In making this determination of significance, Fannie Mae will rely upon a DU simulator. That the loan would have been eligible for purchase, but under different terms. That the loan would not have been eligible for sale to Fannie Mae under the terms of the lender’s contract with Fannie Mae in effect at the time of delivery of the loan, or Each loan in the pattern must meet all the requirements above in order for Fannie Mae to enforce a remedy pursuant to this life-of-loan exclusion.Ī misrepresentation (as defined above) is “significant” if Fannie Mae, using true and accurate information, determines Note: In identifying three or more loans to constitute the pattern, Fannie Mae may count loans that have obtained relief under the framework and loans that have not obtained such relief. If a third party is the common party, involves the same individual or entity and If the selling lender is the common party, involves the same individual or, Involve three or more mortgage loans delivered to Fannie Mae by the same lender īe made pursuant to a common pattern of activity in connection with loan origination or sale, based on information in the loan file or other facts or circumstances that existed at the time of delivery of the loan to Fannie Mae, which involves at least one party common to all the loans Fannie Mae will only assert a remedy for a misrepresentation involving a loan that has qualified for relief under the framework if all of the following criteria have been met. Parties to the loan transaction include, but are not limited to, borrowers, property sellers, builders, real estate agents, lenders including the selling lender, mortgage brokers, loan officers, originators, appraisers, appraisal companies, closing agents, title companies, or other third-party vendors performing origination services. In connection with a mortgage loan that has qualified for relief under the framework, “misrepresentations” means any misstatements, misrepresentations, or omissions by any party to the loan transaction made with or without the lender’s knowledge that pertain to the borrower, the property, or the project as set forth in Subparts B1 through B5 of the Selling Guide. Life-of-Loan Exclusions: Misstatements, Misrepresentations, and OmissionsĮven if a mortgage loan has met the requirements for enforcement relief set forth in A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility, the lender remains responsible throughout the life of the loan for representations and warranties related to misstatements, misrepresentations, and omissions as set forth below. Was sold on a participation basis when the lender retains a minimum 10% interest.Īn example of a breach of Charter Act requirements is a mortgage loan secured by a property that consists of a principal residence and a dairy farm, resulting in the property having significant nonresidential use. Was sold with recourse for such period and under such circumstances as Fannie Mae may require or ![]() Has mortgage insurance on the portion of the mortgage in excess of 80% of the property's value provided by a mortgage insurer approved under Fannie Mae’s Qualified Mortgage Insurer Approval Requirements ![]() Have a loan-to-value (LTV) ratio of 80% or less of the security property’s value at the time Fannie Mae acquires the loan or, if the mortgage has an LTV ratio in excess of 80%, the mortgage Have an original principal balance not greater than the applicable maximum loan limit in effect at the time of Fannie Mae’s acquisition and Properties that are not residential include, but are not limited to, vacant land, property primarily used for agricultural or commercial purposes, or units located in condo or co-op hotels īe secured by a property located within the 50 states of the United States of America, the District of Columbia, or any territory or possession of the United States īe secured by a property with four or fewer units, unless sold through Fannie Mae’s multifamily mortgage business In accordance with its Charter Act requirements, a mortgage loan (or any participation interest therein) must meet all of the following requirements to be eligible for sale to Fannie Mae:īe secured by property that is residential in nature. The lender is responsible for representations and warranties for the life of the loan for compliance with Fannie Mae's Charter Act. ![]() Life-of-Loan Exclusions: Fannie Mae Charter Act Matters
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