In showing it’s hand in controlling Fannie Mae, new rules were announced this week that require EVERYONE involved in a Fannie Mae financed real estate transaction to be checked against a national database of “Excluded Parties”. If any party appears on the list, the loan is not eligible for a Fannie Mae loan. The new regulations take effect June 1st.
Who is everyone? The borrowers, Loan Officers, Underwriter, Appraiser, Listing Agent, Listing Agent’s company, Selling Agent, Selling Agent’s company, Escrow Officer, Escrow company, Title Officer and Title Company.
The database contains roughly 3,700 pages of names of individuals that are anything from suspected terrorists to those convicted of drug offenses. The list also includes people who have been convicted of violating federal procurement laws, housing discrimination, and wage violations on Federal projects. To see if you or a potential client is on the list, here’s the website: https://www.epls.gov.
No one wants to aid a terrorist, but the mortgage market has long been private enterprise at its best. Fannie Mae and Freddie Mac used to be private government sponsored entities. This new requirement demonstrates that residential mortgages sold on the secondary market (90% of all mortgages) are now controlled by the Federal government.
Wednesday, June 2, 2010
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