Submission Policy - Removal of 1003 Requirement
  • On-Boarding Correspondent/Broker DRIVER Training
  • Property Inspections Waivers
  • SSA-89 Delayed
  • FEMA Disaster Area Declaration for FL
  • Helpful Tip: Correspondents Uploading Executed Closing Package
  • DRIVER Helpful Tips
  • Adverse Market Fee Reminder

Please Note: As a reminder, you must be logged into Knowledge Owl to access any links to KO referenced below.

FHA Issues Waiver for Interior Photos on Inspections in PDMDAs
HUD issued a waiver on 10/06/2020 that suspends the standard inspection requirement for “interior” photographs of property in designated Presidentially-Declared Major Disaster Areas (PDMDAs). 

This waiver for inspections in PDMDAs is now consistent with the temporary inspection guidance allowing for exterior-only or desktop-only inspections due to the COVID-19 National Emergency. 

Fannie Mae October Selling Guide Updates
Fannie Mae has announced and updated their Selling Guide for October effective on and after 10/07/2020, unless otherwise noted below.

  • Condo Project Standards - Effective for all loan applications on and after 12/07/2020
    • Red Flags have been published along with additional guidance added to:
      • Condo Ineligibility - Supplemental requirements, including projects that are transient in nature, offer hotel-type services, voluntary rental pooling, or sharing of revenue from short-term rentals and related activities
      • Projects subject to recreational leases are ineligible for sale to FNMA.
  • Cash-Out Refinance Transactions - Vesting Requirements
    • C/O requirements currently reflect: “the property must have been purchased (or acquired) by the borrower at least six months prior to the disbursement date of the new mortgage”, and it lists some exceptions. Clarification has been added to provide “at least one borrower” on the loan to address situations where there is more than one borrower.
  • Gifts of Equity
    • Permitted to fund all or part of the down payment and closing costs (including prepaid items) but may not be used towards financial reserves.

Refer to SEL-2020-06 for details.

Freddie Mac Selling Updates
Freddie Mac announced various updates effective on and after 10/07/2020, including loans currently in process, as follows:

  • HELOC Payments
    • In lieu of obtaining HELOC statements to document a monthly payment amount, a payment of 1.5% of the outstanding balance can be used in the DTI calculation.  This does not apply to HELOCs originated concurrently with 1st mortgage financing, which still requires full documentation of HELOC terms.
  • PUDs (HOA Insurance)
    • It is no longer required to verify insurance (master or blanket policy) for common elements in a PUD project.
  • Social Security / Non-Taxable Income
    • Clarification has been added regarding the previous announcement which allowed 15% of SS income to be grossed up without documentation. 
    • Example:
      • Borrower's Social Security income is $1,000/month
        • $150 can be grossed up (i.e., 15% of $1,000)
      • Using 25% as the income adjustment factor, the income is calculated as follows:
        • $150 x 25% = $37.50
        • $1,000 + $37.50 = $1,037.50
        • $1,037.50 can be used for qualifying without obtaining tax returns or other documentation
Refer to 2020-38 for details.

Updated FEMA Area Declaration for Iowa
The following area in Iowa has been updated as a disaster area due to Severe Storms. The disaster incident period declared 08/10/2020.
  • Clinton County

Note: These are FEMA declarations and will affect all programs; therefore, Fairway’s Disaster Area Appraisal and Re-Inspection requirements must be followed for both conventional and government loans. 

Reminder! 2019 Tax Returns Required
As a reminder, the 2019 Tax Return filing cut-off date is scheduled for this Thursday, October 15th. Effective Thursday, 2019 Tax Returns are required on all applicable loan files, including loans currently in process. 
Knowledge Owl Training Opportunities 10/20
As a reminder, Fairway Wholesale Lending is excited to be offering live Knowledge Owl Training opportunities scheduled for the 3rd Tuesday of the every month for our valued clients.

Knowledge Owl (KO) is the system in which Fairway's program guidelines are housed and are accessible by logging into DRIVER. 

The training will provide the ins & outs of KO's functionalities and assist you with various tips for accessing guidelines in a quick and efficient manner, as well as allow the opportunity for you to ask any questions you may have. 

