Fannie Allows Collateral Underwriter Instead of Field Reviews

By Phil Hall

Fannie Mae has issued a Lender Letter to its single-family sellers that updated the temporary policies enacted on March 31 in response to the COVID-19 crisis while reaffirming a key tenet regarding borrower income requirements.

The Lender Letter stated Fannie Mae is extending its pandemic-related temporary policies from the original May 17 cutoff date until June 30. In response to the risks associated with loans that have yet to be sold into the secondary market, Fannie Mae alerted lenders that it was “temporarily suspending bulk transactions and requiring that loans sold on a flow basis be no more than six months old to be eligible for sale to us.”

The government-sponsored enterprise also suspended representation and warranty relief for employment validation within the Desktop Underwriter validation service on loan case files created on or after May 4 through June 30, although lenders are still required to perform a verbal verification of borrower employment status.

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