As part of its response to the COVID-19 crisis, on March 27, 2020, HUD issued Mortgagee Letter 2020-5, addressing issues lenders are facing during the crisis. The letter is effective immediately, and will remain in effect for cases through May 17, 2020.
The letter addresses changes to the requirements for re-verification of employment, where HUD “is allowing flexibilities related to the Mortgagee’s process of completing re-verification of employment, which includes verbal verification of employment.”
The letter also addresses appraisal protocols:
- “Most Single Family forward and HECM for Purchase transactions may utilize an optional Exterior-Only or Desktop-Only Appraisal inspection scope of work.”
- “Traditional HECM, HECM-to-HECM refinances, Rate and Term Refinances and Simple Refinances of properties may utilize an optional Exterior-Only inspection scope of work.”
- “All appraisals made in connection with the servicing of FHA’s forward or reverse mortgage portfolios may utilize either the Exterior-Only or Desktop-Only Appraisal inspection scope of work.”
- “No changes are made to Streamline Refinances, which do not require appraisals or to the appraisal requirements for FHA’s CashOut refinance, 203(k), and certain purchase transactions.”
ML 2020-5 is available here.