Building on an already busy day in the mortgage industry, the Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to ease appraisal and employment verification requirements for the next two months.
Fannie and Freddie will use alternatives to reduce the need for appraisers to inspect the inside of homes at a time when an increasing number of states have issued shelter-in-place directives or ordered the closing of non-essential businesses. This will allow for purchases and homes to be refinanced as the nation deals with the COVID-19 pandemic.
Additionally, lenders may now obtain employment verification by email from an employer, a recent year-to-date paystub from the borrower or a bank statement showing a recent payroll deposit. This is instead of the required verbal verification that may be hard to obtain when many businesses are closed.
“Lenders should continue to utilize sound underwriting judgment to ensure these alternatives are appropriate to the borrower’s circumstances,” the FHFA said in a statement.
These alternatives will be in place through May 17.
Previously, the FHFA announced a suspension of foreclosures and evictions for at least 60 days and offering forbearance – a delay in payments – for borrowers facing hardship due to coronavirus.