News

07/24/2010 - Fannie Mae Lender Quality Initiative

Fannie Mae has implemented a Lender Quality Initiative for any new applications.  While the rules are not new, the enforcement of these rules to this extent is.

This is in response to the mortgage meltdown of 2008 - 2009, which has caused many foreclosures in the US.  Many of these loans can be tracked back to faulty or sloppy underwriting practices, and Fannie Mae's new enforcement provides direction on stricter underwriting procedures.

The net of it is that your lender will now pull a new credit report the day before closing.  If you have added debt, or increased your debt loan by running up your credit cards, or even applied for new credit, your closing may be delayed.

Any credit applications will have to be explained, and you may have to provide a letter proving you did not add debt.  And you if you have added credit or run up your card balances, your loan approval may be affected because your debt to income ratio may be too high now.

The best thing to do?  Do not change any aspects of your credit, income, or debt situation from the time you apply for a loan until your loan is closed and funded.

More info - http://www.goodmortgage.com/Learn/Qualifying/What_Not_To_Do.html

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