Effective 6/1/2010... New FNMA Guidelines

Just when you thought you had an understainding of the current mortgage regulations FNMA has come out with new guidelines regarding the level of documentation required to close a loan.

These changes are effective June 1, 2010 and have been adopted by Secondary Market Investors.

Here are the key ones that buyers and agents should be aware of :

• Credit reports

  will be run again right before the closing to assure that new debt was not added since the original credit report was completed. Mortgage brokers will also be required to check on any recent credit inquiries on the credit report that might indicate that new credit had been applied for but not yet put in place.

• Social Security numbers will be required of all borrowers including non-resident aliens. These numbers will now be double checked for accuracy and legitimacy. Any questions that arise will require certification from the Social Security Administration.

• Loan to value calculations will now be rounded up unless it is not significant to the third decimal place. As an example if the loan amount divided by the lower of the sales price or appraised value equals 80.01% it will be rounded up to an 81% loan to value. However if the calculation equals 80.001 then it will be rounded down to 80% loan to value.

• Mortgage Electronic Registration System (MERS) reports will be run on all loans just prior to the closing in order to assure that the borrowers are not closing at the same time on another property. MERS is a national registry system that electronically records closings, think of it as a national registry of deeds.

• The agencies are requiring all lenders to run all names involved with a transaction through the HUD and GSA list of excluded parties. If the name shows up on the list the loan will be ineligible for sale. This requirement places a greater emphasis on dealing only with lenders who you know very well.

Now more than ever it continues to be important for buyers and agents to do business with credible and established lenders. The Kasey Group has comprised a list of lenders we work with on a daily basis that we have deemed reliable and trustworthy. 

 This information was obtained from an email sent to us by William Raveis Mortgage.