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19. August 2010 01:45
by mthomas
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How to comply with key elements of the Fannie Mae Loan Quality Initiative

19. August 2010 01:45 by mthomas | 0 Comments

                                                  

 

Income     MERS     Property     Employment    iDentity     Evaluation

How to comply with key elements of the Fannie Mae Loan Quality Initiative

This bulletin summarizes key Fannie Mae requirements and highlights how our verification services enable our clients to fully comply.  Mortgage participant report is coming late September 2010

 

Fannie Mae Loan Quality Initiative Requirement

IMPEDE Verification Service Features

Social Security Number

  Identify issue

  Resolve issue

 

ü  Complies

ü  Complies

 

See ID Investigation Report

See SSA Form 89 Verification Report

Validation of qualified parties

ü  Complies

See Mortgage Participant Report

Borrower Identity

ü  Complies

See ID Investigation Report

Identification of property unit number

ü  Complies

See Subject Property Report

MERS report for undisclosed liabilities

ü  Complies

See MERS SSN Lien Report

Borrower Occupancy

  Identify issues

 

ü  Complies

 

See Address History Report

 

1. Fannie Mae Borrower SSN Requirement

    Highlights from Fannie Mae FAQ:       

Data Verification Service Features

}  Lender may use existing tools from various vendors to identify potential SSN issues including:

}  Invalid format

}  SSN not issued

}  Borrower age/issue date discrepancy

}  SSN associated with deceased person

}  Our ID Investigation Report enables lenders to fully comply with this LQI requirement.

}  Additional checks which are performed include:

}  Social Issued in Last Three Years

}  Social Issued After Age 18

}  Social Reported Only with Different Name(s)

}  Social Reported Only with Different Address(es)

}  No Name or Address Reported with Social

}  Can lender use 4506-T to validate SSN?

}  No.  IRS only checks to see if borrower name matches SSN within 2 digits

}  Our ID Investigation Report enables lenders to fully comply with this LQI requirement

}  Our report does not use IRS data to validate SSN. 

}  We utilize multiple sources to see if the SSN is valid and is associated with only one name, including credit header data, SSA valid number file, SSA death master file and other borrower records. 

}  Lender requirement to resolve SSN issues:

}  If the SSN issue persists, the lender must verify the SSN and name with the SSA

}  Our SSA Form 89 Verification enables lenders to fully comply with this LQI requirement.

}  Our report enables lenders to easily submit the borrower authorization and receive back the SSA verification results in a clear, concise report.

}  Fully complies with LQI requirement. 


 

 

2. Fannie Mae Excluded Parties Requirement

    Highlights from Fannie Mae FAQ:

Data Verification Service Features

}  Requirements for Excluded Parties check:

}  Ensure that parties to the mortgage transaction are not on either of the excluded party lists

}  Ensure potential employees are not on the excluded party lists

}  Ensure that the employees of any third-party service provider are not on the excluded party lists.

}  Confirm that the status of employees and third-party service providers with respect to the excluded party lists has not changed.

}  Who must be checked against watch lists: 

}  Any person or entity with critical influence on or substantive control over any function relating to:

}  The origination or servicing of a mortgage

}  Companies or individuals involved in a mortgage transaction;

}  A person with management or supervisory responsibilities within a seller’s or servicer’s company

}  Our Mortgage Participant Report enables lenders to fully comply with this LQI requirement:

}  All names are searched against the LQI mandatory lists and the lists required under the Patriot Act:

}  GSA –EPLS

}  HUD –LDP

}  OFAC –SDN

}  The input list can include all participants on the loan including individuals and companies

}  Lenders receive both a summary report indicating the status of each participant and a detailed report if there is a full or close match. 

}  Lenders can submit lists of all employees and third party vendor companies and their employees:

}  These lists can be checked once, or scanned daily to ensure a parties status has not changed with respect to the excluded party lists. 

}  Continuous monitoring greatly simplifies the task of ensuring compliance.  Lenders need only submit a short list of unique participants with each new loan and the resulting loan level report confirms both the loan level list and the “master” list are cleared. 

}  The Mortgage Participant Report provides additional information on any appraiser submitted, not only do we check that the appraisers, reviewers and supervisors are not on the excluded list, but we check the status of their license.

