Fannie Mae Discusses DUS Legal Issues
Fannie Mae hosted a DUS Legal Issues Forum on March 6, 2009 to discuss the state of the multifamily financing market, as well as new developments in the Fannie Mae multifamily program. During the course of the forum, Fannie Mae highlighted the following major points:
- Revitalizing the MBS execution is one of Fannie Mae’s major goals for 2009. Fannie Mae has a clear preference for purchasing MBS loans and plans to expand the number of eligible MBS execution products that it will offer in the future. Future MBS executions are likely to include structured ARM products, extended term products, products for fixed rate credit facilities, and products with additional prepayment options. As more emphasis is placed upon MBS executions, it is imperative that Lenders focus on possible special disclosures issues. More information on special disclosures is provided in the DUS Guide under Lender Memo 09-02: MBS Special Disclosure and DUS Guide Update 03-01.
- Fannie Mae is preparing to create new products for “defensive” refinances. In addition to continuing to provide the “Choice Refinance” product for loans that have performed well, Fannie Mae plans to create more options for in-place loans that are unable to meet certain minimum underwriting requirements.
- Fannie Mae is willing to consider loans with Delaware Statutory Trust (“DST”) borrowers. Fannie Mae has expressed a preference for DST borrowers over TIC borrowers. Loans with DST borrower structures will be treated as Pre-Review Mortgage Loans. (Please note: Troutman Sanders has closed recent DST transactions with Fannie Mae.)
For more information regarding any of these items or any agency lending needs, please contact a member of the Multifamily Housing Group of Troutman Sanders LLP.