AGENCY:

Bureau of Consumer Financial Protection.

ACTION:

Final rule; official interpretation.

SUMMARY:

The Bureau of Consumer Financial Protection (Bureau) is issuing this final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). The Bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z; this final rule revises, as applicable, the dollar amounts for provisions implementing TILA and amendments to TILA, including under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Bureau is adjusting these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2017.

DATES:

This final rule is effective January 1, 2018.

FOR FURTHER INFORMATION CONTACT:

Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552 at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

The Bureau is amending the official interpretations for Regulation Z, which implements TILA, to update the dollar amounts of various thresholds that are adjusted annually based on the annual percentage change in the CPI as published by the Bureau of Labor Statistics (BLS). Specifically, for open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 in 2018. For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount for the safe harbor for a first violation penalty fee will remain unchanged at $27 in 2018 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will remain unchanged at $38 in 2018. For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will be $21,032. The adjusted points and fees dollar trigger for high-cost mortgages in 2018 will be $1,052. For the general rule to determine consumers’ ability to repay mortgage loans, the maximum thresholds for total points and fees for qualified mortgages in 2018 will be 3 percent of the total loan amount for a loan greater than or equal to $105,158; $3,155 for a loan amount greater than or equal to $63,095 but less than $105,158; 5 percent of the total loan amount for a loan greater than or equal to $21,032 but less than $63,095; $1,052 for a loan amount greater than or equal to $13,145 but less than $21,032; and 8 percent of the total loan amount for a loan amount less than $13,145.

I. Background

A. Credit Card Annual Adjustments

MINIMUM INTEREST CHARGE DISCLOSURE THRESHOLDS

Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of the Bureau’s Regulation Z implement sections 127(a)(3) and 127(c)(1)(A)(ii)(II) of TILA. Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) require the disclosure of any minimum interest charge exceeding $1.00 that could be imposed during a billing cycle and provide that, for open-end consumer credit plans, the minimum interest charge thresholds will be re-calculated annually using the CPI that was in effect on the preceding June 1; the Bureau uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for this adjustment. When the cumulative change in the adjusted minimum value derived from applying the annual CPI-W level to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) has risen by a whole dollar, the minimum interest charge amounts set forth in the regulation will be increased by $1.00. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of the month. This adjustment analysis is based on the CPI-W index in effect on June 1, 2017, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The CPI-W is a subset of the Consumer Price Index for All Urban Consumers (CPI-U) index and represents approximately 28 percent of the U.S. population. The adjustment analysis accounts for a 2.1 percent increase in the CPI-W from April 2016 to April 2017. This increase in the CPI-W when applied to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) did not trigger an increase in the minimum interest charge threshold of at least $1.00, and the Bureau is therefore not amending §§ 1026.6(b)(2)(iii) and 1026.60(b)(3).

SAFE HARBOR PENALTY FEES

Section 1026.52(b)(1)(ii)(A) and (B) of the Bureau’s Regulation Z implements section 149(e) of TILA, established by the CARD Act.^[1] Section 1026.52(b)(1)(ii)(D) provides that the safe harbor provision, which establishes the permissible penalty fee thresholds in § 1026.52(b)(1)(ii)(A) and (B), will be re-calculated annually using the CPI that was in effect on the preceding June 1; the Bureau uses the CPI-W for this adjustment. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of the month. The CPI-W is a subset of the CPI-U index and represents approximately 28 percent of the U.S. population. When the cumulative change in the adjusted value derived Start Printed Page 41159from applying the annual CPI-W level to the current amounts in § 1026.52(b)(1)(ii)(A) and (B) has risen by a whole dollar, those amounts will be increased by $1.00. Similarly, when the cumulative change in the adjusted value derived from applying the annual CPI-W level to the current amounts in § 1026.52(b)(1)(ii)(A) and (B) has decreased by a whole dollar, those amounts will be decreased by $1.00. See comment 52(b)(1)(ii)-2. The 2018 adjustment analysis is based on the CPI-W index in effect on June 1, 2017, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The 2.1 percent increase in the CPI-W from April 2016 to April 2017 did not trigger an increase in the first violation safe harbor penalty fee of $27 or the subsequent violation safe harbor penalty fee of $38, and the Bureau is therefore not amending § 1026.52(b)(1)(ii)(A) and (B) for the 2018 calendar year.

B. HOEPA Annual Threshold Adjustments

Section 1026.32(a)(1)(ii) of the Bureau’s Regulation Z implements section 1431 of the Dodd-Frank Act,^[2] which amended the HOEPA points and fees coverage test. Under § 1026.32(a)(1)(ii)(A) and (B), when determining whether a transaction is a high-cost mortgage, the determination of the applicable points and fees coverage test is based upon whether the total loan amount is for $20,000 or more, or for less than $20,000. Section 1026.32(a)(1)(ii) provides that this threshold amount be recalculated annually using the CPI index in effect on June 1; the Bureau uses the CPI-U for this adjustment. The CPI-U is based on all urban consumers and represents approximately 88 percent of the U.S. population. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of each month. The 2018 adjustment is based on the CPI-U index in effect on June 1, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The adjustment to the $20,000 figure being adopted here reflects a 2.2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

Under § 1026.32(a)(1)(ii)(B) the HOEPA points and fees dollar trigger is $1,000. Section 1026.32(a)(1)(ii)(B) provides that this threshold amount will be recalculated annually using the CPI index in effect on June 1; the Bureau uses the CPI-U for this adjustment. The 2018 adjustment is based on the CPI-U index in effect on June 1, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The adjustment to the $1,000 figure being adopted here reflects a 2.2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

C. Ability To Repay and Qualified Mortgages Annual Threshold Adjustments

The Bureau’s Regulation Z implements sections 1411 and 1412 of the Dodd-Frank Act, which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling, and establishes certain protections from liability under this requirement for qualified mortgages. Under § 1026.43(e)(3)(i), a covered transaction is not a qualified mortgage if the transaction’s points and fees exceed: 3 Percent of the total loan amount for a loan amount greater than or equal to $100,000; $3,000 for a loan amount greater than or equal to $60,000 but less than $100,000; 5 percent of the total loan amount for loans greater than or equal to $20,000 but less than $60,000; $1,000 for a loan amount greater than or equal to $12,500 but less than $20,000; or 8 percent of the total loan amount for loans less than $12,500. Section 1026.43(e)(3)(ii) provides that the limits and loan amounts in § 1026.43(e)(3)(i) are recalculated annually for inflation using the CPI-U index in effect on June 1. The CPI-U is based on all urban consumers and represents approximately 88 percent of the U.S. population. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of each month. The 2018 adjustment is based on the CPI-U index in effect on June 1, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The adjustment to the 2017 figures being adopted here reflects a 2.2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

II. Adjustment and Commentary Revision

A. Credit Card Annual Adjustments

MINIMUM INTEREST CHARGE DISCLOSURE THRESHOLDS—§§ 1026.6(B)(2)(III) AND 1026.60(B)(3)

The minimum interest charge amounts for §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) will remain unchanged at $1.00 for the year 2018. Accordingly, the Bureau is not amending these sections of Regulation Z.

SAFE HARBOR PENALTY FEES—§ 1026.52(B)(1)(II)(A) AND (B)

The safe harbor penalty fee amounts remain unchanged at $27 for § 1026.52(b)(1)(ii)(A) (first violation safe harbor penalty fee) and $38 for § 1026.52(b)(1)(ii)(B) (subsequent violation safe harbor penalty fee) for the year 2018. Accordingly, the Bureau is not amending these sections of Regulation Z. The Bureau is amending comment 52(b)(1)(ii)-2.i to preserve a list of the historical thresholds for this provision.

