JSMedia – Until June 2020, lenders must confirm all mortgages. The purpose of this requirement is to protect consumers from predatory lending practices. For instance, the CFPB has outlined the types of verification that are required after the loan is made. The final step in the mortgage process is to obtain an approval from a licensed lender. In addition, the lender must confirm all mortgages based on the borrower’s ability to repay.
Mortgage Claims Alert
Fannie Mae and Freddie Mac recently updated their guidelines regarding mortgage loan origination. They have addressed issues related to the age of income documents, self-employed verification, use of market-based assets in underwriting, powers of attorney, and remote online notarization. They have also lowered the maximum document age from 120 days to 60 days. In addition, the mortgage loan closing must obtain a copy of the borrower’s most recent quarterly statement.
Lenders must confirm all mortgages in compliance with the new law. The updated rules will be effective as of October 1, 2017. Lenders must consult the Announcements carefully before making any changes. While these rules are uniform across the country, there may be a state-specific requirement. Other changes may be necessary to the deed of trust or mortgage. Ultimately, the client must follow the guidelines for the loan.