Mortgage giant Fannie Mae extended its relaxed lending and appraisal standards put in place due to COVID-19 into the new year.
The flexibilities surrounding verbal verification of employment and appraisals were originally set to expire on Dec. 31, 2020, however Fannie Mae is now pushing that back to at least Jan. 31, 2021.
“We are extending the temporary flexibilities related to verbal verifications of employment and power of attorney to loans with application dates on or before Jan. 31, 2021 from Dec. 31, 2020,” Fannie Mae said in a letter to lenders.
And in a separate letter, Fannie Mae made the same announcement for flexibilities surrounding appraisals.
Earlier this year, citing the extraordinary circumstances that the country is facing with the ongoing spread of the coronavirus, the Federal Housing Finance Agency directed the government-sponsored enterprises to ease their standards for both property appraisals and verification of employment.
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HousingWire recently spoke with CoreLogic’s Chief Appraiser Shawn Telford about re-examining traditional appraisal workflows in light of the changes brought on by COVID-19.
Presented by: CoreLogic
The relaxed lending standards allowed the GSEs to use “appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.” The issue of appraisers needing to inspect homes as part of the mortgage process became a concern as the virus continued to spread throughout the nation. The FHFA directed the GSEs to begin using both drive-by appraisals and desktop appraisals in certain circumstances to ensure that the mortgage process is not held up due to appraisal issues.
At the time, the FHFA also noted that employment verification had become increasingly more difficult as many businesses either shut down entirely or began running with skeleton crews as a result of the virus. To that end, the GSEs began accepting alternative forms of employment verification, including a recent paystub, to ensure lending can continue.
Freddie Mac does not appear to have extended its policies. HousingWire reached out to the company, and will update this story with any new developments.