As previously announced, Fannie Mae and Freddie Mac jointly released a LIBOR Transition Playbook and FAQs providing guidance and timelines regarding the transition from the LIBOR to Secured Overnight Financing Rate (“SOFR”) index. New Fannie Mae and Freddie Mac SOFR products use the 30-day Average SOFR index and a 6-month reset period.
Fannie Mae and Freddie Mac are following different timelines for when these loans will begin to be accepted. Fannie Mae will begin accepting deliveries of SOFR ARM products August 3, 2020. Freddie Mac will begin accepting these on November 16, 2020, and December 1, 2020 is the earliest date that SOFR ARM guarantor contracts may settle.
DocMagic is adding new generic loan programs to support these new SOFR index products. The following new DocMagic standard loan programs use the 30-day Average SOFR index:
|
DocMagic Plan ID |
Description |
|
36SOFR |
3/6 Mo 30-day Avg SOFR 2/1/5 Caps |
|
56SOFR |
5/6 Mo 30-day Avg SOFR 2/1/5 Caps |
|
76SOFR |
7/6 Mo 30-day Avg SOFR 5/1/5 Caps |
|
106SOFR |
10/6 Mo 30-day Avg SOFR 5/1/5 Caps |
|
TX36S |
FHLMC TX Home Equity 3/6 SOFR 2/1/5 Caps |
|
TX56S |
TX Home Equity 5/6 SOFR 2/1/5 Caps |
|
TX76S |
TX Home Equity 7/6 SOFR 5/1/5 Caps |
|
TX106S |
TX Home Equity 10/6 SOFR 5/1/5 Caps |
|
HR56S |
FNMA HomeReady 5/6 Mo 30-day Avg SOFR 2/1/5 Caps |
|
HR76S |
FNMA HomeReady 7/6 Mo 30-day Avg SOFR 5/1/5 Caps |
|
HR106S |
FNMA HomeReady 10/6 Mo 30-day Avg SOFR 5/1/5 Caps |
|
HP56S |
FHLMC Home Possible 5/6 Mo 30-day Avg SOFR 2/1/5 Caps |
|
HP76S |
FHLMC Home Possible 7/6 Mo 30-day Avg SOFR 5/1/5 Caps |
|
HP106S |
FHLMC Home Possible 10/6 Mo 30-day Avg SOFR 5/1/5 Caps |
DocMagic’s new programs include the following new SOFR notes and riders:
- Form 3441: Adjustable-Rate Note 30-day Average SOFR
- Form 3141: Adjustable-Rate Rider 30-day Average SOFR
- Form 3442: Fixed/Adjustable-Rate Note 30-day Average SOFR
- Form 3142: Fixed/Adjustable-Rate Rider 30-day Average SOFR
Generic multistate and state-specific forms will also reflect the new SOFR index as applicable.
The plans are now available in DocMagic’s testing environment and will be available in production on July 16, 2020.
To view DocMagic’s previous articles regarding the transition to SOFR, click here and here.
If you have any questions, please contact DocMagic’s Compliance Department.
