Best automation opportunities for loan processing

Join our expert panelists to learn how lenders can achieve their goals using the integration of intelligent document automation and RPA technology.

4 Strategies to Strengthen Customer Relationships

Discover the right strategies to execute fast-acting campaigns, track results and improve your bottom line – all while strengthening customer relationships.

HousingWire's 2021 Spring Summit

We’ve gathered four of the top housing economists to speak at our virtual summit, a new event designed for HW+ members that’s focused on The Year-Round Purchase Market.

An Honest Conversation on minority homeownership

In this episode, Lloyd interviews a senior research associate in the Housing Finance Policy Center at the Urban Institute about the history and data behind minority homeownership.

Politics & MoneyMortgage

FHFA extends relaxed appraisal, lending standards

Extends COVID flexibilities to Feb. 28, 2021

The Federal Housing Finance Agency (FHFA) announced on Thursday it has extended relaxed lending and appraisal standards put in place due to COVID-19 another month for both Fannie Mae and Freddie Mac.

The flexibilities surrounding alternative verifications of employment and appraisals were originally set to expire on Jan. 31, 2021, however, the government entity is now pushing that back to at least Feb. 28, 2021.

According to the release, the extended flexibilities include-

  • Alternative appraisals on purchase and rate term refinance loans;
  • Alternative methods for documenting income and verifying employment before loan closing; and
  • Expanding the use of power of attorney to assist with loan closings.

At the brink of the pandemic in March, the FHFA began directing both the GSE’s to ease their standards for property appraisals and verification of employment given the “extraordinary circumstances.”

In a letter sent by Fannie, the Enterprise cited many lenders were unable to obtain an appraisal based on a full interior and exterior inspection of the subject property as the virus continued to spread.


How the mortgage industry is working together to make housing more affordable

The issue of housing affordability has no one solution, but with collaboration across the entire housing industry, together we can create more opportunity for more people to achieve sustainable, long-term homeownership.

Presented by: Fannie Mae

In turn, the FHFA supervised the GSEs to begin using both drive-by appraisals and desktop appraisals in certain circumstances to ensure that the mortgage process was not held up due to appraisal issues.

Those alternative appraisals may become long-term solutions, as the FHFA released a Request for Input (RFI) through February that highlights specifically the benefits and pitfalls of hybrid appraisals, updating the Uniform Appraisal Dataset (UAD) and an increased use of appraisal waivers. As a result of their initial push in March, the Urban Institute reported a 14% increase overall in appraisal waivers, which contributed to an increase in refinance activity.

Beyond that, the FHFA noted that employment verification was becoming increasingly more difficult as many businesses had either shut down entirely or were running with limited crews. To that end, the GSEs will accept alternative forms of employment verification, including a recent paystub, to ensure lending can continue.

Specifically, the FHFA states that “in the event lenders cannot obtain verbal verification of the borrower’s employment before loan closing, the Enterprises will allow lenders to obtain verification via an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit.”

As always, the FHFA said it will continue to monitor the coronavirus situation and update policies as needed.

As of Jan. 14, the CDC has reported over 1.7 million news cases of the virus in the past seven days, though much of the recovery will rely on the dispersing of the vaccine.

Leave a comment

Most Popular Articles

FHFA doubles affordable housing disbursement to $1B

FHFA Director Mark Calabria has upset the #FannieGate folks: the GSEs will be doubling their affordable housing disbursement to $1B in 2020

Mar 01, 2021 By

Latest Articles

David Stevens and Kris Kully to speak at Spring Summit

Kully and Stevens will discuss the new regulatory regime the industry has pivoted to as a changing climate makes its way over housing.

Mar 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please