DU 7 Tips

Fannie Mae News (continued)
DU 7 has made changes each day I have been pointing out two things I noticed different from DU 5 version to the current.

1- Purchase transactions continue to represent less risk than refinance transactions. When evaluating refinance transactions, a limited cash-out refinance transaction represents less risk than a cash-out refinance transaction, and lower LTV/CLTV refinance transactions will be viewed as representing less risk than higher LTV/CLTV refinance transactions. DU will no longer analyze the UPB increase when assessing the risk of a refinance transaction, but will use the purpose of refinance entered on the loan application, when the loan purpose is refinance. On construction-to-permanent transactions, DU will continue to determine the purpose of refinance based on the amount of cash theborrower is receiving at closing.
2-DU will continue to use the LTV and CLTV in its risk assessment; however, the existence of mortgage insurance will no longer be considered a mitigating factor

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.naultfhatips.blogspot.com or www.mtgview.blogspot.com