GSEs and Government Agencies Offer Temporary Flexibilities
By: Piper Beveridge, Vice President, Government and Strategic Relations, Ellie Mae
Last week, the government-sponsored enterprises (GSEs) and government agencies announced that they are addressing COVID-19 concerns with temporary flexibilities for key aspects of the mortgage manufacturing process, in addition to new and existing policies.
To help lenders close loans more efficiently, here’s an overview of the flexibilities:
- Appraisal: Take advantage of appraisal waiver offers within Fannie Mae's Desktop Underwriter® and Freddie Mac Loan Product Advisor®. In addition, Fannie Mae, Freddie Mac, FHA, and VA are allowing lenders to obtain a desktop appraisal or exterior-only appraisal for certain loans when obtaining a traditional appraisal is not possible.
- Employment Verification: The GSEs and government agencies are now allowing lenders to re-verify employment using alternative methods if a verbal verification of employment is not possible. The alternative verification methods include:
- An email from the company email address (Fannie Mae and Freddie Mac only)
- A recent year-to-date paystub
- A bank statement with evidence of a recent direct deposit
In addition, there are several existing or permanent policies from the GSEs that lenders can take advantage of during this time as well.
- Title Insurance: Lender title insurance with gap coverage is already acceptable if there are delays in recording the deed.
- Remote Online Notary: The GSEs have expanded the number of states for which remote online notary is approved, increasing the number of loans that can be closed with no in-person interaction.
Finally, while they have provided flexibility to handle certain situations, the GSEs and government agencies have also made updates to timelines and age of documents to ensure that disruptions to income are appropriately considered during the underwriting process.
Here are the Lender Letters from the GSEs and government agencies with specifics on eligibility and effective dates for each announcement:
- Fannie Mae: Appraisal
- Fannie Mae: Impact of COVID-19 on Originations
- Freddie Mac: Selling Guidance Related to COVID-19
- FHA – Appraisal and Verifications
- VA – Appraisal
- VA – Employment Verification
To get more detail on all the partner integrations being developed to support lenders during COVID-19 please visit the Ellie Mae Marketplace and sign up below for full updates on this innovation.