Fannie Mae issued Servicing Guide Announcement SVC-2018-02 (Announcement), setting forth updates to the Servicing Guide. Fannie Mae updated the Servicing Guide to incorporate industry best practices with respect to HomeStyle Renovation mortgage loans. Pursuant to the updates: property inspections are now required before escrow draw requests may be approved; the requirement that all repairs be completed by licensed contractors now extends to subcontractors (in jurisdictions where licensing applies); the HomeStyle Completion Certificate (Form 1036) is retired, and the Appraisal update and/or Completion Report (Form 1004D) is now mandatory to evidence project completion in all cases; an updated appraisal is now required when repairs deviate materially from the original renovation plan, and any increases in the loan-to-value ratio of the mortgage loan as a result of such deviations must be self-reported to Fannie Mae; and a certificate of occupancy must be obtained upon completion of the renovations. Fannie Mae also updated the Allowable Foreclosure Attorney Fees Exhibit to reflect changes to the maximum allowable foreclosure attorney fees for AL, CO, GA, Guam, MD, MI, MN, MO, MT, NC, RI, TX and VA. In addition, Fannie Mae clarified that servicers must not extend or shorten the term of a mortgage loan under a Fannie Mae Cap and Extend Modification for Disaster Relief if the modified P&I payment is less than the current P&I payment (after capitalizing arrearages and setting the modified interest rate). The updates pertaining to HomeStyle Renovation mortgage loans become effective September 1, 2018 (however, servicers are encouraged to implement the updates immediately). The updates with respect to maximum allowable foreclosure attorney fees become effective July 1, 2018 (however, servicers are encouraged to implement the new fees as soon as possible). All other changes are effective immediately.
Click here to view the Fannie Mae Servicing Guide Announcement SVC-2018-02
