Blog of the Mortgage

October 31st, 2008 7:44 AM
Good Lord..I missed this one guys.

Very sorry about the delay (it come out last week Friday).

If you work the following LP lenders:
Taylor Bean & Whitaker, Wells Fargo, HSBC and a couple (isn't Provident Funding using LP?) of others there are some serious changes upon the Horizon.
Not just little ones either.

At Franklin American we accept LP findings but will add/utilize our preferred FNMA/DO overlays if they are more conservative.
Franklin American in growing so rapidly is now selling a very large chunk directly to FNMA.

Also: I am including updates on FNMA High balance below the LP piece. Some great news: Loans up to $625,500 WILL NOT HAVE a price adjustment (unless it's an ARM or Cash-out). 
You can download the whole FNMA Announcement here:

Here's some of the Core Points from the LP announcement:

Preview of Upcoming Changes to Credit Requirements

Today, 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.
The FNMA High Balance update: 08-27
Replacing Jumbo Conforming:
There are definitional differences between the two laws that were enacted in 2008 authorizing Fannie Mae to have higher loan limits for high-cost areas. The formulas are as follows:
· Economic Stimulus Act - the higher of $417,000* or 125 percent of the area median home price-not to exceed 175 percent of $417,000, or $729,750.
· Housing and Economic Recovery Act - the higher of $417,000* or 115 percent of the area median home price-not to exceed 150 percent of $417,000, or $625,500.
*For one-unit properties in the continental United States.
Fannie Mae's general loan limits will be subject to annual increases based on a formula to be developed by the FHFA. Under HERA, the general loan limits may not decrease even if national housing prices decrease. In areas where 115 percent of the area median home price exceeds our national limits, new high-cost area loan limits will apply.

Although the 2008 general loan limits are likely to be the same in 2009, Fannie Mae will communicate the final general loan limits when they become available. The specific 2009 loan limits for each high-cost area have not been published by the FHFA yet; Fannie Mae expects to receive them in the coming weeks.

The Securities Industry and Financial Markets Association (SIFMA) announced that it will allow high-balance mortgage loans to be "good delivery" in the TBA market for MBS on a de minimis basis.
~

This is great news for us as loan officers regardless of our location.

You'll need the following links to download forms & see updates
Posted by Raoul Badde on October 31st, 2008 7:44 AMPost a Comment (0)
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