}  Exclusion types:

}  Any party listed on the GSA excluded party list, regardless of exclusion type, agency, or “cause and treatment” would be considered an excluded party, and the loan would be ineligible for delivery to Fannie Mae.

}  For example, a party to the transaction who is excluded from participating in HUD multifamily programs or excluded from participating within a narrowly defined HUD geography would be considered by Fannie Mae as an excluded party and the loan would be ineligible for delivery to us. The exclusion would apply to all Fannie Mae products/transactions secured by properties in all geographies.

}  Our Mortgage Participant Report enables lenders to fully comply with this requirement.  

}  The lender is presented with a three part report, part one displays all input names and whether there was a match.

}  Part two of the report includes detailed information on a possible match.  The detailed report enables lenders to view all details from the watch list to quickly review and resolve false positives. 

}  Part three of the report includes detailed license information on any appraiser participants showing the status of their license. 

 

 

3. Fannie Mae Borrower Identity Requirement

    Highlights from Fannie Mae FAQ:       

Data Verification Service Features

}  Required ID verification elements (consistent with their requirements under the US Patriot Act) include:

}  Name

}  Address

}  TIN

}  DOB

}  Not on any government terrorist watch list (OFAC, FBI)

}  Our ID Investigation Report enables lenders to fully comply with this LQI requirement. 

}  Our report verifies identify information including:

}  Name, Address, SSN, DOB and OFAC, FinCEN (includes FBI lists) all verified against public records including:

}  Credit header data, SSA valid number file, SSA death master file, utility bills, courthouse records  and other borrower records 

}  Additional information is verified including:

}  Phone

}  Confirms all information associated with just one individual

}  Checks for suspicious/ transient address, phone

}  Checks for a USPS valid address

 

 

4. Fannie Mae Borrower Unit Number

    Highlights from Fannie Mae LQI:       

Data Verification Service Features

}  Property unit number must be included:  

}  Unit number required on mortgage note

}  Loan rejected by Fannie Mae if unit number not provided

}  Our Subject Property Report enables lenders to fully comply with this LQI requirement. 

}  Our report verifies the unit number is consistent with public records and the USPS

}  The property report verifies many other key data elements:

}  Verifies the property exists

}  Verifies current owner

}  Verifies recording date, to highlight risk of flipping

}  Verifies brief legal description

}  USPS standardized address

}  Prior ownership

}  Property characteristics

}  Assessment, current taxes

}  Lists 5 recent neighborhood sales 

 


 

 

 

5. Fannie Mae Borrower MERS Requirement

    Highlights from Fannie Mae LQI Tips:       

Data Verification Service Features

}  Lenders must take steps to proactively identify undisclosed liabilities, one part of that process can be: 

}  A Mortgage Electronic Registration System (MERS®) report can be run to determine if the borrower has undisclosed liens and/or if another mortgage is being originated

}  Our MERS SSN Lien Report enables lenders to fully comply with the check of the MERS system for liabilities:

}  The report returns the results of a searches the MERS® System using only the borrower/co-borrower’s SSN. 

}  This returns all liens active/inactive registered with MERS irrespective of the property address, where the SSN shows up against a borrower.

}  The report returns all available details on the lien, including servicer and originator information.

 

6. Fannie Mae Borrower Occupancy Requirement

    Highlights from Fannie Mae FAQ:       

Data Verification Service Features

}  Requirement to verify misrepresentations with respect to occupancy: 

}  Lender is responsible for identifying misrepresentations with respect to intent to occupy;

}  For example, in a refinance transaction of a primary residence, if the borrower indicates a current address that is different from the property address, the lender should investigate and obtain additional documentation as appropriate.

}  If the borrower purchased a primary residence and soon thereafter purchased another primary residence, the lender should obtain documentation that confirms that the home most recently purchased will be the borrower’s primary residence.

}  Our Address History Report enables lenders to easily investigate borrower related addresses:

}  The report searches billions of data records to identify addresses currently and historically associated with the borrower to help detect misrepresentations.

}  The databases include: credit header file data, utility invoice data, property data, USPS data, telephone records, demographic sources and borrower records.

}  The report provides the lender with a clear picture of addresses associated with the borrower and the duration the two can be linked. 

 

 

Fannie Mae requirements and FAQ can be found at: https://www.efanniemae.com/sf/lqi/

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