FNMA/FHLMC Product Updates

Per recently announced agency guideline updates, LoanStream Mortgage (LSM) announces the following: 

• Age of Documentation: Applies to all Conventional loans that are not cleared for docs by 4/9/2020
  • All asset statements must be dated within 60 days of the note date.
  • For Quarterly statements, the most recent quarterly statement is required (3/31/2020).
  • As a reminder, we already require paystubs, WVOE or YTD P&L to be dated within 10 days of closing (with exception to non-credit qualifying streamlines and IRRRL’s).  We also require an independently verified VVOE before docs and at time of funding (on all transactions), including verification that any self-employed business is open and operating.  Any change in status or income, the loan must be sent back to underwriting.  Please see credit memo dated 3-26-2020 for detailed employment re-verification requirements.
  • Expiration Dates for Credit, Title, Appraisals and Retirement and SS Income currently remain unchanged.
• Market Based Assets:  Applies to all Conventional loans that are not cleared for docs by 4/9/2020
  • Stocks, Stock Options & Mutual Funds
    • When used for down payment or closing costs, evidence of the borrower’s actual receipt of funds realized from the sale or liquidation must be documented in all cases.
    • When using for reserves, only 70% of the value of the asset may be considered, and liquidation is not required.
• Power of Attorneys:
  • Currently, LSM is NOT aligning with Fannie Mae and Freddie Mac’s POA flexibilities.  The following persons connected to the transaction remain ineligible as attorney-in-fact:
    • The lender, any affiliate of the lender, any employee of the lender; 
    • The loan originator, employer of the originator, any employee of the originator;
    • The closing agent, the title company or any employee thereof;
    • Any real estate agent, employer of the agent, employee of the agency.
  • Power of Attorney must be specific to our transaction and fully executed.
  • When a Power of Attorney is utilized, the initial application still requires the borrower’s signature and not that of the Attorney in Fact.
  • Cash Out Transactions do not allow a Power of Attorney under any circumstance.
• Remote Online Notarization (RON):
  • Currently, LSM will not accept the use of remote online notarizations.  We will continue to monitor our position on this topic.
• COVID-19 Borrower Attestation:
  • We have implemented a new certification form where borrowers must attest to ability to repay prior to funding.  This is required to be executed by all borrowers on a transaction.  Funding will not commence otherwise.  Funders will be required to review all answers.  Any negative answers will require the funding be held and the loan go back to underwriting.

Should you have any additional questions, please contact your manager.