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Announcement 2020-084 - Fannie Mae SEL-2020-03 Update

Effective immediately, NewRez is aligning with the updates announced in Fannie Mae’s Selling Guide Announcement SEL-2020-03.

Effective immediately, NewRez is aligning with the updates announced in Fannie Mae’s Selling Guide Announcement SEL-2020-03.

 

Update to Lease Review Requirements

If there is a lease on the property that is being purchased by the borrower, rental leases that predate the mortgage could have a superior claim to the mortgage. NewRez must have clear title and first lien enforceability. When the subject property is rented, the rental agreement or lease may not include any provision that could impact NewRez’s first lien position.

 

Receipt and review of the existing lease, amendments, or subordinations as necessary, is required,  on purchase transactions, regardless of whether income is used to qualify and will apply to Fannie Mae and Freddie Mac loans.

 

While Fannie Mae will be eliminating the below DU message NewRez remains responsible for determining that any lease agreements do not adversely impact first lien position.

 

If there is an existing rental agreement or lease on the subject property, review the lease to verify that it does not contain any provisions that could affect Fannie Mae's first lien position on the property, and determine if it is subordinated to the new first mortgage.  Ensure that any tenant's rights to the property have been formally waived by the tenants if the lease will not be subordinate to the new mortgage.

 

Desktop Underwriter will be updated in a future release to remove the current message.

 

Update to Escrow Requirements on Limited Cash-Out Refinances

NewRez will no longer require an escrow account be established when non-delinquent property taxes for the subject property are included in the loan amount for Limited Cash-Out refinance transactions.