B. HOEPA Annual Threshold Adjustment—Comments 32(a)(1)(ii)-1 and -3

Effective January 1, 2018, for purposes of determining under § 1026.32(a)(1)(ii) the points and fees coverage test under HOEPA to which a transaction is subject, the total loan amount threshold is $21,032, and the adjusted points and fees dollar trigger under § 1026.32(a)(1)(ii)(B) is $1,052. When the total loan amount for a transaction is $21,032 or more, and the points and fees amount exceeds 5 percent of the total loan amount, the transaction is a high-cost mortgage. When the total loan amount for a transaction is less than $21,032, and the points and fees amount exceeds the lesser of the adjusted points and fees dollar trigger of $1,052 or 8 percent of the total loan amount, the transaction is a high-cost mortgage. The Bureau is amending comments 32(a)(1)(ii)-1 and -3, which list the adjustments for each year, to reflect for 2018 the new loan amount dollar threshold and the new points and fees dollar trigger, respectively.

C. Ability To Repay and Qualified Mortgages Annual Threshold Adjustments

Effective January 1, 2018, for purposes of determining whether a covered transaction is a qualified mortgage under § 1026.43(e), a covered transaction is not a qualified mortgage if, pursuant to § 1026.43(e)(3), the transaction’s total points and fees exceed 3 percent of the total loan Start Printed Page 41160amount for a loan amount greater than or equal to $105,158; $3,155 for a loan amount greater than or equal to $63,095 but less than $105,158; 5 percent of the total loan amount for loans greater than or equal to $21,032 but less than $63,095; $1,052 for a loan amount greater than or equal to $13,145 but less than $21,032; or 8 percent of the total loan amount for loans less than $13,145. The Bureau is amending comment 43(e)(3)(ii)-1, which lists the adjustments for each year, to reflect the new dollar threshold amounts for 2018.

III. Procedural Requirements

A. Administrative Procedure Act

Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this final rule, in Regulation Z, comments 32(a)(1)(ii)-1.iv and -3.iv, 43(e)(3)(ii)-1.iv, and 52(b)(1)(ii)-2.i.E in supplement I are added to update the exemption thresholds. The amendments in this final rule are technical and non-discretionary, as they merely apply the method previously established in Regulation Z for determining adjustments to the thresholds. For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. The amendments therefore are adopted in final form.

B. Regulatory Flexibility Act

Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).

C. Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR part 1320), the Bureau reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.

List of Subjects in 12 CFR Part 1026

Advertising

Consumer protection

Credit

Credit unions

Mortgages

National banks

Reporting and recordkeeping requirements

Savings associations

Truth in lending

Authority and Issuance

For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below:

PART 1026—TRUTH IN LENDING (REGULATION Z)

1.The authority citation for part 1026 continues to read as follows:

Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.

2.In Supplement I to part 1026—Official Interpretations:

a.Under Section 1026.32—Requirements for High-Cost Mortgages, under 32(a) Coverage, under Paragraph 32(a)(1)(ii), paragraphs 1.iv and 3.iv are added.

b.Under Section 1026.43—Minimum Standards for Transactions Secured by a Dwelling, under 43(e) Qualified mortgages, under Paragraph 43(e)(3)(ii),paragraph 1.iv is added.

c.Under Section 1026.52—Limitations on Fees, under 52(b) Limitations on Penalty Fees, under 52(b)(1)(ii) Safe harbors, paragraph 2.i.E is added.

 

Source: https://www.federalregister.gov/documents/2017/08/30/2017-18003/truth-in-lending-regulation-z-annual-threshold-adjustments-credit-cards-hoepa-and-atrqm

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a rule amending the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule. The Bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending.

“The Home Mortgage Disclosure Act is a vital source of information on the health and fairness of the mortgage market,” said CFPB Director Richard Cordray. “Today’s amendments show that the Consumer Bureau is committed to ensuring that financial institutions are able to comply with the rule, and to promoting transparency across the largest consumer financial market in the world.”

The Home Mortgage Disclosure Act—originally enacted in 1975—requires most lenders to report information about the home loans that they originate or purchase, as well as applications received. Banking regulators and the public can use this data to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment in order to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns.

As directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB updated the HMDA regulation in 2015 to improve the quality and type of data reported by financial institutions. Most of the updated requirements take effect in January 2018, and the industry is working to bring operations into compliance.

Reporting Threshold

Under rules that are scheduled to take effect in January 2018, financial institutions would have been required under the Home Mortgage Disclosure Act to report home-equity lines of credit if they made 100 such loans in each of the last two years. Today’s final rule has increased that threshold to 500 loans through calendar years 2018 and 2019 so that the Bureau can consider whether to make a permanent adjustment. This change was initially proposed in July 2017.

This temporary increase in the threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the threshold for data collected beginning January 1, 2020.

Clarifications and Technical Corrections

Today’s final rule contains a number of clarifications, technical corrections, and minor changes to the HMDA regulation. These include clarifying certain key terms, such as “temporary financing” and “automated underwriting system.” The changes finalized today will also, for example, establish transition rules for reporting certain loans purchased by financial institutions. Another change will facilitate reporting the census tract of a property, using a geocoding tool that will be provided on the Bureau’s website. These changes were initially proposed in April 2017.

The CFPB is committed to well-tailored and effective regulations and has sought to carefully calibrate its efforts to ensure consistency with respect to consumer financial protections across the financial services marketplace.

The final rule is available at:

http://files.consumerfinance.gov/f/documents/201708_cfpb_final-rule_home-mortgage-disclosure_regulation-c.pdf 

The CFPB is also releasing today an executive summary of the final rule, updates to technical filing instructions, and other implementation materials.  The CFPB hopes that these materials will help financial institutions understand and implement the changes adopted in the final rule.

The regulatory implementation materials are available here: 

https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/hmda-implementation/

The technical instructions are available here:

 https://www.consumerfinance.gov/data-research/hmda/for-filers

###The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers  to take more control over their economic lives. For more information, visit consumerfinance.gov.  

Source: https://www.consumerfinance.gov/about-us/newsroom/cfpb-temporarily-changes-mortgage-data-rule-reporting-threshold-community-banks-and-credit-unions/

SUBJECT: EXTENSION OF CERTAIN HURRICANE-RELATED REQUIREMENTS AND PROPERTY INSPECTION REIMBURSEMENT FOR ELIGIBLE DISASTER AREAS This Guide Bulletin announces that our temporary selling and Servicing requirements related to Hurricane Harvey and Hurricane Irma in Bulletins 2017-14, 2017-16 and 2017-19 are extended to Mortgages and Borrowers whose Mortgaged Premises or places of employment are located in Eligible Disaster Areas impacted by all hurricanes on and after August 25, 2017 and through the 2017 hurricane season. However, the temporary suspension of foreclosure sales and evictions will only apply to Mortgaged Premises located in an Eligible Disaster Area as a result of Hurricane Harvey, Hurricane Irma and now Hurricane Maria. In the event of another hurricane, all previously announced selling flexibilities will be available as of the date of the Federal Emergency Management Agency (FEMA) major disaster declaration in Eligible Disaster Areas without further instruction from Freddie Mac. Freddie Mac selling-related systems will be updated as soon as possible after the disaster. We are also announcing details concerning property inspections and reporting requirements for Mortgages with properties in Eligible Disaster Areas.

