Fannie Mae & Freddie Mac

Topic

Previous Requirements

New Requirements

Eligibility Requirements – Purchase & Refinance

A borrower who is not current and has missed payments on any mortgage loan is eligible for a new mortgage loan if those missed payments were resolved in accordance with the requirements below.

Reinstatement

If the borrower resolved missed payments through a reinstatement, they are eligible for a new mortgage loan. The lender must document the source of funds in accordance with eligible sources of funds in the Selling Guide if the reinstatement was completed after the application date of the new transaction. Proceeds from a refinance may not be used to reinstate any mortgage loan.

Loss Mitigation Solution

If outstanding payments will be or have been resolved through a loss mitigation solution, the borrower is eligible for a new mortgage loan if they have made at least three timely payments as of the note date of the new transaction as follows:

·    For a repayment plan, the borrower must have made either three payments under the repayment plan or completed the repayment plan, whichever occurs first. Note that there is no requirement that the repayment plan be completed.

·    For a payment deferral, the borrower must have made three consecutive payments following the effective date of the payment deferral agreement.

·    For a modification, the borrower must have completed the three-month trial payment period.

·    For any other loss mitigation solution not listed above, the borrower must have successfully completed the program, or made three consecutive full payments in accordance with the program.

Verification that the borrower has made the required three timely payments may include:

·    A loan payment history from the servicer or third-party verification service,

·    The latest mortgage account statement from the borrower, and

·    A verification of mortgage.

If these requirements are met on an existing mortgage loan being refinanced, the new loan amount can include the full amount required to satisfy the existing mortgage.

·    Fannie Mae loans must follow standard guidelines for Purchase, Rate/Term Refinance, and Cash-Out Refinance transactions.

·    Freddie Mac loans must follow standard guidelines for Purchase, Rate/Term Refinance, and Cash-Out Refinance transactions.

Verbal Verification of Employment (VVOE)

(Conventional, Government, Conventional Investment Property,

FNMA/FHLMC Second Home & Investment Property, Arc Access, Arc Elite)

Topic

Previous Requirements

New Requirements

VVOE Requirements

Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 10 business days (FHA requires 10 calendar days) prior to the Note Date.

Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 20 business days (USDA requires 30 calendar days) prior to the Note Date. 

Arc Access, Arc Elite, Conventional Investment, FNMA/FHLMC Second Home & Investment Property

·    Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 10 business days prior to the Note Date.

·    Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 20 business days prior to the Note Date.

Fannie Mae, Freddie Mac, FHA, and VA

·    Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 10 business days prior to the Note Date.

·    Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 120 calendar days prior to the Note Date.

USDA

·    Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 10 business days prior to the Note Date.

·    Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 30 calendar days prior to the Note Date.