We are announcing that for 2009, we are maintaining the base conforming loan limits at the 2008 levels and increasing the conforming loan limits for certain high-cost areas based on the Federal Housing Finance Agency’s (FHFA) announcement on
November 7, 2008.
Base Conforming Loan Limits
The base conforming loan limits for 2009 will remain at the following current levels:
No. of Units Maximum Base Conforming Loan Limits for properties NOT located in Alaska, Hawaii, Guam & U.S. Virgin Islands Maximum Base Conforming Loan Limits for properties in Alaska, Hawaii, Guam & U.S. Virgin Islands
1 $417,000 $ 625,500
2 $533,850 $ 800,775
3 $645,300 $ 967,950
4 $801,950 $1,202,925
High-Cost Area Loan Limits
Last month we announced our requirements for the new higher loan limits in certain high-cost areas as set forth in the Housing and Economic Recovery Act of 2008 (HERA).
HERA raises the conforming loan limits in certain high-cost areas (where 115 percent of the area median house price exceeds the applicable base loan limit) to the lesser of 115 percent of the area median home price or 150 percent of the base conforming loan limits. We have termed mortgages that will be purchased under these higher limits as “super conforming” mortgages. Since the base conforming loan limit for one-unit properties remains at $417,000, the maximum conforming loan limit in designated high-cost areas is $625,500 for one-unit properties.
The maximum loan limits in designated high-cost areas for properties located in Alaska, Guam, Hawaii, and the U.S. Virgin Islands are higher than the base of $625,500 for one-unit properties.
In all instances, the loan limits for 2- to 4-unit properties are also higher.
For purposes of determining these high-cost areas, FHFA used a nationwide set of county median home prices estimated by the Federal Housing Administration. Visit the FHFA site for details on the 2009 High-Cost Area Loan Limits and 2009 Loan Limits for All Counties.
Super Conforming Mortgages
All Seller/Servicers are eligible to deliver super conforming mortgages provided they comply with Chapter L33 of the Single-Family Seller/Servicer Guide. Super conforming mortgages with note dates on and after October 1, 2008, are eligible for Freddie Mac settlements on and after January 2, 2009.
Effective January 2, 2009, we will purchase super conforming mortgages up to the following loan limits.
No. of Units 2009 Maximum Original Loan Amount for Super Conforming Mortgages*
1 $ 625,500
2 $ 800,775
3 $ 967,950
4 $1,202,925
*These are the maximum potential loan limits for designated high-cost areas. Actual loan limits for specific high-cost areas may be lower. In addition, the super conforming limits will be higher in certain high-cost areas in Alaska, Guam, Hawaii and the U.S. Virgin Islands.
Specific maximum LTV/TLTV/HTLTV limits are based on loan purpose, number of units, and occupancy. For designated high-cost areas where the maximum loan limit exceeds $625,500 for a one-unit property mortgage, the maximum LTV/TLTV/HTLTV ratio is 80 percent. Additional details will be communicated in an upcoming Single-Family Seller/Servicer Guide Bulletin. For more information visit our Super Conforming Mortgages Web page.
Operational Impacts
Because the 2009 base conforming loan limits are unchanged from 2008, you can deliver mortgages that are within the base conforming loan limits, with no changes to your operational procedures or processes, including Loan Prospector® assessment and commitment and delivery.
We are in the process of updating Loan Prospector and the selling system to accommodate super conforming mortgages and will provide you additional details about those changes soon.
