In Announcement 06-23: HOEPA Mortgages and Mortgages with Excessive Fees (12/05/06), Fannie Mae postponed the effective date of the amendments to the Fannie Mae Single-Family Selling Guide contained in Announcement 06-04 from June 1, 2006 to January 1, 2007.  Ann. 06-04 amended Part VII, Section 104.11 and Part VII, Section 104.15 of the Selling Guide.

Amended Section 104.11 addresses the maximum points and fees allowed for loans purchased or securitized by Fannie Mae:

"Fannie Mae will not purchase or securitize a mortgage if the total points and fees charged to the borrower exceed the greater of five percent of the mortgage amount or a maximum dollar amount of $1,000."

In effect, for loan amounts less than $20,000, the points and fees limitation is $1,000 (for any loan amount less than $20,000, $1,000 will always be greater than five percent of the loan amount).

Ann. 06-23 further amends Part VII, Section 104.15, which states that Fannie Mae will not purchase loans that are subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA), as follows:

"Fannie Mae will not purchase or securitize a mortgage loan if the ‘annual percentage rate' or ‘points and fees payable by the borrower' (as each such term is calculated under HOEPA) exceeds the maximum thresholds described under HOEPA.  This prohibition applies to unsecured manufactured housing loans and all types of mortgage loans that finance owner-occupied primary residence properties, including purchase money mortgage loans, refinance transaction mortgage loans, and closed-end subordinate liens.  This prohibition does not apply to mortgage loans secured by investment properties or second homes, open-end home equity lines of credit, or reverse mortgage loans."

You may read more about Ann. 06-04 in our May, 2006 and June, 2006 issues of The Compliance Wizard.  If you have any questions, please contact DocMagic's Compliance Department.