Impact of COVID-19 on Originations of MPF Xtra Loans
Effective Date: Immediately (unless otherwise noted)
On May 5, 2020, Fannie Mae issued an update to Lender Letter LL-2020-03 and Lender Letter LL-2020-04, communicating updates to temporary policies previously announced. The policies in this Lender Letter are effective immediately and are effective until Fannie Mae provides further notice, unless otherwise stated.
Additions to Fannie Mae Lender Letter LL-2020-03 - Impact of COVID-19 on Originations:
- Extended the application dates for the temporary policies in place to June 30, 2020.
- Incorporated a reminder that unemployment benefits can only be used as qualifying income if it is associated with seasonal employment.
- Clarified that the income of a furloughed borrower is not eligible under Fannie Mae’s temporary leave income policy.
- Temporarily suspended the representation and warranty relief for employment validation through the DU validation service.
- All loans must be purchased or securitized no more than six months from the first payment date.
Updates to Fannie Mae Lender Letter LL-2020-04 - Impact of COVID-19 on Appraisals:
- Extended the application dates for the temporary appraisal policies in place from May 17, 2020 to June 30, 2020
PFIs and Servicers of MPF XTRA must follow the relief policies and guidance issued by Fannie Mae, including the announcements below and by visiting Fannie Mae’s COVID-19 webpage.
In addition, PFIs and Servicers originating, delivering or servicing:
- MPF Traditional (Conventional) loans must follow the policies and guidance recently issued by the MPF Program. Please visit the MPF Website to view recently published MPF Announcements.
- MPF Government loans and MPF Government MBS loans, must follow policies and guidance issued by the applicable Government Agencies.
- MPF Direct loans, must follow policies and guidance issued by the product’s investor, Redwood Trust.
To gain a full understanding of these topics, PFIs and Servicers should review the entire Fannie Mae Lender Letter plus any applicable Fannie Mae Guide chapters, forms, or exhibits noted in the announcement.