Fannie Mae "Loan Quality Initiative" begins June 1, 2010. How will this affect home buyers?

Reblogger Marilyn Boudreaux
Real Estate Agent with Marilyn Boudreaux, Century 21 Mike D. Bono & Co.'s

 

There are Lots of changes with lenders going into effect immediately, this is a very informative explanation of Fannie Mae.  I also posted a blog about the change with contracts written over and above list price and closing costs.  Loan officers are our best friends right now to keep us informed when we write contracts!

 

Original content by Amy Jones Group DRE# SA528757000

Beginning with applications dated June 1st, Fannie Mae is implementing the “Loan Quality Initiative” (LQI) guidelines.  All Fannie Mae lenders must adhere to these guidelines.  In a nutshell, the LQI guideline changes are:

  1. fannie mae loansCredit re-verification the day of funding:  Fannie Mae will require the borrower’s credit to be repulled the day of funding.  If the credit obligations change by more than 2%, the loan is required to go back to underwriting for approval.  Peoples Mortgage will reverify credit obligations on the borrower’s credit report (this will not be a hard pull of credit and will not affect their credit score; it is simply a verification of all current obligations).  Buyers should be made aware of  this rule so they know they should not purchase any large ticket items or have their credit pulled during the escrow process.  This could end up disqualifying them from buying their home at the very last minute.  This has always been true, but some lenders were not in the practice of pulling credit toward the end of escrow.  Now it will be mandated
  2. Excluded Party Lists:  Fannie Mae will require all parties to the transaction be checked against the “excluded party” lists, which are managed by HUD and by the General Services Administration.  These federal lists cover a broad array of risk categories, including fraud, gross negligence, and lack of business integrity.  Individuals have been placed on these lists for both mortgage-specific and non-mortgage-specific activities.  Government loans have always used the GSA list to exclude anyone included.  This will not impact most borrowers.  Those borrowers who are on the list are aware they are on the GSA list;
  3. Social Security Number Validation: The borrower’s social security number must be validated.  Depending on the findings of the credit report pull and “Desktop Underwriting”, the borrower may be requested to show their valid social security card or additional documentation; in some cases the underwriting lender may be requested to contact the Social Security Administration to verify a SSN.
  4. Validation of Intent to Occupy:  Fannie Mae is requiring all investors to verify the borrower’s intent to occupy the property.  This may include employing 3rd-party services that specialize in investigating occupancy information, reviewing the hazard insurance policy or utility bills to confirm occupancy of the property following funding of the loan.  This has been an issue for years with buyers claiming they intend to occupy the premises in order to obtain a lower interest rate, with the full intention of using the property as a rental. 

Please speak with your Lender for more information and details or visit Fannie Mae Loan Quality Initiatives Frequently Asked Questions.

I feel these are all positive changes.  A little like closing the barn door once the horse has escaped...but positive changes nonetheless.  What do you think?

  _______________________________________________________________________________________________________________________________

    Chandler homes for sale               Sun Lakes Homes for Sale               Gilbert Homes for Sale         Tempe Homes for Sale       Ahwatukee Homes for Sale
Search Chandler Homes      Search Sun Lakes Homes       Search Gilbert Homes        Search Tempe Homes     Search Ahwatukee Homes

Amy_Jones_RealtorAmy Jones, REALTOR, ABR, CNE, EPro, CDPE
Direct~480-250-3857
Chandler, Sun Lakes, Gilbert, Tempe & Ahwatukee Real Estate
Phoenix Business Journal "Top 50 Real Estate Agent"
 
REMAX Excalibur

4921 S. Alma School Rd
Chandler, Arizona 85248

Visit www.AmySellsAZ.com for more information including free MLS search.
Visit
www.PhoenixArizonaRealEstateBlog.com  for a comprehensive Phoenix Area Blog.
Visit
www.SunLakesBlog.com about living in Sun Lakes, AZ.
Check out home values in your neighborhood!

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Groups:
Century 21 ActiveRain Bloggers
Century 21 Active Rainers
Tags:
financing
home loan
mortgage

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
617,742
Deborah Byron Leffler BzyBee Real Estate Lady!
Keller Williams Realty Boise - Nampa, ID

Interesting...stuff that has been a "rule" for a while but not necessarily enforced~! 

May 29, 2010 07:45 PM #1
Rainmaker
1,809,474
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
CRB, CRS, CIPS, GRI, SRES, TRC, e-PRO

Marilyn

The only thing that consistent with FHA is change. Let's see what happens.

Good luck and success.

Lou Ludwig

May 29, 2010 10:12 PM #2
Post a Comment
Spam prevention
Show All Comments
Ambassador
622,160

Marilyn Boudreaux

Lake Charles LA Century 21 Realtor
Ask me a question
*
*
*
Spam prevention

Additional Information