FHLMC and FNMA loan limits for next year
1 unit 2 unit 3 unit 4 unit
Beaver County 99999 UT $417,000 $533,850 $645,300 $801,950
Box Elder County 14940 UT $417,000 $533,850 $645,300 $801,950
Cache County 30860 UT $417,000 $533,850 $645,300 $801,950
Carbon County 39220 UT $417,000 $533,850 $645,300 $801,950
Daggett County 99999 UT $417,000 $533,850 $645,300 $801,950
Davis County 36260 UT $417,000 $533,850 $645,300 $801,950
Duchesne County 99999 UT $417,000 $533,850 $645,300 $801,950
Emery County 99999 UT $417,000 $533,850 $645,300 $801,950
Garfield County 99999 UT $417,000 $533,850 $645,300 $801,950
Grand County 99999 UT $417,000 $533,850 $645,300 $801,950
Iron County 16260 UT $417,000 $533,850 $645,300 $801,950
Juab County 39340 UT $417,000 $533,850 $645,300 $801,950
Kane County 99999 UT $417,000 $533,850 $645,300 $801,950
Millard County 99999 UT $417,000 $533,850 $645,300 $801,950
Morgan County 36260 UT $417,000 $533,850 $645,300 $801,950
Piute County 99999 UT $417,000 $533,850 $645,300 $801,950
Rich County 99999 UT $417,000 $533,850 $645,300 $801,950
Salt Lake County 41620 UT $600,300 $768,500 $928,950 $1,154,450
San Juan County 99999 UT $417,000 $533,850 $645,300 $801,950
Sanpete County 99999 UT $417,000 $533,850 $645,300 $801,950
Sevier County 99999 UT $417,000 $533,850 $645,300 $801,950
Summit County 41620 UT $600,300 $768,500 $928,950 $1,154,450
Tooele County 41620 UT $600,300 $768,500 $928,950 $1,154,450
Uintah County 46860 UT $417,000 $533,850 $645,300 $801,950
Utah County 39340 UT $417,000 $533,850 $645,300 $801,950
Wasatch County 25720 UT $417,000 $533,850 $645,300 $801,950
Washington County 41100 UT $417,000 $533,850 $645,300 $801,950
Wayne County 99999 UT $417,000 $533,850 $645,300 $801,950
Weber County 36260 UT $417,000 $533,850 $645,300 $801,950
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
Tuesday, November 11, 2008
Wednesday, October 29, 2008
Calculating Income for Mortgage Lending
Processing Tip
The credit freeze has made underwriting more particular than ever. Here are a few pointers to help you get your loan approved the first time. Loans that loose their Accept status when they are underwritten usually loose this because the underwriter calculates the income differently than you did. Many times if the underwriter knew how you calculated the borrowers income they would accept it. If I was processing a loan I would always include the calculation of income in my loan file. Make sure you know the guide lines regarding the income calculation. If you want an exception from the guidelines be sure and state the reason you feel the borrower deserves this exception. Example: overtime usually always requires a two year history. Your borrower has only been on the current job 12 months. However they had overtime in the previous job. In this scenario include a VOE of both jobs documenting a two year history. Don’t assume because an employer requires over time that they underwriter will accept that as a reason to have less than two years.
I also find this IRS web site in determining what income is tax deductable or how it should be reported to be helpful - IRS Frequently Asked Questions . Attached is an income worksheet that you could use to calculate income and include in your loan file
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
The credit freeze has made underwriting more particular than ever. Here are a few pointers to help you get your loan approved the first time. Loans that loose their Accept status when they are underwritten usually loose this because the underwriter calculates the income differently than you did. Many times if the underwriter knew how you calculated the borrowers income they would accept it. If I was processing a loan I would always include the calculation of income in my loan file. Make sure you know the guide lines regarding the income calculation. If you want an exception from the guidelines be sure and state the reason you feel the borrower deserves this exception. Example: overtime usually always requires a two year history. Your borrower has only been on the current job 12 months. However they had overtime in the previous job. In this scenario include a VOE of both jobs documenting a two year history. Don’t assume because an employer requires over time that they underwriter will accept that as a reason to have less than two years.
I also find this IRS web site in determining what income is tax deductable or how it should be reported to be helpful - IRS Frequently Asked Questions . Attached is an income worksheet that you could use to calculate income and include in your loan file
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
Friday, October 17, 2008
Freddie Buelltin Oct 3rd, 2008 no more stated income
Freddie Mac Announced …Today's News ... This Single-Family Advisory e-mail provides you with important information on a series of upcoming changes to our pricing and credit requirements.