TEMPORARY SELLING REQUIREMENTS Property inspection fee reimbursement Freddie Mac will reimburse Sellers through September 30, 2018 for property inspections completed prior to the sale or securitization of Mortgages secured by properties in Eligible Disaster Areas as a result of a 2017 hurricane:  Freddie Mac will reimburse Sellers after the Mortgage has been sold or securitized  The original appraisal must have been obtained prior to the area having been declared an Eligible Disaster Area  Freddie Mac will reimburse Sellers for actual inspection costs not to exceed $75 for an individual Mortgage  The Seller must maintain copies of the inspection invoice(s) in the Mortgage file More details regarding the reimbursement process will be posted on our Natural Disaster Relief web page. We will follow up with a Single-Family Update e-mail when additional information is available.

TEMPORARY SERVICING REQUIREMENTS FOR MORTGAGES IMPACTED BY HURRICANE MARIA Suspension of foreclosure sales For Mortgages secured by properties located in Eligible Disaster Areas affected by Hurricane Maria, Freddie Mac is requiring Servicers to suspend all foreclosure sales beginning on the date that FEMA declared the area to be an Eligible Disaster Area and lasting through December 31, 2017. However, if the Mortgaged Premises was identified as vacant or abandoned prior to Hurricane Maria, and the Servicer has completed its property inspection and confirmed that there is no insurable damage or ability to receive FEMA funds on the Mortgaged Premises, the Servicer may choose to proceed with the foreclosure sale on that Mortgage prior to December 31, 2017. TO: Freddie Mac Sellers and Servicers September 25, 2017 | 2017-21

Suspension of evictions:

Freddie Mac is notifying counsel providing default related legal services to suspend all eviction activities as of the date of this Bulletin for Borrowers with Mortgaged Premises in locations designated as an Eligible Disaster Area as a result of Hurricane Maria. We will continue to assess the damage and will reevaluate our requirements as circumstances dictate.

TEMPORARY SERVICING REQUIREMENTS FOR MORTGAGES IMPACTED BY AN ELIGIBLE DISASTER Reimbursement process for property inspections of Mortgaged Premises in Eligible Disaster Areas Effective for all property inspections conducted on and after August 29, 2017 of Mortgaged Premises in an Eligible Disaster Area As announced in Bulletins 2017-14 and 2017-19, Freddie Mac is aware that Servicers may need to conduct a property inspection of a Mortgaged Premises in an Eligible Disaster Area that would not normally be reimbursable in accordance with Guide Sections 9202.12 and 9701.9. As a result, we are announcing a temporary process for Servicers to seek reimbursement of the actual costs, subject to applicable expense limits, for exterior property inspections completed in accordance with Section 8404.2 and interior property inspections completed in accordance with Section 8202.11. For exterior property inspections, Servicers must use expense code 404005 (Exterior Property Inspection) with an expense limit of $15. For interior property inspections, Servicers must use expense code 404007 (Interior Property Inspection) with an expense limit of $20. However, if a Servicer already ordered or obtained a “FEMA inspection” where the cost exceeded the normal expense reimbursement amounts, Freddie Mac will reimburse those amounts if incurred prior to the date of this Bulletin. Servicers may temporarily submit property inspection reimbursement requests once per month via an Excel® spreadsheet to NPL_Invoices@freddiemac.com. The e-mail subject line should reference “Disaster related property inspection reimbursement request,” and the spreadsheet must include the following information for all Mortgages that a Servicer is seeking reimbursement for that month:  Freddie Mac Loan Number  Seller/Servicer Payee Code  Expense Code  Reimbursement request amount  Property inspection expense date paid  Vendor Name A Servicer unsure of its Seller/Servicer Payee code should send an e-mail request to 104_Expense@freddiemac.com. A property inspection completed on a Mortgage that was 60 or more days delinquent would already be required, and so is eligible for reimbursement in accordance with Sections 9202.12 and 9701.9. In this instance, Servicers must submit expense reimbursement requests in accordance with those Guide sections, and not through the temporary process described above.

EDR for Eligible Disasters We remind Servicers to report:  All Mortgages that are affected by an Eligible Disaster and are 31 or more days delinquent to Freddie Mac via EDR transmission within the first three Business Days of the month following the month the Servicer learned of the Eligible Disaster  Default action code 09 (Forbearance) for each month while the disaster forbearance plan status is relevant  Default action date (report the forbearance plan start date, which date may be prior to the Mortgage becoming 31 or more days delinquent)  Default reason code 034 (Eligible Disaster Area) for Mortgages where the Borrower’s Mortgaged Premises or place of employment is located in an Eligible Disaster Area  Default action code AW to notify us of the date of the Servicer’s first quality right party contact (QRPC) with the Borrower, which date must only be reported one time, in the month following the month when the event took place  Default action code AX to notify us of the date of the Servicer’s last QRPC with the Borrower, which date must only be reported one time, in the month following the month when the event took place Servicers should review Guide Exhibit 82, Electronic Default Reporting Transmission Code List, and the Electronic Default Reporting Quick Reference Guide for details on EDR.

CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at (800) FREDDIE.

Sincerely,

Christina K. Boyle Senior Vice President Single-Family Sales and Relationship Management

Source: http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1721.pdf

hington, D.C 20250 DATE July 7, 2017 PROCEDURE NOTICE RD MANUAL CHANGES INSERT RD INS 2018-G U.S. GOVERNMENT MOTOR VEHICLE OPERATOR’S (WSAL) INSTRUCTIONS. This Instruction is partially revised to clarify several issues. Each driver must now certify that they have a valid operator’s license. Form RD 2018-3 was developed for those employees that do not already have an AD-728 or Form RD 2018-1 on file. A log must be maintained for vehicle usage and a new request form. REMOVE INSERT Table of Contents; Table of Contents revised; All Pages. Pages 1 through 11 revised 07-07-17. RD HANDBOOK CHANGES INSERT RD HB-1-3555 SFH GUARANTEED LOAN PROGRAM TECHNICAL (WSAL) HANDBOOK. Chapter 16: Paragraphs 16.2, the power of attorney language was updated to clarify when it may be utilized;. Paragraph 16.11(C)(1), language regarding the maximum hazard insurance deductible was modified; Attachment 16-A, Reference to HUD-1 was updated to Closing Disclosure, link to the training resource library was updated and reference to Form RD 1980-18 was updated to Form RD 3555-18. REMOVE INSERT Table of Contents: Table of Contents: Pages 11 & 12; Pages 11 & 12 revised; Chapter 16 dated 03-09-16: Chapter 16 dated 03-09-16: Pages 16-1 & 16-2 and Pages 16-1 & 16-2 and 16-17 & 16-18; and 16-17 & 16-18; and Attachment 16-A. Attachment 16-A revised 07-07-17. (OVER) READ PROCEDURE – DISCUSS IN STAFF CONFERENCE – KEEP PROCEDURE MANUAL UP TO DATE Page 2 ISSUED: PN 501 July 7, 2017 FORM REPLACEMENT RD 2018-2 RURAL DEVELOPMENT VEHICLE ALLOCATION (WSAL) METHODOLOGHY (VAM) dated 06-17. Prescribed in RD Instruction 2018-G. The Form and FMI are revised to add a block for the Departmental approval. This Form and FMI are available on the Rural Development Instructions home page (http://www.rd.usda.gov/publications/regulations-guidelines). No paper copy distribution of this form will be made, and it will not be stocked in the warehouse. REMOVE INSERT FMI dated 08-21-13. FMI revised 07-07-17. RD 2018-3 REQUEST TO RESERVE/USE GSA MOTOR VEHICLE (WSAL) dated 06-17. Prescribed in RD Instruction 2018-G. The Form and FMI are revised to provide a method of tracking requests to use a GSA motor vehicle and provides a certification that the requester of a motor vehicles has a valid operator’s license. This Form and FMI are available on the Rural Development Instructions home page (http://www.rd.usda.gov/publications/regulations-guidelines). No paper copy distribution of this form will be made, and it will not be stocked in the warehouse. INSERT FMI revised 07-07-17. NO SPECIAL PROCEDURE NOTICE RELEASED. ADMINISTRATIVE NOTICES RELEASED: (See AN Checklist)

