How will Fannie Mae audit compliance with the Code?
Compliance with the Code will be part of the lenders’ operational review. Section IV.E. of the Code allows an exception to Section IV if the Seller meets the definition of a “small bank” and Fannie Mae determines the Seller would suffer a hardship due to the provisions of Section IV of the Code. What are the requirements for this provision? An institution falls under the provisions of Section IV.E. of the Code if it is a seller/servicer of Fannie Mae, a regulated financial institution with asset values as specified in 12 U.S.C. ยง2908, and meets the requirements, if any, of the institution’s regulatory agency regarding the Interagency Appraisal and Evaluation Guidelines (SR Letter 94-55 and revisions). As with the entire Code, this provision is subject to Fannie Mae’s representations and warranties. Sellers falling under Section IV.E. are still required to comply with the remainder of the Code, including Section III, which duplicates many of the requirements of Section IV.
