Fannie Mae Updates Title and Closing Requirements for Multifamily Mortgages
Fannie Mae issued an update to its Multifamily Selling and Servicing Guide that modified title and closing requirements for multifamily mortgages.
The changes went into effect for loan applications received on or after May 8.
The published changes to Form 4650 include requirements for:
- acceptable title insurers
- ordering title commitments
- due diligence for the borrower’s organizational documents and the property’s title condition
- closing and funding multifamily mortgages with the title company
- the issued title policy
The major change impacting title agents is that Fannie Mae now requires title insurance underwriters to perform all funding functions—except where limited by law. This would be in jurisdictions where holding of escrows or funding loan proceeds is considered the practice of law. In these instances, Fannie Mae says a title agent may be perform the funding functions as long as it is reviewed and approved by an underwriter.
These changes are similar to escrow and settlement function requirements Freddie Mac announced last year.