 

Source: http://www.tenaco.com/wp-content/uploads/2017/07/RHS-Procedure-Notice-501.pdf

SUBJECT: SELLING UPDATES This Guide Bulletin announces: Uniform Closing Dataset  Requirements for the delivery of the Uniform Closing Dataset through Loan Closing AdvisorSM – September 25, 2017 (New) Collateral representation and warranty relief expansion  Removal of the requirement that a Mortgage be submitted to Loan Product Advisor® to be eligible for collateral representation and warranty relief – August 4, 2017 Electronic Recording of paper and electronic closing and post-closing documents  Removal of the requirement that a Seller/Servicer retain a wet ink signed assignment of a Mortgage or a modification agreement when those paper documents are electronically recorded Selling System®  Requirements for third-party advisors, known as Secondary Market Advisors, to access the Selling System® to perform services for Sellers – July 31, 2017 (New)  Delivery requirements for low loan balance Mortgages – New  Pricing and contracting Guide terminology updates related to previously announced Selling System capabilities Additional Guide updates  Further updates as described in the Additional Guide Updates section of this Bulletin EFFECTIVE DATE All of the changes announced in this Bulletin are effective immediately unless otherwise noted. UNIFORM CLOSING DATASET Effective for Mortgages sold to Freddie Mac with Note Dates on and after September 25, 2017 When originally announced, the Uniform Closing Dataset (UCD) XML with the embedded closing disclosure PDF was to be required on all Mortgages sold to Freddie Mac with a Note Date on and after September 25, 2017. However, as communicated in our June 6, 2017 Single-Family News Center article, in response to Seller feedback regarding UCD adoption, the GSEs are offering a six-month relief period for embedding the closing disclosure PDF within the UCD XML file. Please refer to the UCD web page for more information. While Sellers must still submit the UCD XML file for Mortgages sold to Freddie Mac with Note Dates on and after September 25, 2017, they now have until at least April 2018 to deliver the XML file with the embedded PDF. Nonetheless, Sellers are encouraged to submit the UCD XML file with the embedded PDF starting on September 25, 2017 if they have the capability to do so. We will provide adequate notice to Sellers of the date when the delivery of the embedded PDF will be required. We have created new Guide Chapter 5801 to provide information and requirements related to the UCD and delivery through Loan Closing Advisor. TO: Freddie Mac Sellers July 12, 2017 | 2017-10 Page 2 Loan Closing Advisor is Freddie Mac’s electronic collection solution for the UCD that helps Sellers validate that their closing data aligns with the UCD. Loan Closing Advisor then assesses the data against the UCD specification, checking for the completeness, validity and accuracy of certain calculated values and consistency of the data. The submission of the UCD through Loan Closing Advisor is fulfilled when:  The transaction has received data quality feedback messages; and  The Loan Closing Advisor feedback certificate indicates that the UCD requirement has been satisfied To obtain access to Loan Closing Advisor, Sellers should contact their Freddie Mac Account Executive or visit the Loan Closing Advisor web page and click on the “Get Started” button to start the process. Guide impact: Guide Section 5801.1 COLLATERAL REPRESENTATION AND WARRANTY RELIEF EXPANSION Effective for appraisals submitted to the Uniform Collateral Data Portal® on and after August 4, 2017 In Bulletin 2017-3, we announced that a Mortgage must be submitted to Loan Product Advisor to be eligible for collateral representation and warranty relief. With this Bulletin, we are enhancing our offering by no longer requiring a submission to Loan Product Advisor. Therefore, eligibility will no longer be dependent on submission to Loan Product Advisor. Collateral representation and warranty relief status will continue to be communicated through the Uniform Collateral Data Portal®, Loan Collateral Advisor®, Selling System, Loan Coverage Advisor®, and when applicable, Loan Product Advisor and Loan Quality Advisor®. We are also updating our eligibility requirements to include that the Mortgage must have a loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio less than or equal to 95% to obtain collateral representation and warranty relief. Guide impact: Section 5601.9 ELECTRONIC RECORDING OF PAPER AND ELECTRONIC CLOSING AND POSTCLOSING DOCUMENTS In Bulletin 2016-16 we announced that, for closing documents that are electronically recorded, Freddie Mac does not require Seller/Servicers to store paper copies. However, electronically recorded post-closing documents such as assignments of Mortgages, modification agreements, etc., were not explicitly referenced in Sections 1401.14 and 1401.15, which were revised as part of Bulletin 2016-16. Based on Seller/Servicer feedback, we are now specifying that a Seller/Servicer does not need to store the original wet ink-signed paper assignments of Mortgages or modification agreements when such documents are electronically recorded. Seller/Servicers may now store Electronic (as defined in Section 1401.2) copies of electronically-recorded paper assignments of Mortgages or paper modification agreements, etc., but must do so securely and ensure such Electronic copies contain all the recording information. We have also clarified storage and delivery requirements for paper and electronically created closing and postclosing documents that are electronically recorded, as follows:  Seller/Servicers may store such Electronic copies of such documents as long as the copies or other Recording Confirmations from the Recording Office contain all of the recording information  Seller/Servicers must still deliver to the Document Custodian or Designated Custodian, as applicable  The original wet-ink signed paper assignments of Mortgages, powers of attorney, modification agreements, etc., that have been electronically recorded, and  Paper copies of such electronically recorded documents or other Recording Confirmations from the Recording Office Revising these requirements will create operational efficiencies for Seller/Servicers by reducing some storage costs and making it easier to store and retrieve documents. In addition, it reduces the risk of lost documents.