First, we are providing a preview of new changes that we will finalize in an early November Single-Family Seller/Servicer Guide (Guide) Bulletin and will make effective for Freddie Mac settlements on and after February 2, 2009. These changes strengthen underwriting standards for borrower eligibility and provide additional safeguards against layered risk to support sustainable homeownership opportunities, including:
Eliminating the purchase of mortgages originated with stated income and/or stated assets
Establishing minimum Indicator Scores and maximum debt-to-income ratio requirements for most mortgages we purchase—whether manually underwritten or assessed through an automated underwriting system
Second, we are publishing a Guide Bulletin today that provides detailed requirements for the changes we previewed in our October 3 Single-Family Advisory e-mail. These changes are effective for Freddie Mac settlements on and after January 2, 2009, and reflect our focus on providing pricing and credit terms that are prudent and largely applicable in all market conditions.
Finally, today's Guide Bulletin also includes additional and not previously announced updates to our credit requirements for borrowers with significant derogatory credit information, and other credit changes for certain mortgages with higher risk characteristics. These changes are also effective for Freddie Mac settlements on and after January 2, 2009.
In aggregate, the changes we are previewing in this e-mail and those we have published in today's Guide Bulletin address underwriting standards that promote long-term homeownership for borrowers and liquidity for Sellers, while maintaining a sustainable secondary market business model.
Preview of Upcoming Changes to Credit RequirementsToday, we are previewing the following changes to our credit requirements that will be effective for Freddie Mac settlements on and after February 2, 2009. We will finalize these credit changes in an early November Guide Bulletin where we will:
Eliminate purchases of all mortgages originated with stated income and/or stated assets, including borrower selected programs, lender-branded and marketed programs, and system-selected programs such as Loan Prospector® Accept Plus.
Establish a maximum debt-to-income ratio of 45 percent for all mortgages we purchase, except for Streamlined Refinance Mortgages.
Revise requirements for minimum Indicator Scores by:
Establishing minimum Indicator Score requirements for manually underwritten mortgages secured by 1-unit primary residences as follows (Home Possible® Mortgages excluded):
620 for LTV/TLTV/HTLTV ratios less than or equal to 75 percent.
660 for LTV/TLTV/HTLTV ratios greater than 75 percent.
Establishing a minimum Indicator Score of 620 for all mortgages unless otherwise specified for a particular mortgage product in our Guide. Loan Prospector A-minus mortgages are also excluded from this requirement.
Revising minimum Indicator Scores for Home Possible Mortgages and lender-branded affordable mortgages. Details for this change will be provided in the early November Guide Bulletin.
If the borrower does not have a usable credit score, Sellers must underwrite the mortgage according to the requirements in Guide Chapter 37.
Eliminate purchases of 40-year fixed-rate mortgages except for Home Possible Mortgages and other lender-branded affordable products secured by 1-unit properties.
Reduce the maximum LTV ratio requirements for Home Possible Mortgages and other lender-branded affordable mortgage products secured by 1-unit primary residences to:
97 percent for mortgages assessed by Loan Prospector and other approved automated underwriting systems.
95 percent for manually underwritten mortgages.
We will continue to allow TLTV ratios greater than 97 percent and up to 105 percent for eligible Home Possible Mortgages and lender-branded affordable mortgages if the subordinate financing is an Affordable Second® and the borrower has a minimum Indicator Score of 700.
Delivery Fee Rate and Credit Requirements in Today's Bulletin
With today's Guide Bulletin, we are providing final requirements for the delivery fee rate increases and credit changes we previewed in early October and are announcing several additional changes to our credit requirements. It is important that you review today's Guide Bulletin in detail to prepare for these changes, effective for mortgages with Freddie Mac settlements on and after January 2, 2009.
Credit and Pricing Requirements Previewed on October 3:
Eliminate the previously announced 25 basis point increase to the Market Condition delivery fee, scheduled to go into effect on November 7, 2008.
Provide detailed pricing and credit requirements for mortgages with higher conforming loan limits in certain high-cost areas, which we've termed “super conforming” mortgages.
