Fannie Mae Updates Selling Guide
Key highlights include appraisals, confidentiality and seller/servicer financial eligibility requirements
January 31, 2017, Fannie Mae issued Announcement SEL-2017-01 which announces a number of Selling Guide updates. Below is a brief summary of key updates. Please refer to Announcement SEL-2017-01 for additional updates and complete information on the topics highlighted in this article.
Confidentiality of Information and Data Breach
A seller/servicer often obtains confidential information about borrowers, security properties, and Fannie Mae when performing underwriting, origination, selling, servicing, or other activities under the Selling and Servicing Guides. Fannie Mae has updated the confidentiality of information policies concerning a number of control areas.
Seller/Servicer Financial Eligibility Requirements
Fannie Mae is changing certain policies to allow the use of discretion, when warranted, to determine whether a breach of the Lender Contract should be called. The Selling Guide will continue to provide guidance regarding the types of situations that could result in a breach being called, such as declines in net worth.
Comparables in New Projects or Subdivisions
Currently, Fannie Mae requires the appraiser to select at least one closed sale from the subject subdivision or project and one sale from outside the subject subdivision or project when selecting comparables for the appraisal. With this update, two pending sales will be acceptable in lieu of one closed sale in the subject subdivision or project in the event closed sales are not yet available. When this flexibility is used, the appraiser must also provide at least three closed comparable sales from outside the subject subdivision or project.
Property Inspection by Appraiser Trainee
The updates clarified the existing policy that allows an unlicensed or uncertified appraiser or an appraiser trainee to complete the property inspection. When the unlicensed or uncertified appraiser or appraiser trainee completes the property inspection, the supervisory appraiser is not required to also inspect the property.
Adjustments to an Appraisal for Sales Concessions
The update clarified that appraisers may use dollar for dollar adjustments for financing or sales concessions when such an adjustment approximates the local market’s response to these types of concessions.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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