Fannie, Freddie Issue New Lending Rules to Ease Delays Caused by Shutdown

Fannie, Freddie Issue New Lending Rules to Ease Delays Caused by Shutdown

government shutdown

Due to the government shutdown and the difficulties in obtaining a verification of employment, the government-sponsored enterprises Fannie Mae and Freddie Mac announced they will now accept loans from lenders without verbal verification of employment in certain circumstances. To proceed without the verbal verification, the lender must file a written statement describing the steps taken to obtain the verbal verification and be able to state that the requirement could not be met as a direct result of the shutdown.

Fannie Mae pointed out that often, verification of employment is still easily available through automated systems and third-party service providers.

The GSEs are also waiving the requirement that the paystub be dated no earlier than 30 days prior to the initial loan application date. Lenders must obtain the most current paystub that reflects year-to-date earnings and may need to obtain the final 2018 year-to-date paystub to accurately calculate income. All other paystub requirements remain unchanged.

“We appreciate the understanding and consideration that lenders extend to borrowers coping with the hardships imposed by the shutdown,” said Carlos Perez, Fannie Mae senior vice president and chief credit officer for single-family, in a letter to lenders. “We will continue to monitor the situation and may provide additional guidance if the shutdown continues.”

As the shutdown continues with no end in sight, Fannie and Freddie’s move is an indication that the agencies are taking measures to adjust to an extended interruption.

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After earning her bachelor’s degree in journalism at the University of Central Florida, Tracey set out in the real world at Florida Realtors in 1994 as a communication assistant, working her way up to editor in chief of Florida Realtor magazine. In 2004, she left the association to start her freelance writing and editing business. One of her first clients was REAL Trends, and she started working for the organization in 2005. In 2014, Tracey was promoted to editor in chief of publications for REAL Trends. She handles the writing and editing of all REAL Trends publications and marketing materials, including LORE Magazine, the REAL Trends newsletter and the blog. She is also the primary podcast interviewer where she conducts interviews with top real estate industry leaders and affiliated industry leaders. Tracey is married with two children.

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