in News > Residential Mortgage
print the content item
Fannie Mae is scheduled to implement changes to its Desktop Underwriter (DU) system on Nov. 16 that will make it harder for some borrowers to qualify.

These include tougher debt calculations for adjustable-rate loans; a complete removal of interest-only options; a maximum loan term of 30 years (instead of 40); and an increase in the minimum down payment from 3% to 5% of the loan balance.

While the increased down payment could deter some buyers, Fannie Mae's program still has advantages over that of the Federal Housing Administration (FHA), in that it does not require upfront mortgage insurance costs and offers lower private mortgage insurance costs.

To offset recent losses and shore up its reserves, the FHA recently raised its monthly and upfront fees and also made borrowers' monthly mortgage insurance premium effective for the life of most loans (e.g., until the borrower reaches 100% loan-to-value), making the FHA a less desirable alternative. However, it should be noted that the cost of private mortgage insurance for a Fannie Mae loan is contingent upon a borrower's credit score.

DU will also be updated to give lenders greater flexibility in underwriting and approving borrowers with a previous pre-foreclosure sale or short sale, Fannie Mae reports. Beginning Nov. 16, DU will include an option that allows lenders to instruct the system to disregard foreclosure information received on a credit report if there is also a pre-foreclosure sale noted on the same account or tradeline.

This change is designed to assist lenders and borrowers in managing inconsistent, incomplete and conflicting data that appears on the borrower's credit report.

To view the full list of changes coming with Desktop Underwriter version 9.1, click here.


Six important questions you need to ask about your compliance process. Click to download the buyers guide._id1144


Latest Top Stories

NAR: Existing-Home Sales Stagnant In March

Lawrence Yun, chief economist for NAR, says the trend is troubling because "there really should be stronger levels of home sales given our population growth."


RealtyTrac: 9.1 Million Homes Still Seriously Underwater In Q1

Although home values have increased more than 12% on average during the past year, there were still about 9.1 million properties "seriously underwater" as of the first quarter, according to RealtyTrac’s U.S. Home Equity & Underwater Report.


Greenwich Estate Sells For Record $120 Million

Copper Beech Farm, a 51-acre property and mansion located on the waterfront in Greenwich, Conn., hit the market last spring with an asking price of $190 million.


AMCs Generally Receptive To Proposed 'Minimum Requirements' Rule

The rule would require all AMCs that operate in states that have supervisory programs to register in those states and to allow those states to have authority over their licensing.


Major Metros Showing 'Early Signs' Of A Housing Bubble

Among the 35 largest metros nationwide, more than half of homes currently listed for sale are considered unaffordable by historical standards, according to a recent report from Zillow.

LenderLive_id1164
Hse SandyHook
Play for Pink
Orb Mobile
FedHomeLoan_id1130
Superior Home_id1078
SWBC_id1156