After delivery of the Mortgage to Freddie Mac, a Servicer may only enter into paper modification agreements with original wet-ink signatures, except for Electronic modification agreements under the Home Affordable Modification Program (HAMP®). Servicers must comply with the requirements set forth in Section 9205.20 with respect to HAMP eModification Agreements, as defined in Section 9205.20. With respect to non-HAMP eModification Agreements, Servicers may store such documents electronically provided they deliver to the Document Custodian or Designated Custodian, as applicable, the original wet-ink signed paper modification agreement and paper copies of such electronically recorded documents. At this time, Servicers remain subject to the paper document retention requirements set forth in Chapters 3301 and 3302 for those documents that have not been electronically recorded. Guide impacts: Sections 1401.14, 1401.15, 2202.4, 6304.1, 6304.3 and 9206.17 SELLING SYSTEM Authorizing access to the Selling System for third-party advisors Effective July 31, 2017 More Sellers are utilizing the services of third-party advisors, now defined as Secondary Market Advisors (SMA), for assistance on secondary market activities. We have added requirements for Sellers that want an SMA to perform duties on their behalf in the Selling System. These new requirements include forms that both a Seller utilizing an SMA and an SMA must complete to provide the necessary authorizations and create a Selling Agent relationship between the Seller and the SMA. Section 2403.3 is being repurposed to outline the use of SMAs and Selling Agents. It previously contained requirements regarding separate written agreements between the Seller and Freddie Mac for entering the Selling System. This is being removed as the written agreements have now expired. Additionally, we have added new Glossary definitions for the terms Secondary Market Advisor and Selling Agent. For an SMA to become a Selling Agent and be authorized to act on behalf of the Seller, the following must occur:  The SMA must complete, sign and deliver to Freddie Mac new Guide Form 478, Secondary Market Advisor Selling Agent Agreement, and  The Seller that will be utilizing the SMA must complete, sign and deliver to Freddie Mac new Form 900SA, Selling System Agent Identification and Authorized User Role Form, for each authorized employee of the Selling Agent. A Seller that currently has an SMA performing services on its behalf in the Selling System under a services agreement and has an executed and approved “Selling System Price Sheet Analyst User ID Request Form” and/or Form 900 is not immediately required to execute a Form 900SA unless and until one of the conditions listed in Section 2403.3(f) applies. Guide impacts: Sections 2403.1, 2403.3 and 2403.11 and Forms 478 and 900SA and the Glossary Cash payups for Mortgages with low loan balances Effective June 26, 2017 Our June 14, 2017 Single-Family News Center article described how we simplified the process in the Selling System to receive cash payups for fixed-rate Mortgages with specific loan attributes, such as UPBs less than or equal to $175,000. In order to take advantage of these cash payups for each Mortgage, Sellers must deliver the ULDD Data Point Investor Feature Identifier (Sort ID 368) and enter the applicable valid value provided in new Section 6302.39 associated with the UPB of the Cash Specified Pool Type to which the Mortgage has been allocated. Guide impacts: Section 6302.39 and Guide Exhibit 34 Page 4 Pricing and contracting terminology updates Bulletin 2017-2 announced new Selling System functionality for Sellers to obtain their Guarantor and MultiLender pricing for Purchase Contracts. In support of those changes, we are updating Guide terminology to align with the Selling System’s new capabilities. We are replacing references in the Guide to “Master Commitment number” with “Pricing Identifier,” which we are adding as a Glossary term. “Pricing Identifier” is defined as a number (or such other designation that Freddie Mac may select) that identifies an agreement providing the terms under which Freddie Mac will purchase eligible Mortgages over a fixed period of time. In addition, we are updating the Glossary as follows:  Replacing the term “Master Commitment” with the term “Pricing Identifier Terms,” which is defined as terms associated with a Pricing Identifier under which the Seller may sell Mortgages to Freddie Mac  Replacing:  “Effective Date for Delivery” with “Pricing Identifier Effective Date”  “Master Commitment Amount” with “Commitment Amount”  “Required Delivery Date” with “Pricing Identifier Expiration Date”  Updating the definitions for “Master Agreement,” “Minimum Contract Servicing Spread,” “Purchase Contract” and “Purchase Documents”  Removing the term “Maximum Master Agreement Amount” as it is no longer relevant All applicable Guide references have been updated to reflect these terminology changes. Pursuant to Section 1501.2, provisions, including terms of business in Master Agreements and/or Master Commitments and other Purchase Documents, are hereby amended such that all references to previously-defined terms are deemed to be references to the revised Glossary terms noted above. Sections 1501.1 and 1501.2 have been revised to reflect updates to Master Agreements and other Purchase Contracts. Loan Product Advisor feedback messages have been updated to reflect these changes. Guide impacts: Sections 1501.1, 1501.2, 1501.4, 1501.5, 1501.6, 1501.7, 1501.8, 5203.2, 6201.1, 6201.2, 6201.15, 6202.3, 6203.4, 6203.5, 6204.4, 6204.5, 6205.4, 6205.5, 6302.3, 6302.4, 6401.1, and 6401.2, Exhibits 6, 28 and 28A, Form 900 and the Glossary ADDITIONAL GUIDE UPDATES Concurrent Transfers of Servicing Seller/Servicers are encouraged to implement the below changes immediately, but must do so no later than October 9, 2017. In response to Seller/Servicer feedback for processing Concurrent Transfer of Servicing requests, we are clarifying:  Responsibilities between the Seller, the Servicer and the Servicer’s Document Custodian  When certification of the Notes must be performed As a result, we are updating the Glossary as follows:  Deleting the term “Transferor Seller”  Revising the term “Concurrent Transfer of Servicing” as follows: Page 5 A Transfer of Servicing initiated by a Seller to a Servicer that occurs, subject to prior Freddie Mac approval, concurrently with Freddie Mac’s purchase of a Mortgage on the Settlement Date: for the sake of convenience, the Seller may be referred to as the “Transferor Servicer” and the Servicer may be referred to as the “Transferee Servicer.” In each instance, the Mortgage is delivered for certification to the Servicer’s Document Custodian. Guide impacts: Sections 6301.6 and 7101.9, Form 960 and the Glossary Exhibit 13 The Federal Emergency Management Agency (FEMA) has revised the Standard Flood Hazard Determination Form, FEMA Form 086-0-32, Freddie Mac Exhibit 13, and extended the expiration date to October 31, 2018. Use of the new form is recommended; however, the previous form with the expiration date May 30, 2015 continues to be acceptable. Guide impacts: Section 8202.3 and Exhibit 13 GUIDE UPDATES SPREADSHEET For a detailed list of the Guide updates associated with this Bulletin and the topics with which they correspond, refer to the Bulletin 2017-10 (Selling) Guide Updates Spreadsheet available at http://www.freddiemac.com/singlefamily/guide/docs/bll1710_spreadsheet.xls. CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call Customer Support Contact Center at (800) FREDDIE. Sincerely, Christina K. Boyle Senior Vice President Single-Family Sales and Relationship Management

Source: http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1710.pdf

Servicing Guide Announcement SVC-2017-06 July 12, 2017 Servicing Guide Updates The Servicing Guide has been updated to include changes related to Property Inspection and Preservation Updates. These policy changes also apply to Home Keeper® loans but are not applicable to Home Equity Conversion Mortgage (HECM) loans. The affected topics for these policy changes are included below. Servicers should review the Servicing Guide and the Property Preservation Matrix and Reference Guide to gain a full understanding of the changes. Property Inspection and Preservation Updates In response to industry feedback and in an effort to better serve our customers, we are  updating the Property Preservation Matrix and Reference Guide to provide servicers with more specific and detailed procedures for preserving and completing inspections for properties that secure delinquent mortgage loans;  restructuring Servicing Guide D2-2-10, Requirements for Performing Property Inspections, to clarify requirements for ordering and completing inspections for properties that secure mortgage loans that are in default; and  making the process easier for completing maintenance work by adding or updating reimbursement limits in Servicing Guide F-1-06, Expense Reimbursement, for the following:  moisture control,  address discoloration,  roof cleaning,  repair/replace fascia,  repair/replace soffits,  emergency pump water,  plumbing services,  utility service – initial service and per month,  code violations for fines/fees/liens,  cleaning toilet – life of loan maximum expense limit added,  repair/replace fence gate/lania,  repair/replace exterior door, and  repair/replace exterior door jamb. Additionally, Servicing Guide E-3.3-03, Inspecting Properties Prior to Foreclosure Sale, has been updated to change the number of days to complete an inspection from 30 to 35 days prior to the foreclosure sale. Additional Servicing Guide Topics Impacted References to the revised Property Preservation Matrix and Reference Guide were added to the following topics:  A2-1-01, General Servicer Duties and Responsibilities  D1-6-02, Handling Notices of Liens, Legal Action, Other Actions Impacting Fannie Mae’s Interest  D2-2-10, Requirements for Performing Property Inspections  D2-3.3-01, Fannie Mae Short Sale  D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure)  E-1.2-02, Timing of the Foreclosure Referral for Mortgage Loans Generally  E-3.2-12, Performing Property Preservation During Foreclosure Proceedings © 2017 Fannie Mae. Trademarks of Fannie Mae. SVC-2017-06 2 of 2  E-3.3-03, Inspecting Properties Prior to Foreclosure Sale  E-3.5-02, Handling Third-Party Sales  F-1-06, Expense Reimbursement  F-1-09, Managing Foreclosure Proceedings Effective Date Policy changes must be implemented by October 1, 2017. However, servicers are encouraged to implement the updated expense limits and guidelines for these policy changes as of the date of this Announcement. ***** Contact your Customer Delivery Team, Portfolio Manager, or Fannie Mae’s Single-Family Servicer Support Center at 1- 800-2FANNIE (1-800-232-6643) with any questions regarding this Announcement. Carlos T. Perez Senior Vice President and Chief Credit Officer for Single-Family

