In Mortgagee Letter 2023-01, the U.S. Department of Housing and Urban Development (HUD) addressed the use of the revised Fannie Mae and Freddie Mac single-family loan documents with FHA Title II forward mortgage loans. As previously reported, in July 2021 Fannie Mae and Freddie Mac released revised versions of their notes and security instruments for single-family loans. … Continue Reading
Mortgages
Federal Reserve Board final rule on benchmark replacements for contracts that use LIBOR published in Federal Register; Fannie Mae and Freddie Mac instruct servicers on LIBOR replacement indices
The final rule issued by the Federal Reserve Board to implement the LIBOR Act by establishing default rules for benchmark replacements in certain contracts that use LIBOR as a reference rate was published in today’s Federal Register and will become effective on February 27, 2023.
Yesterday, Fannie Mae and Freddie Mac issued instructions to servicers on replacement indices for their legacy single-family mortgage loans with 1-month, 6-month, and 1-year LIBOR indices. … Continue Reading
VA Eliminates HUD/VA Addendum to Uniform Residential Loan Application
By Richard J. Andreano, Jr. on
Posted in Mortgages, Regulatory and Enforcement
In Circular 26-23-03 the U.S. Department of Veterans Affairs (VA) announced the elimination of the HUD/VA Addendum to Uniform Residential Loan Application (VA Form 26-1802a), as well as the Federal Collection Policy Notice (VA Form 26-0503). The VA advises in the Circular that it has consolidated those forms into VA Form 26-1820, which is used by lenders to report a loan to VA for guaranty upon closing.… Continue Reading
HUD Issues Draft Reconsideration of Value Guidance with FHA Loans
By Richard J. Andreano, Jr. on
The U.S. Department of Housing and Urban Development (HUD) recently issued a draft Mortgagee Letter on reconsideration of value (ROV) policies in connection with appraisals for FHA insured mortgage loans. The draft Mortgagee Letter follows up on action plan items set forth in the Property Appraisal and Valuation Equity action plan jointly issued by HUD and other federal agencies in March 2022. … Continue Reading
CFPB Adjusts HMDA and HPML Asset Exemption Thresholds
By Richard J. Andreano, Jr. on
The CFPB recently issued a final rule increasing the asset exemption threshold under the Home Mortgage Disclosure Act (HMDA) and a final rule increasing the asset exemption threshold for the Truth in Lending Act (TILA) requirement to maintain an escrow account for a higher-priced mortgage loan (HPML).
Banks, savings associations and credit unions are not subject to HMDA for a calendar year if their assets as of December 31, of the prior calendar year did not exceed an asset threshold. … Continue Reading
CFPB annual CARD Act, HOEPA, QM adjustments do not include credit card penalty fees safe harbors
On December 23, the CFPB published a final rule in the Federal Register regarding various annual adjustments it is required to make under provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA, and the ability to repay/qualified mortgage provisions of Dodd-Frank. The adjustments reflect changes in the Consumer Price Index (CPI) in effect on June 1, 2022 and will take effect January 1, 2023.… Continue Reading
CFPB Addresses Mortgage Financing Options In a Higher Rate Environment
By Richard J. Andreano, Jr. on
The CFPB recently addressed mortgage financing options in view of the current higher mortgage loan interest rate environment. The CFPB comments on adjustable rate mortgage (ARM) loans, temporary buydowns, home equity lines of credit (HELOCs) and home equity loans, loan assumptions, and alternative financing options. While the CFPB notes the availability and features of the different financing options, it also warns consumers of potential risks.… Continue Reading
Fannie Mae and Freddie Mac Announce LIBOR Replacement Indices
By Richard J. Andreano, Jr. on
Posted in Mortgages
Following the adoption by the Federal Reserve Board of a final rule under the Adjustable Interest Rate (LIBOR) Act, Fannie Mae and Freddie Mac have announced replacement indices for their legacy London Interbank Offered Rate (LIBOR)-based loans and securities.
For single family mortgage loans and related mortgage-backed securities, as expected, Fannie Mae and Freddie Mac have selected the relevant tenor of the spread adjusted CME Term Secured Overnight Financing Rate (SOFR). … Continue Reading
FHA issues Mortgagee Letter modifying conflict of interest and dual employment policies
In Mortgagee Letter 2022-22 dated December 15, 2022, the FHA announced updates to its Single Family Housing Policy Handbook (HUD Handbook 4000.1) that modifies its policies governing conflicts of interest and dual employment. The modifications both narrow the employees who are subject to the conflicts of interest policies, and subjects those employees to what appear to be more significant restrictions. … Continue Reading
CFPB Issues Updated HELOC Booklet
By Richard J. Andreano, Jr. on
The CFPB recently published a notice advising of the availability of an updated version of the What You Should Know about Home Equity Lines of Credit booklet. The updated booklet is dated August 2022, and replaces the January 2014 version of the booklet.
The updated booklet is considerably shorter than the prior version of the booklet—11 pages instead of 19 pages. … Continue Reading