February brought the first major regulatory changes with Fannie Mae and Freddie Mac rolling out new the ARM regulations alluded to late last year. The GSEs announced plans for the gradual elimination (and replacement) of their ARM programs, which use LIBOR as the index for setting the adjustable interest rate. We have been working quickly to update documents but expect to see more changes and will alert you as more information becomes available.
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State and Investor Compliance News
Fannie Mae. FNMA announced the publication of revised ARM notes and riders which include fallback language recommended by the Alternative Reference Rates Committee (ARRC). FNMA encourages lenders to adopt this language immediately, with a mandatory usage date of June 1, 2020 for loans closed on or after that date. Learn more.
Freddie Mac. Due to lack of demand and an increase in associated operational costs, FHLMC is retiring the eligibility for sale of mortgages originated with a biweekly payment schedule. They are subsequently removing the Biweekly Note and Rider used to document biweekly Mortgages from the Uniform Instruments web page. Learn more.
- Under recently mandated Massachusetts law (Mass. Regs. Code tit. 940, § 8.06), no broker fee, application fee, or “other fee” may be accepted by a lender or broker prior to the borrower’s receipt of “any” Federally or State required, pre-consummation disclosures. Learn more.
- In response to FNMA LL-2020-01 and FHLMC Bulletin 2020-1, Docutech has developed a “Roadmap to LIBOR Retirement” outlining the steps we will take to help clients prepare. Our estimated time for completing these changes is April 1, 2020. Learn more.
- In response to the FHLMC Bulletin 2020-1, Docutech will discontinue support for relevant programs and de-configure several documents. Learn more.
- Due to the new “fallback” language being added to the FNMA and FHLMC uniform ARM promissory notes and ARM riders, the current language in our ARM Disclosures will not be entirely accurate for loans which use the new “fallback” language. We have made updates to accommodate both the current language and the new “fallback” language. Learn more.
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