Source: https://www.fanniemae.com/content/announcement/svc1706.pdf

BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1026 [Docket No. CFPB-2016-0038] RIN 3170-AA61 Amendments to Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z) AGENCY: Bureau of Consumer Financial Protection. ACTION: Final rule; official interpretation. SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is modifying the Federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act that are implemented in Regulation Z. This rule memorializes the Bureau’s informal guidance on various issues and makes additional clarifications and technical amendments. This rule also creates tolerances for the total of payments, adjusts a partial exemption mainly affecting housing finance agencies and nonprofits, extends coverage of the TILA-RESPA integrated disclosure (integrated disclosure) requirements to all cooperative units, and provides guidance on sharing the integrated disclosures with various parties involved in the mortgage origination process. DATES: The final rule is effective [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. However, the mandatory compliance date is October 1, 2018. For additional discussion of these dates, see part VI of the SUPPLEMENTARY INFORMATION Section below. FOR FURTHER INFORMATION CONTACT: Jeffrey Haywood, Paralegal Specialist, 2 Dania Ayoubi, Pedro De Oliveira, Angela Fox, Jaclyn Maier, Alexandra Reimelt, and Shelley Thompson, Counsels, and Krista Ayoub, David Friend, Nicholas Hluchyj, and Priscilla Walton-Fein, Senior Counsels, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street, NW., Washington, DC 20552, at 202-435-7700. SUPPLEMENTARY INFORMATION: I. Summary of the Final Rule For more than 30 years, Federal law required lenders to issue two overlapping sets of disclosures to consumers applying for a mortgage. In October 2015, integrated disclosures issued by the Consumer Financial Protection Bureau, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, took effect.1 The Bureau has worked actively to support implementation both before and after the effective date by providing compliance guides, webinars, and other implementation aids. To further these ongoing efforts, on July 28, 2016, the Bureau proposed amendments to the integrated disclosure requirements in Regulation Z (the proposal). 2 The Bureau is now issuing this final rule to memorialize certain past informal guidance, whether provided through webinar, compliance guide, or otherwise, and make additional clarifications and technical amendments. This final rule also makes a limited number of additional substantive changes where the Bureau has identified discrete solutions to specific implementation challenges. Specifically, among other changes, the final rule:

Source: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201707_cfpb_Final-Rule_Amendments-to-Federal-Mortgage-Disclosure-Requirements_TILA.pdf

advances in their origination and servicing processes.
We currently have policies describing our requirements for delivering an eMortgage to Fannie Mae, where the promissory note and other documents, such as the security instrument, are created, transferred, and stored electronically rather than on traditional paper documentation with pen and ink signatures. We have similar requirements with respect to servicing-related documentation.
Many states are beginning to consider the use of electronic notarization (“eNotarization”) as a means for expediting or facilitating the closing process. This next step in the process of moving deeper into electronic origination requires greater specificity in our current policies; therefore, we are taking this opportunity to clarify our requirements for eNotarization. The practice of electronic notarizations (including remote notarizations) is not limited to eNote/eMortgage transactions.
Many state laws expressly permit in-person eNotarization. Only Virginia and Montana, however, have adopted laws and regulations expressly permitting remote notarization for mortgage loan documents; that is, the use of real-time, two-way audio/video communication to notarize documents. eNotarization is addressed in the federal Electronic Signatures in Global and National Commerce (E-SIGN) Act and the Uniform Electronic Transactions Act (UETA). However, the lack of specific state recognition of remote notarization has hampered its widespread adoption, particularly when accomplished by out-of-state notaries.
We accept delivery and servicing of mortgage loans with electronic documents, including security instruments or mortgage loan modification agreements that have been electronically notarized, either in person or remotely using real-time, two-way audio/video communication, provided certain requirements are met. The Selling Guide has been updated to reflect these requirements. Additionally, the Servicing Guide will be updated in June to reflect these requirements.
Effective Date
These requirements are effective immediately.

Medium of Recorded Mortgages
Currently, we require the lender to maintain a mortgage loan file that contains “originals” of the recorded mortgage or
deed of trust, riders, and loan modification agreements. Documents that are electronically recorded often appear the
same as those recorded on paper, which has led to confusion as to which documents are “originals” under our policy and
which are electronic copies.
As a result, we have updated this policy to allow for copies of the recorded documents that contain the recording
information from the recorder’s office. In addition, we have clarified that we require originals of any applicable unrecorded
rider and any other unrecorded document that changes the mortgage loan terms (or otherwise affects our legal or
contractual rights under the mortgage).
Effective Date
These updates are effective immediately.
ARM Pass-through Rate after Adjustment
Lenders may take down whole loan commitments to deliver ARMs to Fannie Mae. Currently, ARMs are committed using
the required net margin. We are changing the committing and delivery of whole loan ARMs to instead use the gross
mortgage margin that is on the security instrument. The Selling Guide has been updated to remove references to multiple
Glossary Terms that no longer apply. The Glossary Term yield differential adjustment has also been updated.
Using the gross mortgage margin will also impact how the pass-through rate is calculated when the ARM adjusts. This
change will be communicated in a future Servicing Guide update.
These changes will further align whole loan ARM execution with the process for ARM MBS.
Effective Date
These changes are effective for whole loan ARMs committed (and subsequently delivered) on or after September 1, 2017.
Over Deliveries of Whole Loan Commitments
We limit the amount by which a lender can deliver loans over the whole loan commitment amount, known as the “over
delivery” amount. The current maximum over delivery amount is 25% of the original commitment amount, up to a
maximum of the one unit single family conforming loan limit (currently $424,100). We are simplifying the over delivery
limit to only require that it not exceed 25% of the original commitment amount.
Effective Date
This change will be effective on whole loan commitments taken on or after June 12, 2017.
Whole Loan Cash Back Pair-offs
As part of the June 10, 2017 update to the PE-Whole Loan application, we are giving more flexibility to lenders in pairingoff
whole loan commitments. We are removing the following requirements when determining if a commitment is eligible
for a cash back pair-off:
• pair-off quotes requested after the expiration date of the original commitment (defined as no later than 5:00 p.m.
Eastern time on the expiration date);
• the lender accepts Fannie Mae’s offer of an overdelivery.
NOTE: Commitments paired off through the automatic pair-off process will continue to be ineligible for cash
back.

