More Bank Changes

Fannie Mae, over the weekend, sent out changes that apply to conventional loan case files submitted, and all existing DU Version 7.0 case files resubmitted, on or after August 16, 2008. Titled “Support for jumbo-conforming mortgage loans”, they set forth automation of the eligibility guidelines previously announced, which include minimum credit score requirements, maximum total expense ratio, max LTV/CLTV/HCLTV, reserve requirements, mortgage delinquencies, eligible property types, eligible amortization types and terms, and eligible mortgage products.

 

CitiMortgage, who sent out a 7 page list of changes, “will now accept loans for the Conventional Economic Stimulus Act of 2008 that have been underwritten and approved via DU. Fannie Mae has updated DU with the necessary Conventional Economic Stimulus criteria. When an Approve/Eligible finding is received from DU all DU recommendations may be followed for Income, Assets, and Ratios. (In the cases of a “Refer” decision, the loan will revert to a manual underwrite and all applicable requirements will apply.)” CitiMortgage will purchase VA loans per VA guidelines, up to a cap of $1 Million, inclusive of the VA funding fee.

 

Chase, also in a lengthy statement,announced changes to their Non-Agency Fixed and ARM products (Amortizing and Interest Only). These include reducing the maximum LTV/CLTV to 85%/85% on Non-Agency products and programs, including their Premier Program, reducing the maximum cash back on LTVs 80% from $500,000 to $250,000. For Chase’s Agency Interest Only Fixed and ARM products, they will be requiring a DU approval on 1 unit/Condo/PUD transactions, revising the maximum LTV/CLTV on Co-ops, and adding minimum credit score criteria on Co-ops. Chase also clarified the down payment assistance programs that they ceased accepting.

U.S. Bank Home Mortgage Correspondentgroup stated that “Due to the imminent termination by HUD of the Seller Funded Down payment Assistance Programs, they have determined that loans utilizing Down payment Assistance Programs will no longer be eligible for purchase by USBHM.”

 

Franklin American Mortgage, “Due to current changes in the marketplace is implementing changes to the My Community 97 and Home Possible 97 products and providing additional policy clarification for FHA Down Payment Assistance loans.  The product changes are effective for all loans locked on or after August 19, 2008.”

 

Is your entire 401k in Fannie & Freddie? I hope not. Shares of Fannie Mae and Freddie Mac plunged yesterday to their lowest points in twenty years. Fannie fell 22% and Freddie lost 25% after a Barron’s report, which I mentioned yesterday, suggested that a government takeover of the troubled companies is inevitable. Both of them are down 80% in the last 8 months!

If your on the fence about a refinance or a purchase of a new home, Do your self a favor and get informed.

Thanks Rob Chrisman for the updates, your a genius.