Selling Guide Announcement Regarding Disaster Policy and DU Refi Plus and Refi Plus Property Policies

PrintEmail
MBS News and Announcements

Selling Guide Announcement Regarding Disaster Policy and DU Refi Plus and Refi Plus Property Policies

Fannie Mae informed lenders in a selling guide announcement published today about its policy regarding delivery of loans that are in areas impacted by disasters such as Hurricane Sandy. The following are some key points from the announcement:

  • For mortgage loans that are not delivered as part of DU Refi Plus or Refi Plus, lenders must affirm the representations and warranties that the property is not damaged; that the mortgage is an acceptable investment for Fannie Mae; and that the lender is not aware of any circumstances that may cause the mortgage to become delinquent or adversely affect the mortgage's value or marketability.
  • Lenders are given a certain criteria when determining if a mortgage loan affected by a disaster can be delivered to Fannie Mae such as whether the property damage is minor and does not impact the safety, soundness, or structural integrity of the property.
  • For mortgage loans that are delivered as part of DU Refi Plus or Refi Plus, since Fannie Mae, has the risk of loss on these loans, Fannie Mae will not require the property to be repaired prior to the mortgage loan being delivered to Fannie Mae so long as insurance is in place prior to delivery of the loan to Fannie Mae.
  • Fannie Mae is eliminating the option that allows the lender to use the original appraisal for all Refi Plus transactions. A new appraisal based on an interior and exterior inspection is required for all Refi Plus transactions, and the lender is relieved of its representations and warranties with respect to the value, condition, and marketability of the property.

As a reminder, DU Refi Plus and Refi Plusare Fannie Mae programs that are part of the Home Affordable Refinance Program (HARP) through which Fannie Mae is offering refinances of existing Fannie Mae loans.

For further information regarding this announcement, please contact the Fixed-Income Securities Investor Helpline at 1-800-237-8627 or email fixedincome_marketing@fanniemae.com.

Page originally published: 11/01/12