Effective Date
This change will be effective for lender-requested pair-offs performed on or after June 12, 2017.
*****
Lenders who have questions about this Announcement should contact their Account Team.
Carlos T. Perez
Senior Vice President and
Chief Credit Officer for Single-Family

 

Attachment
Section of the Announcement Updated Selling Guide Topics
Use of Electronic Notarization
including Remote Notarization
 A2-5.1-03, Electronic Records, Signature, and Transactions
 A3-2-01, Compliance With Laws
 B7-2-04, Special Title Insurance Coverage Considerations
Medium of Recorded Mortgages  A2-5.1-02, Individual Mortgage Loan Files
ARM Pass-through Rate after
Adjustment
 C2-1.1-07, Standard ARM and Converted ARM Resale
Commitments
 E-3-05, Glossary of Fannie Mae Terms: E
 E-3-13, Glossary of Fannie Mae Terms: M
 E-3-18, Glossary of Fannie Mae Terms: R
 E-3-25, Glossary of Fannie Mae Terms: Y
Over Deliveries of Whole Loan
Commitments
 C2-2-01, General Requirements for Good Delivery of Whole Loans
Whole Loan Cash Back Pair-Offs  C2-1.1-04, Mandatory Commitment Extensions and Pair-Offs

 

Source: https://www.fanniemae.com/content/announcement/sel1705.pdf

SUBJECT: SELLING UPDATES This Guide Bulletin announces: Collateral representation and warranty relief – new automated collateral evaluation  Automated collateral evaluation, including requirements for: – June 19, 2017 (New)  Eligibility  Age of automated collateral evaluation offer  Delivery Condominium Projects  Simplified requirements for Detached Condominium Projects  Additions to our list of ineligible projects – May 31, 2017 and August 31, 2017  Elimination of separate underwriting paths for streamlined project reviews Appraisal and property specific requirements  Addition of Uniform Appraisal Dataset (UAD) condition and quality ratings and level of updating definitions to the Guide as new Exhibit 36  Additional details about the sales contract provided to the appraiser  Updates to our eligibility and appraisal requirements for a 1-unit property with an accessory unit – August 31, 2017 Area median income estimates  Updates to Loan Product Advisor® and the Home Possible® Income & Property Eligibility tool to reflect the area median income estimates for 2017 – June 13, 2017 EFFECTIVE DATE All the changes announced in this Bulletin are effective immediately unless otherwise noted. COLLATERAL REPRESENTATION AND WARRANTY RELIEF – NEW AUTOMATED COLLATERAL EVALUATION Effective June 19, 2017 Building on the collateral representation and warranty relief announced in Bulletin 2017-3, this Bulletin announces our automated collateral evaluation, which provides the Seller with the option to waive the appraisal requirements for certain Loan Product Advisor Mortgages. Freddie Mac’s automated collateral evaluation leverages data and proprietary models to assess whether the estimate of value provided by the Seller to Loan Product Advisor may be used to underwrite the Mortgage in lieu of the appraised value. When the Seller accepts an automated collateral evaluation offer to waive the appraisal, the Seller will be relieved of its representations and warranties related to value, condition and marketability of the property.

When accepted, this appraisal waiver will help shorten origination timelines and reduce costs for Sellers and Borrowers while providing greater certainty through collateral representation and warranty relief. Eligibility Loan Product Advisor offer The Seller will receive a feedback message indicating that a Mortgage is eligible for an appraisal waiver on the Loan Product Advisor Feedback Certificate. If the Mortgage is not eligible for an appraisal waiver, the Feedback Certificate will specify that an appraisal is required. If the Mortgage meets the eligibility requirements in this Bulletin and the Seller receives the feedback message indicating the Mortgage is eligible for the appraisal waiver, the Seller may accept the offer by delivering the Mortgage with the ULDD Data Points described in the “Delivery requirements” section below. Mortgage eligibility The following requirements apply for a Mortgage to be eligible for the appraisal waiver:  The Mortgage must be secured by a 1-unit Primary Residence or second home  The Mortgage must have a loan-to-value (LTV)/total LTV (TLTV) ratio less than or equal to 80%  The Mortgage must be a no cash-out refinance  Upon assessment by Loan Product Advisor, the Feedback Certificate must indicate the Mortgage is eligible for collateral representation and warranty relief with an appraisal waiver  The final submission to the Selling System® must indicate the collateral representation and warranty relief status is “Y” or “Yes” Ineligible Mortgages The following Mortgages are not eligible for an appraisal waiver:  Mortgages for which an appraisal has been obtained in connection with the Mortgage  Mortgages secured by one of the following:  A Condominium Unit  A Manufactured Home, or  A leasehold estate  Mortgages secured by Mortgaged Premises subject to resale restrictions  Construction Conversion and Renovation Mortgages  Freddie Mac Relief Refinance Mortgages SM – Same Servicer or Open Access  Mortgages with Freddie Mac Settlement Dates more than 120 days from the Note Date In addition, Sellers may not accept an appraisal waiver offer through Loan Product Advisor if any of the following apply:  The Seller is required by law or regulation to obtain an appraisal  The Seller is aware of conditions it believes warrant an appraisal being obtained. Examples include but are not limited to:  The property is located in an area recently impacted by a disaster  A contaminated site or hazardous substance exists affecting the property or the neighborhood in which the property is located Page 3 For Mortgages with appraisal waivers, the Seller must not make any representation that Freddie Mac has performed a property review or obtained a valuation of the Mortgaged Premises. Guide impacts: Guide Sections 4203.1, 4501.6, 4603.5 and 5601.9 Age of automated collateral evaluation offer The appraisal waiver offer is valid for 120 days. If the offer is more than 120 days old as of the Note Date, a resubmission to Loan Product Advisor is required to determine ongoing appraisal waiver eligibility. Note: If the Seller changes loan data (e.g., address of the property, loan amount, estimate of value, loan type, property type, occupancy of the property) in a subsequent Loan Product Advisor submission, the original offer may be invalidated and a different automated collateral evaluation eligibility determination may be provided. Guide impacts: Sections 5601.8 and 5601.9 Delivery requirements Once the Seller has accepted the appraisal waiver offer for a Mortgage, the Seller must deliver the following ULDD Data Points for the Mortgage:  Property Valuation Method Type (Sort ID 89) and enter a valid value of “None”  Investor Collateral Program Identifier (Sort ID 376) and enter a valid value of “Property Inspection Alternative” Guide impact: Section 6302.10 Additional resources We encourage Sellers to visit the Collateral Representation and Warranty Relief page on the Freddie Mac Learning Center for available training and resources. CONDOMINIUM PROJECTS Detached Condominium Projects As a result of recent Mortgage performance trends, we are simplifying the project eligibility requirements for Detached Condominium Projects: Detached Condominium Project Requirements Previous requirements Revised requirements The Seller was required to determine compliance with:  The Condominium Project review requirements in Section 5701.2(a), and  The Condominium Project eligibility requirements, which have two components:  General Condominium Projects in Section 5701.2(b), and  The Detached Condominium Project review type in Section 5701.7(b) The Seller was required to determine compliance with Section 5701.2(b), including determining that the project is not an ineligible project as specified in Section 5701.3. The Seller is required to determine compliance with:  The Condominium Project review requirements in Section 5701.2(a), and  The Detached Condominium Project eligibility requirements in Section 5701.7(b) The Seller is no longer required to determine compliance with Section 5701.2(b), including determining that the project is not an ineligible project as specified in Section 5701.3