Update delivery fee structures and fee rates for Initial Interest® Mortgages and mortgages with secondary financing, and revise the Number of Units delivery fees to better align our pricing with the risks inherent in these products.
Change requirements for certain mortgages, including, among others, manually underwritten mortgages, Streamlined Refinance Mortgages, mortgages sold to us more than 120 days after the note date, and mortgages secured by investment properties, 2-unit properties, and second homes.
Additional Modifications to Super Conforming Mortgage Requirements in Today's Guide Bulletin:
Reduce maximum LTV/TLTV/HTLTV ratio requirements for certain super conforming mortgages. View these updates, as well as other modifications to super conforming mortgage requirements on our Web site.
Updates to Borrower Credit Reputation Requirements in Today's Guide Bulletin:
Allow authorized user tradelines to be included in determining a borrower's credit reputation only under certain circumstances as detailed in today's Guide Bulletin.
Require that a borrower's derogatory credit information be considered significant if there is a short payoff related to a delinquent mortgage obligation within the last seven years.
Extend the required recovery period needed to re-establish an acceptable credit reputation for prior foreclosures and multiple bankruptcies, whether for extenuating circumstances or financial mismanagement.
Eliminate the requirement to calculate or evaluate the debt-to-housing gap ratio when determining a borrower's capacity to meet monthly obligations.
Additional Revisions to Credit Requirements in Today's Guide Bulletin:
Add new requirements for the purchase of a new primary residence when the sale of the existing primary residence has not yet closed or the existing primary residence is being converted to a second home or investment property.
Eliminate purchases of seasoned mortgages through our flow sales paths.
Eliminate purchases of Seasoned Mortgages for Newly Constructed Homes products through our flow sales paths. For these mortgages to be eligible for delivery through our flow sales paths, the settlement date or delivery date, as applicable, must be on or before the last day of the 18-month credit/construction/settlement period.
Reaffirm that refinance mortgages must be documented with a new note and new security instrument or with a new note and a modification of the existing security instrument. If there is no new security instrument, the refinance mortgage must be delivered to Freddie Mac as a Seller-owned Modified Mortgage.
Eliminate purchases of Alternative Stated Income Mortgages, and remove references to these mortgages from the Guide as a precursor to changes across all stated income and/or stated asset products, which we previewed above and will finalize in an early November Guide Bulletin.
Updates to Delivery Requirements in Today's Guide Bulletin:
Introduce a new Special Characteristic Code D99 that exempts Freddie Mac-owned no cash-out refinance mortgages secured by second homes and 2-unit primary residences when the new mortgage is not paying off subordinate financing from the LTV/TLTV/HTLTV ratio reductions included in today's Guide Bulletin.
Pre-Funding Best Practices in Today's Guide Bulletin:
Recommend the use of Home Value Calibrator®, a tool that Freddie Mac uses in its quality control process, or a similar tool, to help assess the likelihood that an appraised value is inflated.
Get More InformationFor additional details on these changes:
Read our October 17 Guide Bulletin.
See a summary of all of our recent pricing and credit changes.
Review our pricing and credit requirements for super conforming mortgages, including recent modifications to these requirements
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
First, we are providing a preview of new changes that we will finalize in an early November Single-Family Seller/Servicer Guide (Guide) Bulletin and will make effective for Freddie Mac settlements on and after February 2, 2009. These changes strengthen underwriting standards for borrower eligibility and provide additional safeguards against layered risk to support sustainable homeownership opportunities, including:
Eliminating the purchase of mortgages originated with stated income and/or stated assets
Establishing minimum Indicator Scores and maximum debt-to-income ratio requirements for most mortgages we purchase—whether manually underwritten or assessed through an automated underwriting system
Second, we are publishing a Guide Bulletin today that provides detailed requirements for the changes we previewed in our October 3 Single-Family Advisory e-mail. These changes are effective for Freddie Mac settlements on and after January 2, 2009, and reflect our focus on providing pricing and credit terms that are prudent and largely applicable in all market conditions.
