Fannie Mae 2010 Annual Report Download - page 158

reducing investor and lender risks. As part of the LQI, we have implemented or announced certain
initiatives designed to validate certain borrower and property information and collect additional property
and appraisal data prior to or at the time of delivery of the mortgage loan:
• Implementation of FHFA’s Uniform Mortgage Data Program that provides a common approach to
collection of the appraisal and loan delivery data required on the loans that lenders sell to Fannie Mae;
• Development of the Uniform Loan Delivery Dataset definition of single-family loan delivery data
requirements for all mortgages delivered to either GSE on or after March 19, 2012;
• Launch of EarlyCheck
TM
, a new service that provides lenders access to loan delivery data checks that
are designed to help them identify potential data problems at any point prior to loan delivery;
• Adjustments to pricing of flow business for mortgage loans with certain risk characteristics to ensure that
Fannie Mae is positioned to provide a stable source of liquidity to its lender partners;
• On October 18, 2010, the Federal Reserve Board released an interim final rule on appraiser independence.
Under the Dodd-Frank Act, promulgation of the interim final rule resulted in the termination of the Home
Valuation Code of Conduct (“HVCC”). In October 2010, we announced the Appraiser Independence
Requirements that we, FHFA and key industry participants developed to replace the HVCC. The
Appraiser Independence Requirements maintain the spirit and intent of the HVCC and continue to provide
important protections for mortgage investors, home buyers, and the housing market;
• Updating of our existing quality control standards to require that lenders follow our revised requirements
for their quality control plans, reviews and processes, as well as updated requirements for the approval
and management of third-party originators. We have also increased our enforcement and monitoring
resources to increase lender compliance with these revised standards;
• Changes to interest-only mortgage loans, including minimum reserve and FICO credit score requirements,
lower LTV ratios, and the elimination of interest-only eligibility for certain products, including cash-out
refinances, 2- to 4- unit properties and investment properties;
• Adjustments to the qualifying interest rate requirements for adjustable-rate mortgage loans with an initial
term of five years or less to help increase the probability that borrowers are able to absorb future payment
increases;
• Elimination of balloon mortgage loans as an eligible product under our standard business;
• Continuation of our providing guidance to assist servicers in implementing the eligibility, underwriting
and servicing requirements of HAMP. For example, we implemented changes to require full verification
of borrower eligibility prior to offering a trial period plan and issued guidance around income verification
options;
• Enhancements to loss mitigation options to provide payment relief for homeowners who have lost their
jobs by offering eligible unemployed borrowers a forbearance plan to temporarily reduce or suspend their
mortgage payments;
• Introduction of the Home Affordable Foreclosure Alternatives program which is designed to mitigate the
impact of foreclosures on borrowers who were eligible for a loan modification under HAMP but
ultimately were unsuccessful in obtaining one;
• Introduction of servicer requirements for staffing, training and performance monitoring of default-related
activities as well as enhanced guidance for call coverage and borrower contact;
• Adjustment to the minimum waiting period that must elapse after a foreclosure before a borrower without
extenuating circumstances is eligible for a new mortgage loan. The adjustment is designed to increase
disincentives for borrowers to walk away from their mortgages without working with servicers to pursue
alternatives to foreclosure. Borrowers with extenuating circumstances or those who agree to foreclosure
alternatives may qualify for new mortgage loans eligible for sale to Fannie Mae in as little as two to three
years;
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