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You are not imagining agency guideline changes happening while you sleep. Over the past three years, most of the agencies have worked in silence while in-corporating changes that impact a mortgage banker's responsibilities and lending requirements.
Fannie Mae published guideline updates February 23, 2016. Below are recent changes and enhancements to guidelines that impact QC Audits, Manuals and your company's Hiring Practices.
At the time you hire an individual and on a semi-annual basis the following policy is in place.
EXCLUSIONARY LIST SEARCH:
- ALL EMPLOYEES
- ALL TPO ORIGINATORS
ADDED EXCLUSIONARY LIST SEARCH BY FANNIE MAE:
FHFA'S SUSPENDED COUNTERPARTY PROGRAM LIST
Note: Fannie Mae lists HUD's Exclusionary Lists as: LDP/GSA. The GSA was rolled into EPLS several years ago, but this expression is used for the EPLS check which is actually checked through Sam.gov.
FRAUD SOFTWARE CHECK FOR ALL PARTIES INVOLVED IN A TRANSACTION
The Fraud Software Systems we rely on have not caught up with agency changes as well and usually capable of performing an Exclusionary List check on all parties i involved in a loan request. Fannie Mae first implemented the "check everyone" policy in 2010 to match HUD's requirement and has quietly changed Exclusionary List searches in 2015 and 2016.
Since it has been eliminated in the current Seller-Servicer Guide, this is a pre-closing check on all parties that is not required, on any conventional loan request.
At the time of this email, HUD is the only agency that requires an LDP-EPLS (Sam.gov) check on all parties involved in a loan transaction.
CREDIT REPORTS - POST CLOSING:
Fannie Mae and HUD require a 3-file credit report post-closing on loans sold or insured by them. Fannie Mae's position matches HUD's policy of a new full credit report (on the loans selected for post-closing) with the report being obtained at the time of loan selection (post-settlement).
Whatever format was used during the loan origination phase, (i.e., Tri-merge, RMCR, Non-Traditional), the new credit report is to be generated using that same format. For FHA loans if the borrower's self-employed business was required to have a credit report obtained, a new one must be provided for the post-closing review process. FHA's credit report policies came into place with cases ordered on or after: 9/15/2015.
QC AUDIT REPORT STATEMENT CHANGES:
LDP/EPLS Section: The comment will be limited to FHA loans whether the loan file contained the proper searches or not.
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Credit Reports: The
report will identify whether loan files sold to Fannie Mae or Insured by HUD have the necessary required post-closing credit report. A disclaimer will be added if we do not see new credit reports on all files, that the client (your company's name) is responsible for complying with its investors and agencies on the remaining loans selected for post-closing audit. We will not identify a missing new credit-report as a Significant Issue unless we are certain it was sold to Fannie Mae, or if it is a FHA credit qualifying loan with a case number issued on or after 9/15/2015.
For the March and 1st Quarter 2016 Selection: Donnashi Enterprises, Inc. will gladly coordinate with your QC Individual loans that do not need a new credit report. The QC Individual for the client should would know in advance if a loan was sold to Fannie Mae, or whether a specific investor requires compliance with Fannie Mae's Post-Closing Audit Practices.
For FHA Loans: If your company is the mortgagee, a new credit report is required on all credit-qualifying borrowers. If your company is a mortgagee but was not the underwriter on an FHA loan, HUD requires that the company comply with it's mortgagee approval standards in the 4000.1, which means a new credit report would be required. If a company "brokers" a loan to HUD Mortgagee but does not have a HUD Mortgagee status, a new credit report would not be required.
FACTA:
Donnashi Enterprises, Inc. cannot pull credit reports on your company's behalf. The FACTA categories for obtaining credit on an individual do not allow for anyone to pull one's credit without it being for the purpose of obtaining credit, housing or employment.
QC MANUAL CHANGES:
We will start to change all QC Plans over the weekend to incorporate the above changes. It will take us about a week to do so. For most of you, the free manual updates may have expired, however, we will be issuing the above two manual updates free of charge.
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