This Week's Highlights - Tuesday, October 20, 2020

  • Newly Announced Disaster Areas for LA and CA
  • PDMDA Job Aid - Quick Reference Guide
  • USDA Fiscal Year 2021 SFH Guaranteed Funds Available
  • New Mercury Appraisal Ordering Platform
  • On-Boarding Correspondent/Broker DRIVER Training
  • Conventional Refinance with Second Mortgage
  • HomeReady Financed Properties
  • 2019 Tax Returns Required
  • 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
  • Change in Submission Policy - Removal of 1003 Requirement
  • Adverse Market Fee Reminder

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

Newly Announced Disaster Areas for LA and CA
Louisana - Hurricane Delta
The following areas in Louisiana have been added as a disaster areas due to Hurricane Delta. The disaster incident period declared 10/06/2020 – 10/10/2020.

  • Acadia, Calcasieu, Cameron, Jefferson Davis, and Vermilion Parishes

Important Note: Please pay close attention to both disaster re-inspection dates and disaster incident period dates for Louisiana since all affected counties for this disaster were also affected by the previous disaster declaration for Hurricane Sally.

California - New Wildfires
The following areas in California have been added as disaster areas due to new wildfires. The disaster incident period declared 09/04/2020 and it’s ongoing. 

  • Fresno, Los Angeles, Madera, Mendocino, San Bernardino, San Diego, and Siskiyou Counties

California - Ongoing Wildfires
The following area in California has been updated as a disaster area due to wildfires. The disaster incident period declared 08/14/2020.

  • Trinity, Lassen and Tulare Counties

All of the above are FEMA declarations and will affect all loan programs. Effective immediately, FWL is implementing Fairway’s Disaster Area Appraisal and Re-Inspection requirements.

PDMDA Job Aid - Quick Reference Guide
As a reminder, FWL created the 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.

USDA Fiscal Year 2021 SFH Guaranteed Funds Now Available
USDA has announced that the Fiscal Year 2021 funds for Guaranteed loans are now available.

Files in Process: Loan guarantee request that received a conditional commitment contingent upon the availability of an appropriation, will be obligated in the Agency's financial system over the next 3-4 days.  An updated "conditional commitment" will be electronically generated by the Agency to remove the "contingent upon" language.

Refer to USDA Announcement for details.

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. 
Please Note: FWL processes have not changed and clients must still upload the appraisal conditions in DRIVER following the current processes. It is the responsibility of the client to review the appraisal and if any value change occurs that would require a COC, the request must be completed within three (3) days of receiving the appraisal to avoid a cure.

For more information, refer to the Easy Appraisal Ordering QRG.
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 20 @ 2:00pm CST

DRIVER Training: Correspondent Lenders
Wednesday, October 21 @ 2:00pm CST

DRIVER Training: Brokers w/ FWL Preparing Disclosures
Thursday, October 22 @ 2:00pm CST

DRIVER Training: Initial CD and Closing Requests for Brokers
Friday, October 23 @ 11:00am CST

DRIVER Training: Initial CD and Closing Requests for Correspondent Lenders
Friday, October 23 @ 2:00pm CST

Q: On a conventional refinance, we are paying off the primary note as well as a home equity loan. Is this considered to be a cash out or a rate and term refinance?

A: For Conventional loans, Rate and Term/Limited Cash Out Refinances can include the payoff of a home equity loan as long as the borrower documents that the HELOC was used to purchase the subject property.  If the borrower has paid down and taken a draw on the HELOC after the purchase, then Fannie and Freddie would both consider this a cash out transaction.


Q: May borrowers have an ownership interest in other residential property at the time of loan closing on a HomeReady Loan?

A: Yes. Fannie Mae allows Occupant Borrower(s) to a maximum of two (2) financed properties, including the subject property.

Financed properties owned by a non-occupant co-borrower that are owned separately from the borrower are excluded from the number of financed properties calculation.  DU will determine the number of financed properties for the loan casefile using the same process outlined in standard Multiple Financed property topic. However, for HomeReady loan casefiles, only those properties for which the occupying Borrower(s) are personally obligated will be included).


2019 Tax Returns Required
As a reminder, last week (October 15th) was the IRS deadline for 2019 Tax Returns to be filed. All loans now must include the 2019 Tax Returns in all applicable loan files, including loans in process.

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
  • Cash-Out Refinance Transactions - Vesting Requirements
  • Gifts of Equity

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
  • PUDs (HOA Insurance)
  • Social Security / Non-Taxable Income
Refer to 2020-38 for details.

Updated FEMA Area Declaration for Iowa
The following area in Iowa was updated as a disaster area due to Severe Storms. Please note, as this is a FEMA declaration it will affect all programs.
  • Clinton County

Note: The disaster incident period declared 08/10/2020. Fairway’s Disaster Area Appraisal and Re-Inspection requirements were implemented immediately.

Change in Submission Policy – Removal of 1003 Requirement
As a reminder, in place of a physical LO signed 1003 required for every new loan submission, Fairway 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.
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 - "Take our eyes off ourselves and life automatically becomes lighter."