Two Very Important Updates

I have two important announcements for you!

First, I am thrilled to announce that I can offer your qualified clients a 95% LTV on conventional primary residence financing and 90% LTV on conventional second home financing. Clients must meet certain requirements but this is an option that they will not be able to find anywhere else! Call me for more details.

Also, as you know, I am committed to keeping you up-to-date with all of the changes in the mortgage industry. Recently, Fannie Mae released an announcement that may affect your clients. The following changes will be implemented on new loan files submitted on December 12th.

• The minimum credit score required for loans underwritten using DU has increased from 580 to 620.
• The maximum debt to income ratio allowed for loans underwritten using DU is lowered to 45%, with flexibilities offered up to 50% for certain loan casefiles with strong compensating factors.
• Borrowers with foreclosure completion dates of more than 5 years, but less than 7 years from the credit report date will need 10% down and a minimum credit score of 680 to purchase a principal residence; the purchase of a second home or investment property will not be permitted; and cash-out refinances will not be permitted for any occupancy types.
• If a deed-in-lieu of foreclosure is reported within 4 years of the credit report date, the loan will receive a Refer with Caution recommendation; additionally, a principal residence, purchase transaction submitted to DU with an LTV or CTLV greater than 90% on a loan that has a deed-in-foreclosure action that was completed more than 4 years, but less than 7 years from the credit report date will receive an Ineligible recommendation.
• Loan files where DU identifies a Chapter 13 bankruptcy discharged within the last 24 months, dismissed within the last 48 months or filed within the last 48 months will receive a Refer with Caution recommendation. Loan files where DU identifies a non-Chapter 13 bankruptcy that was filed, discharged or dismissed within the last 48 months will receive a Refer with Caution Recommendation.
• Two-unit owner occupied property purchases or limited cash-out refinances must have an LTV less than or equal to 80%.
• Two Unit non-owner occupied property purchases and limited cash-out refinances must have an LTV less than or equal to 75%. Two Unit non-owner occupied property cash-out refinances must have an LTV less than or equal to 70%.

If you have any clients that have not yet been pre-approved and may be challenged by any of the issues above or if you have any clients that have been approved and an LSR has been issued, but they are still looking for a home, they may be affected by these new guidelines. Please have them call me immediately. If we open a loan file for them before December 12th, we may be able to avoid these new changes. Should you have any questions, please don't hesitate to contact me.