In our initial COVID-19 blog we touched on process triage, as well as preliminary origination and servicing guideline changes and relief options. More updates are occurring at a rapid pace as both the industry and government agencies strive to stay in front of the projected wave of delinquencies. Amidst this heightened disaster response, it’s important to not lose sight of COVID-19 changes, their implementation, and subsequent QC and audit to ensure compliance.
Identifying and implementing temporary relief requirements and programs, while managing staffing availability and consumer concerns, is a tremendous challenge being experienced across the mortgage industry.In effort to help navigate these trying times we’ve provided highlights of recent COVID-19 changes to origination and quality control practices as published by the CFPB, Veterans Administration (VA), Federal Housing Authority (FHA). There will certainly be continued updates and Quality Mortgage Services (QMS) is committed to helping our clients and prospects stay abreast of the situation as it evolves.
CFPB Data Suspension
In an effort to ensure financial institutions have sufficient bandwidth to address customer concerns during the COVID-19 impact timeframe, the Consumer Financial Protection Bureau (CFPB) has suspended reporting requirements on a number of regulatory fronts, including quarterly Home Mortgage Disclosure Act (HMDA) reporting. Although financial entities must continue to collect data, the often cumbersome reporting process will resume at a later date.
VA COVID-19 Highlights – Circular 26-20-10 and 26-20-11
Modification to employment/income verification requirements
‘Break in employment’ classification exemption
Exterior-Only appraisal acceptance with conditions
eMortgages and electronic note requirements
Flexibility in employment re-verification requirements
Acceptance of Exterior-Only or Desktop-Only appraisals
Appraisal updates and work completion report requirements relaxed
Fannie Mae COVID-19 Highlights – Communications Lender Letter 2020-03, 2020-04,
Guidance for 10-day pre-closing VOE
Note, eRecord and signature requirements
Continuity of income and title insurance reminders
Business continuity plan adherence
Reduction of documentation aging requirements
POA flexibility
Expansion of remote notary parameters
Lender QC requirements loosened for post-closing re-verification
Appraisal guidelines:
Field review appraisal flexibility
Order of preference for permissible appraisals removed
Temporary permissions for exterior-only or desktop appraisals
Appraisal waiver option reminder
New construction documentation and HomeStyle® renovation inspection alternatives
Bulletin 2020-5, 2020-8
Guidance for 10-day pre-closing VOE
Income continuity guidance
Electronic record and signature guidance
Title insurance reminder
Business continuity plan adherence
Temporary relaxation and flexibility in appraisal requirements – tied to property type
Temporary credit underwriting changes
Income and asset documentation aging and requirements
Self-employed borrower business verification
Temporary appraisal flexibility for new construction
Temporary guideline flexibility for CHOICERenovationSM and GreenCHOICE MortgagesSM
POA, remote notary, eSign and wet signature guidance
Temporary post-funding QC flexibility
Alternative re-verification requirements
Alternative filed review options
Keeping a sound track on the continued ebb and flow of COVID-19 business requirements and their subsequent impact necessitates an experienced QC and audit partner. QMS is here to assist you in this endeavor. Let us help your team manage risk exposure and stay compliant during these unprecedented times.
QMS is a boutique full-service risk management and mortgage compliance solutions company that has been active in the mortgage industry for decades. As a dedicated member of the Mortgage Bankers Association (MBA), we are committed to both the industry and our valued customer base.As COVID-19 continues to wreak havoc on our businesses and our lives, we encourage you to connect with us and learn how our unique set of solutions can support your quality control and audit needs, including pre-funding, pre-purchase due diligence, post-closing and early payment default, as well as numerous other tools and audits.