 

Compliance with Sections 5701.2(a), 5701.2(b) and 5701.3 and one of the project review types in Guide Chapter 5701 is still required for all other Condominium Projects. Guide impacts: Sections 5701.2, 5701.3 and 5701.7 Ineligible Condominium Projects As a result of our research and analysis, we are updating our list of ineligible Condominium Projects in Section 5701.3 as follows:  Projects with names that include the words “hotel,” “motel,” “inn,” or “lodge” or a branded hotel chain or name remain ineligible unless the project does not have the characteristics of a hotel or similar type of transient housing  Projects with pending litigation involving minor matters that do not affect the safety, structural soundness, functional use or habitability of the project and in which the litigation amount is unknown may be eligible if the requirements in Section 5701.3(i) are met Additionally, effective August 31, 2017, we are updating our list of ineligible projects as follows:  A project or an investment in a project, including Condominium Unit ownership that is characterized or promoted as an investment opportunity, that could be deemed to be an investment security is an ineligible project  A project with mandatory dues or similar membership fees for the use of Amenities, such as clubhouses or recreational facilities, is ineligible with certain exceptions Guide impacts: Sections 1301.11, 5601.2 and 5701.3 Streamlined project review We are aligning and consolidating the maximum LTV/TLTV/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio requirements for “LP Accept Mortgages” and “All Other Mortgages” underwriting paths. The maximum LTV/TLTV/HTLTV ratio requirements are now indicated solely by occupancy type. As a result, the maximum LTV/TLTV/HTLTV ratio for streamlined project review of non-LP Accept Mortgages for Condominium Units in Established Condominium Projects not located in Florida is increasing from 80% to 90% for primary residences. Guide impact: Section 5701.4 APPRAISAL AND PROPERTY SPECIFIC REQUIREMENTS Uniform Appraisal Dataset (UAD) condition and quality ratings and level of updating definitions For ease of Seller use and efficiency in the appraisal underwriting process, we are incorporating the UAD condition and quality ratings and level of updating definitions into the Guide as new Guide Exhibit 36. These ratings and definitions were previously only published in UAD Specification Appendix D: Field-Specific Standardization Requirements, which is posted on our UAD web page. Guide impacts: Section 5601.12 and Exhibit 36 Information supplied to the appraiser – changes to the sales contract In response to Seller inquiries, we are specifying that Sellers are not required to provide the appraiser with an updated sales contract unless the updated terms impact the physical description or condition of the property. In such cases, the Seller must obtain an updated appraisal of the property. Changes to the sales contract that are not required to be provided to the appraiser include, but are not limited to:  Changes to the transaction terms such as sales price, financing or sale concessions, and  Date revisions, corrections to typographical errors, etc. Guide impact: Section 5601.3 Page 5 Property with an accessory unit Effective August 31, 2017 Currently, Freddie Mac will purchase a Mortgage secured by a 1-unit property with only one accessory unit. To assist Sellers in identifying an accessory unit, we are updating our requirements and guidance as follows:  Requiring that the accessory unit have a kitchen and a bathroom  Providing examples of characteristics that may indicate a 2-unit property rather than a 1-unit property with an accessory unit, such as the zoning and land use requirements, covenants or homeowners association requirements, the existence of separate meters, ingress/egress or separate addresses for the units We are updating our comparable selection requirements for a 1-unit property with an accessory unit that complies with the zoning and land use requirements (legal or legal non-conforming zoning compliance) to require that the appraisal must include at least one comparable sale with only one accessory unit. The accessory unit of the comparable sale must also comply with the zoning and land use requirements to demonstrate the conformity and marketability of the subject property to its market area. Additionally, to allow Sellers to deliver a Mortgage secured by a 1-unit property with an accessory unit that does not comply with the zoning and land use requirements (illegal zoning compliance), we are adding the following requirements:  The “Site” section of the appraisal report must indicate that the accessory unit does not comply with zoning and land use requirements (illegal zoning compliance)  At least two comparable sales with each having only one accessory unit must be included in the appraisal report. The accessory unit of each comparable sale must also be non-compliant with the zoning and land use requirements to demonstrate the conformity and marketability of the subject property to its market area  The Seller must confirm that the existence of the accessory unit will not jeopardize future hazard insurance claims Guide impacts: Sections 5601.2 and 5601.12 AREA MEDIAN INCOME ESTIMATES The FHFA has issued the area median income estimates for 2017. Loan Product Advisor and the Home Possible Income & Property Eligibility tool will be updated by start of business on June 13, 2017 to reflect the 2017 area median income estimates. Because some 2017 estimates are lower than the area median income estimates for 2016, Home Possible Mortgages underwritten using the 2016 area median income limits may no longer be eligible for sale. If a Home Possible Mortgage received an “AcceptEligible” evaluation prior to June 13, 2017, but receives an “Accept-Ineligible” when resubmitted to Loan Product Advisor on or after June 13, 2017 due only to the new area median income estimates (that is, no other purchase restriction/reason for ineligibility applies), we will honor the original Feedback Certificate for the “eligibility” and purchase the Mortgage as long as there is no change to the Borrower’s income and/or the address of the Mortgaged Premises. In these instances, the original Feedback Certificate (pre-June 13, 2017) must have been returned by Loan Product Advisor no more than 120 days before the Note Date and both Feedback Certificates must be retained in the Mortgage file. GUIDE UPDATES SPREADSHEET For a detailed list of the Guide updates associated with this Bulletin and the topics with which they correspond, refer to the Bulletin 2017-8 (Selling) Guide Updates Spreadsheet available at http://www.freddiemac.com/singlefamily/guide/docs/bll1708_spreadsheet.xls. CONCLUSION If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call Customer Support at (800) FREDDIE. Sincerely,

Christina K. Boyle

Senior Vice President

Single-Family Sales and Relationship Management

Source: http://www.freddiemac.com/singlefamily/guide/bulletins/pdf/bll1708.pdf

Reminder of MI Cancellation Requirements for Conventional Loans Servicers are reminded of their obligation to comply with the Homeowners Protection Act (HPA), the Guides, and all other Applicable Laws when cancelling mortgage insurance (MI) on conventional loans. Servicers must have policies and procedures in place to ensure MI is cancelled in accordance with HPA requirements based on borrower-requested cancellation, automatic termination, or final termination requirements. The MPF Program has reviewed the MI cancellation requirements in the Guides and clarified the guidelines. Each cancellation option now has its own section in the Guide, so that the requirements for each option are clear. See MPF Traditional Servicing Guide chapter 4.7.2. All eligibility requirements as specified in the HPA are incorporated into and are a pre-condition of the MPF Program’s MI cancellation policy.

Servicers of MPF Traditional and MPF Xtra loans are required to report all MI cancellations and terminations on conventional loans to the Master Servicer within five (5) Business Days of termination using the MI Cancellation Notice (Form SG343). See the updated form for additional information. MPF Traditional Servicing Guide chapter 4.7.2.6 and MPF Xtra Servicing Guide section 4.6 have been updated with the revised reporting requirements.

 

Source: https://www.fhlbmpf.com/ANNOUNCEMENTS/Lists/announcements/Attachments/54/MPF%20Announcement%202017-25.pdf