The QC Concierge - March 2026

At QC Verify, we strive to be the leading provider of QC, Verification, and Validation Services in the mortgage banking industry. With our expertise and dedication to customer service and quality, we assist lenders in delivering accurate and compliant loan reports. 

Quality Control Considerations During the Government Shutdown

On March 3, 2026, Fannie Mae and Freddie Mac issued updated lending guidelines in response to the partial government shutdown that began on January 31, 2026.

Under the new guidance, lenders are permitted to close a loan without a completed Verification of Employment (VOE), as long as the file documents all attempts made to obtain that verification.

In addition, the requirement to include a paystub dated within 30 days of the Note date has been waived. Instead, lenders may use the most recent paystub issued before the shutdown began on January 31, 2026.

For loans with application dates on or after March 16, 2026, borrowers affected by the government shutdown must now meet higher reserve requirements.

“Reserves” are the funds a borrower must have available to cover their full monthly housing payment—including principal, interest, taxes, homeowners insurance, and any applicable costs such as HOA dues or flood insurance—after the loan closes.

Borrowers must have the greater of the following:

• Two months of documented reserves, or

• For loans underwritten through DU or LP: the reserve amount required by the Automated Underwriting System (AUS), including any overlays required by the Selling Guide.

The government shutdown is expected to have only minor effects on FHA and HUD operations. However, some areas may experience delays, including Home Equity Conversion Mortgages (HECM), Title I loans, and any endorsements that require review by an FHA underwriter (non–direct endorsements).

FHA Resource Centers will continue responding to general inquiries, though escalated requests may take longer than usual.

At this time, HUD has issued no guideline changes because of the shutdown.

FHA INFO 2026-07- Resolution to Neighborhood Watch Early Warning System Data Refresh and Errors

March 11, 2026 - On February 25, 2026, FHA published FHA INFO 2026-06 communicating that users of FHA’s Neighborhood Watch Early Warning System (Neighborhood Watch) were experiencing a variety of errors. Today, FHA reports that it has resolved many of the errors users were experiencing, and the monthly data refresh for the period ending January 31, 2026, was completed on March 7.

FHA has validated the refresh and confirmed that all known data discrepancies have been resolved. However, some data download issues are still pending resolution, and a few users have reported ongoing system access/query errors. Users should continue to report specific errors by contacting the FHA Resource Center referenced below.

Lenders that rely on Neighborhood Watch data for quality control selections should document any adverse impacts that the current system errors or refresh delays may have caused.

The monthly data refresh for the period ending February 28, 2026, is scheduled for March 21. Users should continue to check the FHA Connection Message Board and the Latest Refresh Date link under the Help/About tab in Neighborhood Watch for updates.

Credit Underwriting Updates from Freddie Mac

Guide Bulleting 2026-3

• Freddie Mac removed the minimum credit score of 720 when the subject property is a second home or Investment Property and each Borrower individually, and all Borrowers collectively, will be obligated on seven to 10 financed properties, including the subject property and the Borrower’s Primary Residence.

• For purchase transaction Mortgages, Freddie Mac provided additional requirements when proceeds of a gift of equity exceed the amount needed for closing. The gift of equity may only be:

  • Used to pay off or pay down the Borrower’s debt at closing when paid by the property seller to the creditor, and/or

  • Applied as a principal curtailment

• Clarification provided for income commencing after the Note Date to specify that a probationary period of time after employment starts (e.g., 90-day probationary, training or orientation period) is not considered a contingency of the employment offer.

Fannie Mae Selling Guide Announcement (SEL-2026-02)

Fannie Mae has announced updates to its income guidelines effective March 4, 2026. These updates include revisions to Chapter B3-3, Income Assessment, to enhance clarity and consistency in income policies. The updates also clarify appraisal review requirements for Texas Section 50 (a) (6) loans and allow lenders to use desk or field reviews to address deficiencies in new appraisals. These changes are mandatory for applications submitted on or after June 1, 2026, and are expected to simplify the guidebook for lenders to make it easier to read and understand.

Why Third-Party Attempts & Third-Party Verifications Matter

In alignment with Fannie Mae and Freddie Mac quality control guidelines, multiple verification attempts—including a third attempt—are required to demonstrate due diligence and ensure the accuracy of borrower information. These guidelines emphasize that all reasonable efforts must be made to obtain independent, reliable verification from the source. Ordering a third-party verification later in the process helps ensure we obtain validated information. This step strengthens loan quality, supports audit readiness, and provides our clients with confidence that all verification requirements have been thoroughly met. From time to time, you may notice a late verification request. This happens sometimes when the verifier (employer) responds late requiring us to then order a verification through a third-party vendor.

Third-Party Employment Update

As part of ongoing efforts to streamline billing and enhance reporting efficiency, QC companies are now utilizing MSA VOI/VOEs through The Work Number. At a flat rate of $75.50, these reports deliver complete employment history available through The Work Number, rather than being limited to a 36-month scope. We will be adopting MSA VOI/VOEs as our primary verification method moving forward. 

Third Party Verification Fee Update

Effective May 1st, Thomas & Company will charge a fee of $63.95 for verifications of employment/income. Please update your records. Thank you.