On March 23, 2020, Fannie Mae published Lender Letter LL-2020-03 regarding the impact of Coronavirus COVID-19 on loan originations. LL-2020-03 addresses questions and concerns that have been raised by industry partners. Fannie Mae is working together with Freddie Mac under the guidance of the Federal Housing Finance Agency (FHFA) to offer temporary measures and provide clarity to assist lenders in continuing to lend in a prudent and responsible manner. LL-2020-03 covers the following items and will updated and republished as new guidance becomes available:
- Verbal verification of employment: Offering flexibilities related to the lender’s process for obtaining the verbal verification of employment.
- Continuity of income: Reminding lenders of the importance of ensuring sustainable homeownership for borrowers in light of recent events.
- Submission of financial statements and reports: Extending the deadline for submission of financial statements and Form 582 to Apr. 30, 2020.
- Notes, electronic records, and signatures: Reminding lenders of our existing policies regarding possession of the original promissory note before loan purchase, and electronic signature requirements.
- Title insurance: Reminding lenders we accept lender’s policies of title insurance written on the 2006 ALTA loan title insurance form or a local equivalent, which includes “gap coverage.”
- Business continuity plans: Reminding sellers and servicers to have and to follow their own business continuity and resiliency plans.
These temporary measures are effective immediately for all loans currently in process and will remain in place for loans with application dates on or before May 17, 2020.
NOTE: The Selling Guide and Desktop Underwriter (DU) messages will not be updated to reflect these temporary policies.