Updated on Mar. 31, 2020
Lender Letter, LL-2020-03, Impact of COVID-19 on Originations addresses a number of questions and concerns that industry partners have raised to us. We are working closely with Freddie Mac under the guidance of FHFA to offer temporary measures to help ensure lenders have the clarity and flexibility to continue to lend in a prudent and responsible manner.
Summary of Lender Letter LL-2020-03, Impact of COVID-19 on Originations
Additions to Lender Letter on Mar. 31, 2020
- Age of documentation: modifying our age of document requirements from four months to two months for most income and asset documentation.
- Verification of self-employment: requiring lenders to confirm the borrower’s business is open and operating within 10 business days of the note date
- Market-based assets: updating policies for use of stocks, stock options, and mutual funds for down payment, closing cost costs, and reserves
- Powers of attorney: providing flexibilities for use of a power of attorney
- Remote online notarization:providing expansion of the use of remote online notarization
- Lender quality control requirements: allowing post-closing reverifications to occur verbally or electronically, and other flexibility related to the field review of appraisals
Lender Letter content published Mar. 23, 2020
- Verbal verification of employment: Offering flexibilities related to the lender’s process for obtaining the verbal verification of employment.
- Continuity of income: Reminding lenders of the importance of ensuring sustainable homeownership for borrowers in light of recent events.
- Submission of financial statements and reports: Extending the deadline for submission of financial statements and Form 582 to Apr. 30, 2020.
- Notes, electronic records, and signatures: Reminding lenders of our existing policies regarding possession of the original promissory note before loan purchase, and electronic signature requirements.
- Title insurance: Reminding lenders we accept lender’s policies of title insurance written on the 2006 ALTA loan title insurance form or a local equivalent, which includes “gap coverage.”
- Business continuity plans: Reminding sellers and servicers to have and to follow their own business continuity and resiliency plans.