Finally, today's Guide Bulletin also includes additional and not previously announced updates to our credit requirements for borrowers with significant derogatory credit information, and other credit changes for certain mortgages with higher risk characteristics. These changes are also effective for Freddie Mac settlements on and after January 2, 2009.
In aggregate, the changes we are previewing in this e-mail and those we have published in today's Guide Bulletin address underwriting standards that promote long-term homeownership for borrowers and liquidity for Sellers, while maintaining a sustainable secondary market business model.
Preview of Upcoming Changes to Credit RequirementsToday, we are previewing the following changes to our credit requirements that will be effective for Freddie Mac settlements on and after February 2, 2009. We will finalize these credit changes in an early November Guide Bulletin where we will:
Eliminate purchases of all mortgages originated with stated income and/or stated assets, including borrower selected programs, lender-branded and marketed programs, and system-selected programs such as Loan Prospector® Accept Plus.
Establish a maximum debt-to-income ratio of 45 percent for all mortgages we purchase, except for Streamlined Refinance Mortgages.
Revise requirements for minimum Indicator Scores by:
Establishing minimum Indicator Score requirements for manually underwritten mortgages secured by 1-unit primary residences as follows (Home Possible® Mortgages excluded):
620 for LTV/TLTV/HTLTV ratios less than or equal to 75 percent.
660 for LTV/TLTV/HTLTV ratios greater than 75 percent.
Establishing a minimum Indicator Score of 620 for all mortgages unless otherwise specified for a particular mortgage product in our Guide. Loan Prospector A-minus mortgages are also excluded from this requirement.
Revising minimum Indicator Scores for Home Possible Mortgages and lender-branded affordable mortgages. Details for this change will be provided in the early November Guide Bulletin.
If the borrower does not have a usable credit score, Sellers must underwrite the mortgage according to the requirements in Guide Chapter 37.
Eliminate purchases of 40-year fixed-rate mortgages except for Home Possible Mortgages and other lender-branded affordable products secured by 1-unit properties.
Reduce the maximum LTV ratio requirements for Home Possible Mortgages and other lender-branded affordable mortgage products secured by 1-unit primary residences to:
97 percent for mortgages assessed by Loan Prospector and other approved automated underwriting systems.
95 percent for manually underwritten mortgages.
We will continue to allow TLTV ratios greater than 97 percent and up to 105 percent for eligible Home Possible Mortgages and lender-branded affordable mortgages if the subordinate financing is an Affordable Second® and the borrower has a minimum Indicator Score of 700.
Delivery Fee Rate and Credit Requirements in Today's Bulletin
With today's Guide Bulletin, we are providing final requirements for the delivery fee rate increases and credit changes we previewed in early October and are announcing several additional changes to our credit requirements. It is important that you review today's Guide Bulletin in detail to prepare for these changes, effective for mortgages with Freddie Mac settlements on and after January 2, 2009.
Credit and Pricing Requirements Previewed on October 3:
Eliminate the previously announced 25 basis point increase to the Market Condition delivery fee, scheduled to go into effect on November 7, 2008.
Provide detailed pricing and credit requirements for mortgages with higher conforming loan limits in certain high-cost areas, which we've termed “super conforming” mortgages.
Update delivery fee structures and fee rates for Initial Interest® Mortgages and mortgages with secondary financing, and revise the Number of Units delivery fees to better align our pricing with the risks inherent in these products.
Change requirements for certain mortgages, including, among others, manually underwritten mortgages, Streamlined Refinance Mortgages, mortgages sold to us more than 120 days after the note date, and mortgages secured by investment properties, 2-unit properties, and second homes.
Additional Modifications to Super Conforming Mortgage Requirements in Today's Guide Bulletin:
Reduce maximum LTV/TLTV/HTLTV ratio requirements for certain super conforming mortgages. View these updates, as well as other modifications to super conforming mortgage requirements on our Web site.
Updates to Borrower Credit Reputation Requirements in Today's Guide Bulletin:
Allow authorized user tradelines to be included in determining a borrower's credit reputation only under certain circumstances as detailed in today's Guide Bulletin.
