This Week's Highlights - Tuesday, November 3, 2020

  • Important Adverse Market Fee Reminder
  • Fairway Permitting Disaster Inspection Waivers in Certain CA Zip Codes
  • USDA and FHA Extends Temporary COVID Exceptions
  • On-Boarding Correspondent/Broker DRIVER Training
  • VA SFR With Manufactured Home
  • Non-Borrower on Title
  • Long Appraisal Turn-Times
  • FHA Updates New Construction Guidelines
  • Newly Updated Disaster Areas for CA
  • PDMDA Job Aid - Quick Reference Guide
  • Lump Sum Seller Credits on CD
  • Manufactured Housing Product Training

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

Important Adverse Market Fee Reminder

As a reminder, Fairway has been phasing the 50 bps adverse market fee as an LLPA for all FNMA and FHLMC refinances over the course of the past 45 days. 

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.

Fairway Permitting Disaster Inspection Waivers in Certain CA Zip Codes
Fairway Wholesale Lending has been monitoring the California wildfires closely, and will begin to lift some of the reinspection requirements as many of the wildfires have been 100% contained.

The following list of LA County zip codes must have a disaster inspection completed according to the Disaster Policy, or may be considered for an exception on a case-by-case basis depending on proximity to reported damage. Informal exception requests may be sent to the Ask Box for review and approval.  

90631, 91006, 91008, 91011, 91016, 91023, 91024, 91042, 91390, 91702, 91709, 91748, 91765, 92823, 93021, 93532, 93536, 93543, 93544, 93550, 93552, 93553 and 93563.

A disaster reinspection is no longer required in the balance of the zip codes in LA County; however, the appraiser must comment on the appraisal that the property was not negatively impacted by the wildfires.  FWL will release additional counties / zip codes as needed.

USDA and FHA Extends Temporary COVID Exceptions
USDA announced the extension of the temporary exceptions to appraisals and verbal verification of employment in relation to COVID-19 through 12/31/2020. 

FHA extended the policy for flexible alternatives for re-verifications of employment for cases closed on or prior to 10/31/2020 to cases closed on or prior to 12/31/2020. Additionally, the Desktop-Only appraisal option that was previously extended expired on 10/31/2020; however, the extension of Exterior-Only appraisals has been extended from 10/31/2020 to 12/31/2020.

Please refer to the USDA Bulletin and FHA ML for more details.

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, November 3 @ 2:00pm CST

DRIVER Training: Correspondent Lenders
Wednesday, November 4 @ 2:00pm CST

DRIVER Training: Brokers w/ FWL Preparing Disclosures
Thursday, November 5 @ 2:00pm CST

DRIVER Training: Initial CD and Closing Requests for Brokers
Friday, November 6 @ 11:00am CST

DRIVER Training: Initial CD and Closing Requests for Correspondent Lenders
Friday, November 6 @ 2:00pm CST

Q: Are VA loans allowed on a single family residence when there is also a manufactured home on the property?

A:  If the manufactured home is considered an accessory unit, then it would be allowed. It will come down to how the property is zoned and the appraiser must determine if the property is a single-family dwelling with an accessory unit. The highest and best use must be a legal use.


Q: I have a borrower who would like her boyfriend (who is not on the loan) to be added to title at closing. Is this permitted?

A:  A non-obligated individual can be listed on title without being on the Note. Please contact your assigned CRS for the requirements / restrictions for your state.


Q: Why are appraisal turn-times extended so far out?

A: FLS has provided the guidance below that may assist in answering your questions/concerns.

Volume vs. Supply

  • Freddie Mac recently published a slide that has shown through the UCDP Portal (Fannie/Freddie Conv. Loans) that showed there have been about 40,000 individual appraisers submitting loans every month from January 2012 through July 2020.  
  • In addition, many of these appraisers are also completing FHA and VA assignments.
  • An appraisal takes on average 6-8 hours to complete, meaning all 40,000 appraisers need to work 7 days a week to meet the current demand.

Long Term Solutions

  • Congress has legislation under consideration that would permit licensed appraisers to complete FHA transactions, which can help in rural situation where there are no proximate Certified Residential appraisers.
  • The Appraisal Foundation just approved a plan to allow for mentoring of appraisers through remote methods.  When developed this can help new trainees enter the appraisal profession.
  • The Appraisal Foundation has approved grants to foster outreach through primarily minority colleges to increase diversity and increase new entrants into the appraisal profession.
  • Fannie and Freddie are developing alternatives to the interior inspection, to allow appraisers to do less field work and more analysis to help with the volume outweighing the number of appraisers.

FHA Updates New Construction Guidelines
FHA announced guideline updates for New Construction Financing, which may be used immediately for existing cases and is required to be used starting with FHA Case Numbers assigned on or after 01/04/2021. Refer to ML-2020-36 for details.

Newly Updated Disaster Areas for CA
The following areas in California were added as disaster areas due to ongoing wildfires. The disaster incident period declared 09/04/2020 and it’s ongoing. 

  • Napa, Shasta, and Sonoma Counties

Note: This is a FEMA declaration and will affect all loan programs. Fairway’s Disaster Area Appraisal and Re-Inspection requirements have been implemented.

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.
FWL highly encourages brokers to utilize this job aid to assist with your questions.
Lump Sum Seller Credits on CD
An operational process is under development for release to the Closing Team applying the Lump Sum Seller Credits on the final Closing Disclosure for certain loan instances.

Manufactured Housing Product Training 
Manufactured Home Product Training will soon become available again from our Training Team.  Look for future announcements advising when training offerings will be available.

Steve Jacobson, CEO - "Nothing is given. Everything is earned; one day at a time."