Register below for this month's opportunity! You don't want to miss out!

Tuesday, October 20th @ 12:00 CST
New Mercury Appraisal Ordering Platform
Fairway Wholesale Lending has partnered with Mercury Network to offer a new and improved appraisal ordering platform inside of DRIVER. The new release will provide all of our clients a standardized appraisal ordering experience all in one place. In addition to the new platform, we are expanding our approved AMC list by adding 4 additional AMCs. Our next Broker training is scheduled for Monday, 10/19/2020 @ 1 CST. Register today!

For more information, refer to the Easy Appraisal Ordering QRG.
Change in Submission Policy – Removal of 1003 Requirement
In place of a physical LO signed 1003 required for every new loan submission, Fairway Wholesale Lending will be putting in place a broker attestation statement within DRIVER for the broker to acknowledge, confirming the accuracy of all loan data provided within the 1003 screens.  Fairway will proceed to disclose as applicable based upon the data entered into DRIVER from the Broker. 
On-Boarding Correspondent/Broker DRIVER Training
On-Boarding DRIVER training is now available for both new and existing correspondent and broker accounts. Various options are available depending on channel type as well as disclosing preference.

Register below for this week's training sessions:

DRIVER Training: Brokers Preparing Own Disclosures
Tuesday, October 13 @ 2:00pm CST

DRIVER Training: Correspondent Lenders
Wednesday, October 14 @ 2:00pm CST

DRIVER Training: Brokers w/ FWL Preparing Disclosures
Thursday, October 15 @ 2:00pm CST

DRIVER Training: Initial CD and Closing Requests for Brokers
Friday, October 16 @ 11:00am CST

DRIVER Training: Initial CD and Closing Requests for Correspondent Lenders
Friday, October 16 @ 2:00pm CST

Q: On a conventional file, are we able to use a Property Inspection Waiver (PIW) since the original appraisal is now expired?

A: Once an appraisal has been done on the property, a PIW cannot be utilized even if the appraisal is expired. 


Q: Processing for my SSA-89 has been delayed. Are there alternate forms of documentation that can be used to verify the borrower’s social security number?

A: You would need to speak to the underwriter on your file to see if you can use an alternate method of verification for the borrower’s social security number. 


FEMA Disaster Area Declaration for Florida
The following areas in Florida were added as disaster areas due to Hurricane Sally. The disaster incident period declared 09/14/2020 and is ongoing.

  • Bay, Escambia, Okaloosa, Santa Rosa, and Walton Counties

Please Note: These are FEMA declarations and will affect all programs; therefore, Fairway’s Disaster Area Appraisal and Re-Inspection requirements must be followed for both conventional and government loans. 

For a quick reference, refer to the newly created PDMDA Job Aid, which is a great go-to tool that will assist in determining what appraisal and re-inspection requirements are to be applied in certain disaster areas eligible for individual assistance for each agency.

Helpful Tip: Correspondents Uploading Executed Closing Package
FWL has created a helpful Quick Reference Guide for the Correspondent Channel that provides instructions on how to properly upload closing documents via DRIVER. 

Important Note: Upload executed closing packages through the Correspondent Purchase Screen within DRIVER.  DO NOT upload closing packages through the View/Upload Documents screen or the Conditions screen.  This will help to avoid unnecessary delays for loan purchase.

DRIVER Helpful Tips
Having issues printing documents from DRIVER? Please refer to the quick tutorial on printing from DRIVER.

Adverse Market Fee Reminder
As a reminder, Fairway is phasing in the application of the 50 bps adverse market fee as an LLPA for all FNMA and FHLMC refinances using the schedule below to comply with the new delivery date requirements:
  • 45-day locks beginning September 28, 2020
  • 30-day locks beginning October 12, 2020
  • 15-day locks beginning October 26, 2020 

Any loan that funds or is purchased after November 9th, 2020 will be subject to the 50 bps adverse market fee at the time of extension.  The adverse market fee does not apply to:

  • Loan Amounts <$125,000
  • Home Ready or Home Possible Mortgages

Steve Jacobson, CEO - "In order to grow, we need to be patient with ourselves first."