AC-028 Important Credit Updates and Announcements 10-13-22
Important Credit Updates and Announcements
Fannie Mae
Social Security Income Documentation
Social Security income documentation has been expanded by Fannie Mae via Bulletin SEL-2022-09 to allow the SSA-1099 form or the most recent signed federal tax returns or tax transcripts to serve as adequate documentation of retirement or disability benefits when the income is derived from the borrower’s own account or work record.
DU messages will be updated in a future release, but lenders may take advantage of this policy change immediately.
FLCBank accepts these changes effective immediately.
Consumer Fraud Alert Notice
Fannie Mae issued a consumer alert notice about a consumer fraud scam involving a person who claims to be a Fannie Mae employee contacting people offering to modify their mortgage and requesting money or gift cards. Fannie Mae is investigating this matter. Fannie Mae does not contact individual borrowers. If lenders, servicers, or other mortgage professionals receive inquiries from consumers, please remind them to work only with their own loan servicers. Consumers can always contact Fannie Mae’s Consumer Resource Center at 1-800-2FANNIE (1-800- 232-6643), option 4, or obtain more information on Fannie Mae’s consumer alert web page.
Freddie Mac
Income Reported on IRS Form 1099 for Services Performed
Freddie Mac is updating its policy when income is received on IRS Form 1099 for services performed and reported by the borrower on Schedule C as it occurs when the pay structure is designated as a “contractor” or “contingent worker” via Bulletin 2022-18 specifying that for this type of income. Lenders must use the requirements for either self-employed income (current requirement) or the new requirements summarized below.
FLCBank will implement the updates in accordance with this announcement effective with new loan applications received on Monday, October 17, 2022.