FHLB updates the MPF Traditional Selling and Servicing Guide
On March 1, 2019, the Federal Home Loan Bank’s Mortgage Partnership Finance (MPF) program announced the following updates and clarifications to the MPF Traditional Selling and Servicing Guide. Key points from updates to the MPF Traditional Selling guide are included below:
Automated Underwriting Systems (AUS) Recommendations
MPF clarified that, to be eligible for delivery, loans must either receive an acceptable DU or LPA recommendation, or must be manually underwritten pursuant to program underwriting guidelines.
Mortgage loans may be underwritten utilizing Fannie Mae’s DU or Freddie Mac’s LPA. With either AUS (DU or LPA), the lender must follow the overall program requirements, underwriting requirements, and eligibility requirements of the applicable GSE for that mortgage loan, and not the manual underwriting guidelines of the MPF selling guide. The only MPF program requirements that supersede DU/LPA requirements are the following:
- Max LTV: 95%
- Minimum FICO: 620
- Full Interior/Exterior Appraisal, regardless of what appraisal type the AUS may allow
- Occupancy requirements
- Property Type eligibility (for example: co-ops are not eligible )
- Products or loan attributes on the ineligible list (located in Selling Guide Chapter 2.7)
When a loan receives an ineligible recommendation from DU or LPA due to guidelines that do not render the loan ineligible for delivery under the MPF program, the lender should contact its MPF bank to confirm if the loan is acceptable for delivery.
HUD Guaranteed Section 184 Loans – Final Certification
If an Indian Loan Guaranty Certificate for a HUD section 184 loan cannot be obtained before loan delivery, and the participating financial institution (PFI) delivers the loan, it represents and warrants all of the following:
- A complete and satisfactory mortgage guaranty application was submitted to the government agency within the required timeframe
- All applicable fees were paid to the government agency within the government agency’s required timeframe
- The government agency has the legal authority to issue the guaranty or insurance and will have such authority for long enough to issue the guaranty within a time period consistent with its past practice
The MPF Bank, MPF Provider, or the Master Servicer may require the PFI to provide periodic reports on the guaranty status for such loans, and PFIs must notify the MPF Bank of any delays in obtaining an Indian Loan Guaranty Certificate or final certification. Failure to submit the final certification within twelve months of the loan funding date, or in a timely manner as determined by the MPF Bank, will necessitate repurchase.
These updates are effective immediately. The announcement, including updates to the MPF Traditional Servicing Guide, may be viewed in its entirety here: https://www.fhlbmpf.com/about-us/news/details/2019/03/01/mpf-annnouncement-2019-18
Comments are closed.