Due to the continuation of the partial government shutdown, some of the guidance previously announced in 2018-118 is being updated and additional requirements added below.
USDA
NewRez will extend rate locks on all USDA loans in the pipeline up to an expiration date of Friday, February 8, 2019 at no cost to the borrower. We will monitor the need for additional extensions at no cost in the coming days.
4506-T Tax Transcripts
As of January 7th, the IRS resumed the processing of tax transcripts. As a result of the re-opening of the IRS for the processing of transcripts as well as certain non-agency investor updates, we will resume standard product requirements for transcripts based on the following:
- Non-Agency- Loans closing on or after January 22, 2019 will require transcripts prior to closing
- Conventional, FHA, VA and USDA – Loans closing after January 26, 2019 will require transcripts prior to closing
FNMA and FHLMC Updates
FNMA has released Lender Letter LL-2019-02, and FHLMC has released Bulletin 2019-03 which add a temporary minimum reserves requirement, addresses verbal verifications of employment and recent paystubs. These requirements are temporary and will automatically terminate when the federal government resumes full operations.
For borrowers employed by the government and impacted by the shutdown, applications on or after January 16, 2019
Reserves
Reserves must be documented using the greater of:
- Two months of reserves (PITIA), or
- The minimum reserves for the Mortgage required by the AUS and the Seller’s Guide (as applicable)
Verbal Verification of Employment (VVOE)
Regardless of the application date, if a 10-day verbal verification of employment cannot be obtained, the Mortgage file must contain a written statement documenting the steps taken to meet the requirement. It must also state that the requirement could not be met as a direct result of the shutdown.
Paystubs
The most current paystub that reflects year-to-date earnings must be obtained and the lender
may also need to obtain the final 2018 year-to-date paystub to accurately calculate income. All other paystub requirements remain unchanged.
Social Security Number Validation
Social Security numbers that need to be validated with the SSA using SSA-89 may not be able to be processed during the shutdown. This verification may be made after closing but prior to delivery of the loan.
Non-Agency
Based on investor updates, a verbal verification of employment must be obtained prior to closing within 10 days of the note date. Borrowers who are impacted by the shutdown and have been furloughed must return to work prior to closing. If a verbal verification of employment is not able to be obtained prior to closing and/or a borrower who is furloughed will not be back to work prior to closing, the loan may not close.