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Fannie Mae

Fannie Mae-Buster Brown

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Fannie Mae issues guidance on impact of government shutdown

On December 26, Fannie Mae issued temporary guidance relating to loan origination and loan servicing during the government shut down. According to LL-2018-06 , loans are not rendered ineligible for purchase solely because a borrower’s employment is directly impacted by the shutdown. However, the lender must still be able to obtain a verbal verification of employment prior to the time of loan delivery in order for the loan to be eligible for sale to Fannie Mae. For military borrowers, the lender can use a Leave and Earnings Statement dated within 30 calendar days prior to the note date in lieu of a verbal verification. Additionally, among other things, if a borrower is furloughed on or after closing, the loan remains eligible for sale to Fannie so long as the lender has obtained all required documentation, including the verbal verification.

The guidance also addresses government verifications of certain information. For IRS transcripts, Fannie Mae notes that Desktop Underwriter will continue to process tax transcript verification reports received prior to the shutdown, but will not able to access new verification reports for validation. As a result, requests for verification reports may remain in pending status until normal government operations resume. Further, Fannie Mae is temporarily allowing lenders to obtain verification of a borrower’s social security number, if needed, prior to the delivery of the loan. If the number cannot be verified prior to delivery, however, the loan will not be eligible for sale. With respect to flood insurance, Fannie Mae advises that it will purchase loans secured by properties located in Special Flood Hazard Areas so long as the loans meet certain conditions, including proof the borrower has completed an application for the insurance and paid the initial premium. Lenders are obligated to have a process in place to identify any mortgaged properties that do not have proper evidence of active flood insurance, or where an increase in coverage or renewal of existing policies would have occurred during the shutdown, and to make sure coverage is obtained once the shutdown ends.

Fannie Mae housing survey shows cooling sentiments toward selling, optimism on income

Expectations of slower home price growth and higher mortgage rates helped temper feelings about the housing market in Fannie Mae's latest National Housing Survey. However, respondents were also more likely to report income gains or expect their personal financial situation to improve.

The Home Purchase Sentiment Index for November stood at 86.2, up half a point from November but a year-over-year drop of 1.6 points. Fannie Mae said the monthly gain was largely due to a higher share of respondents reporting a significant increase to their household income. A net share of 24 percent said their income has grown substantially in the past 12 months, a survey high and a gain of 5 percentage points from October as well as 10 percentage points from November 2017.

"The HPSI has moved within a tight range over the past five months, as positive sentiment regarding the overall economy continued to offset cooling housing sentiment," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers' perceptions of growth in their household income reached a survey high this month, helping to absorb some of the impact of increasing mortgage rates on housing market activity. Meanwhile, the net share of consumers expecting home prices to increase over the next 12 months continues to moderate, dropping by 13 percentage points since this time last year."

Fannie Mae?

What is the difference between Fannie Mae and Freddie Mac in terms of their purposes and in terms of the assets they hold? Are these two essentially identical?


The main difference is how they came about. Freddie Mac is the result of the S&L bailout during the 80s. Fannie Mae's inception dates back to the time of the New Deal. They both, I believe, operate in a similar fashion.