• MPF Direct
  • June 25, 2018

MPF Announcement 2018-34

MPF Direct Clarifications and Underwriting Updates

Effective Date: Refer to the Referenced Updates for Applicable Effective Dates

MPF Direct Select QM, Select 90 QM and Choice QM Updates

Assets/ Asset Type

Clarification- Effective as of the date of this Announcement

  • Added “publicly traded” to stocks. Privately held stock is ineligible.
  • Added requirement for evidence of access to retirement accounts (employer-sponsored) when used for reserves.

K-1 Income

Clarification- Effective as of the date of this Announcement

Added requirement for year-to-date income and verification of employment to be verified for borrowers with less than 25% ownership if the most recent K-1 is more than 90 days aged prior to Note date. 

Rental Income

Clarification- Effective as of the date of this Announcement

  • Added requirements for rental properties with leases that roll over: 
  • Copy of most recent lease with a roll over clause or if property is in a state where all leases roll over month-to-month at the end of the lease term.
  • Current documentation to evidence receipt of rent (copy of check or deposit into bank account).

RSU Income

Effective for loans locked on or after 6/27/2018

  • Revised the requirement for continuance based on vesting schedule from 36 months to 24 months.
  • Revised the requirement for the stock price (applied to the vesting schedule) using the 52-week low to allow the lower of the 52-week average or current stock price.
  • The 52-week average or current stock price may be based on application date rather than closing date.

Condominiums

Effective for loans locked on or after 6/05/2018.

  • Removed overlays to align with Fannie Mae limited review for attached condominiums based on Fannie Mae Announcement SEL-2018-05:
  • Projects located in Arizona, Michigan, Nevada and Texas are now eligible for limited review. Projects in Florida remain ineligible for limited review.
  • LTV/CLTV/HCLTV restrictions removed; aligned with Fannie Mae update.
  • Investment properties allowed for limited review; aligned with Fannie Mae update.
  • All other Fannie Mae condominium guidelines pertaining to SEL-2018-05 will be allowed except for manufactured condominiums and the age of condominium documents must be no older than 120 days from Note date.

MPF Direct Select 90 QM

Effective for loans locked on or after 6/05/2018.

  • Added limited review as an option for attached condominiums. 

MPF Direct Choice QM

Effective for loans locked on or after 6/05/2018.

  • Removed maximum commercial space of 35% under Non-Warrantable condominium guidelines due to Fannie now allowing commercial space up to 35%.

Ineligible Properties

Clarification- Effective as of the date of this Announcement

  • Added Tenants-in-Common projects (commonly known as TICs) as an ineligible property type.

Jumbo Program Eligibility Supplement

Clarifications- Effective as of the date of  this Announcement

Non-Borrowing Spouse

  • Added to section for non-borrowing spouse requirements. 

Notice of Right to Cancel Forms

  • Added Illinois to the states that require the proper model form be used for rescission. 

Power of Attorney (POA)

  • Added requirement for POA to comply with any state specific requirements.

Regulatory Compliance - TRID

Clarifications- Effective as of the date of  this Announcement

  • Moved Section on Accuracy of Fees from 6(C)(3)(c) to 6(C)(2)(l).  Added reference to re-disclosure through a CD.  Clarification therefore no effective date.
  • Elimination of “Black Hole”. The initial CD and/or other CD’s can be used to disclose and reset fee tolerance levels.
  • Added Seller credits on the Seller CD should match the seller credits on the borrower’s CD.
Added new section for Seller's real estate related fees must be included in Section H of the borrower's CD.

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