Require that a borrower's derogatory credit information be considered significant if there is a short payoff related to a delinquent mortgage obligation within the last seven years.
Extend the required recovery period needed to re-establish an acceptable credit reputation for prior foreclosures and multiple bankruptcies, whether for extenuating circumstances or financial mismanagement.
Eliminate the requirement to calculate or evaluate the debt-to-housing gap ratio when determining a borrower's capacity to meet monthly obligations.
Additional Revisions to Credit Requirements in Today's Guide Bulletin:
Add new requirements for the purchase of a new primary residence when the sale of the existing primary residence has not yet closed or the existing primary residence is being converted to a second home or investment property.
Eliminate purchases of seasoned mortgages through our flow sales paths.
Eliminate purchases of Seasoned Mortgages for Newly Constructed Homes products through our flow sales paths. For these mortgages to be eligible for delivery through our flow sales paths, the settlement date or delivery date, as applicable, must be on or before the last day of the 18-month credit/construction/settlement period.
Reaffirm that refinance mortgages must be documented with a new note and new security instrument or with a new note and a modification of the existing security instrument. If there is no new security instrument, the refinance mortgage must be delivered to Freddie Mac as a Seller-owned Modified Mortgage.
Eliminate purchases of Alternative Stated Income Mortgages, and remove references to these mortgages from the Guide as a precursor to changes across all stated income and/or stated asset products, which we previewed above and will finalize in an early November Guide Bulletin.
Updates to Delivery Requirements in Today's Guide Bulletin:
Introduce a new Special Characteristic Code D99 that exempts Freddie Mac-owned no cash-out refinance mortgages secured by second homes and 2-unit primary residences when the new mortgage is not paying off subordinate financing from the LTV/TLTV/HTLTV ratio reductions included in today's Guide Bulletin.
Pre-Funding Best Practices in Today's Guide Bulletin:
Recommend the use of Home Value Calibrator®, a tool that Freddie Mac uses in its quality control process, or a similar tool, to help assess the likelihood that an appraised value is inflated.
Get More InformationFor additional details on these changes:
Read our October 17 Guide Bulletin.
See a summary of all of our recent pricing and credit changes.
Review our pricing and credit requirements for super conforming mortgages, including recent modifications to these requirements
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
Fannie Mae issues Permanent High Cost Area Loan Limit Bulletin
Fannie Mae issues new bulletin Permanent High Cost Area Loan Limits Eligibility Matrix Desktop Underwriter
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
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
Monday, September 29, 2008
Use the tools avilable
Understanding DU and LP can make a difference whether you get a loan approved. Please notice the links on my blog under "Conventional Lending and DU Tips" on left hand side "Helpful web sites" . There are a number of tools available. Take time to get familiar with this links and how they can help you.
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
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
Friday, June 20, 2008
DU 7. Tip
Here are two more items I notice that have changed in regards to DU 7
1-The level of risk associated with each amortization type is as follows, starting with those loan types representing the least amount of risk:
• Fully amortizing fixed-rate mortgages;
• Fully amortizing five-year, seven-year, and ten-year adjustable-rate mortgages;
• Six-month, one-year, and three-year ARMs as well as fixed-rate interest-only mortgages; and
• Interest-only ARMs and balloon
2. DU will continue to use the amortization term of the loan in its risk assessment for fixed rate mortgages, but will no longer look at the loan term in combination with LTV.\
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
1-The level of risk associated with each amortization type is as follows, starting with those loan types representing the least amount of risk:
• Fully amortizing fixed-rate mortgages;
• Fully amortizing five-year, seven-year, and ten-year adjustable-rate mortgages;
• Six-month, one-year, and three-year ARMs as well as fixed-rate interest-only mortgages; and
• Interest-only ARMs and balloon
2. DU will continue to use the amortization term of the loan in its risk assessment for fixed rate mortgages, but will no longer look at the loan term in combination with LTV.\
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
Thursday, June 19, 2008
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
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
Subscribe to:
Posts (Atom)
