MPF Policy Updates Related to COVID-19: Are You Perpared?
MPF Policy Updates Related to COVID-19: Are You Perpared?
On May 6, 2020 MPF released a policy update and clarifications to previous policies in place during the COVID-19 epidemic. Application dates through June 30, 2020 (previously May 17, 2020) are now subject to the temporary policy updates. The following MPF policy updates were extended for applications dated on or before June 30, 2020:
- Verbal Verification of Employment
- Verification of Self Employment
- Continuity of Income
- Age of Documentation
- Market-based Assets
- Powers of Attorney
- Appraisals (desktop, exterior only, new construction loans & appraisal waivers)
In the May 6th policy updates, MPF also added two new policies/clarifications related to unemployment benefits qualifying as income and furloughed borrowers. Under the MPF Traditional Selling Guide Section 5.16.20, unemployment benefits can be used to qualify a borrower if this income has been documented for 2 years and is expected to continue. Although many individuals are eligible for unemployment under the CARES Act, this is short-term in nature and is not a reliable or predictable source of income for borrowers. Originators should not use this short-term income within their income calculation for underwriting of a loan.
Additionally, there has been an increase in furloughed employees due to COVID-19. Furloughed employees are ineligible for financing until they return to work and can provide evidence of a stable and reliable flow of employment.
Ensure your financial institution is up to date on all MPF policy updates and clarifications throughout the COVID-19 pandemic.
Article compiled by Natalie Reifsneider – contact her at nreifsneider@fosaudit.com for additional information.
MPF Policy Updates Related to COVID-19: Are You Perpared? | Natalie Reifsneider