Mortgage Bankers: DU REFI PLUS now available on Fannie Mae's DU

Christopher Shearer

DU Version 7.1 April Update Release Notes Available

With the Desktop Underwriter^® (DU^®) Version 7.1 April Update release the weekend of April 4, we will implement DU Refi Plus™, an enhancement intended to provide lenders with increased flexibilities and efficiencies for Fannie Mae to Fannie Mae refinance loan applications.

DU Refi Plus will leverage DU to extend underwriting flexibilities, including expanded eligibility criteria and reduced documentation requirements, on eligible loan casefiles for borrowers who are refinancing an existing Fannie Mae loan and have an acceptable payment history (as determined by DU).

This release will also implement policy changes described in a recent Selling Guide Announcement and a Lender Letter, and other changes.

Release Notes for the DU Version 7.1 April Update release are available on the DU Release Notes for Lenders page on eFannieMae.com.

Overview of DU Refi Plus

DU Refi Plus complements, but does not replace, Streamlined Refinance Mortgages, a standard Selling Guide product that requires manual underwriting and must be originated by the current loan servicer. A comparison grid is attached that shows key characteristics of DU Refi Plus and Streamlined Refinance Mortgages.

Key features of DU Refi Plus

•·     DU Refi Plus will be available across all business channels.

•·     The originating lender does not need to be the current servicer of the existing mortgage.

•·     DU will automatically identify limited cash-out refinance loan casefiles as DU Refi Plus–eligible through a series of automated eligibility matches, and will issue a message in the DU Underwriting Findings Report indicating that the loan casefile was reviewed using the DU Refi Plus eligibility criteria.

•·      Any existing Fannie Mae loan, including Alt-A loans and/or loans with an Expanded Approval^® recommendation, is eligible to be refinanced into a fully amortizing FRM with 10- to 40-year terms or an ARM with an initial fixed-rate period of 5 years or more.

Highlights of the expanded eligibility criteria

•·      Loan casefiles with an LTV less than or equal to 80 percent will not be subject to the minimum 580 credit score requirement. 

•·      High-balance mortgage ARMs with an LTV less than or equal to 80 percent will not be subject to the minimum 680 credit score requirement. 

•·      The following transactions (currently limited to 75 percent LTV/CLTV/HCLTV ratios) will be eligible up to an 80 percent LTV/CLTV/HCLTV:

•o        3- to 4-unit primary residence transactions

•o        2-unit primary residence high-balance mortgage transactions

•o        Second home transactions on cooperative units (LTV only, as subordinate financing is not allowed)

•o        Investment property transactions

Note: For all other transactions, the standard maximum allowable LTV/CLTV/HCLTV ratios, minimum credit scores, and MI coverage requirements will apply.

Other flexibilities

•·      DU Refi Plus will provide reduced documentation requirements of one paystub and a verbal verification of employment for salaried/bonus/hourly borrowers, or one-year federal tax return for commission/self-employed borrowers on all DU Refi Plus–eligible loan casefiles. 

•·      Certain DU Refi Plus loan casefiles may receive additional flexibilities related to property fieldwork requirements issued by DU.

Other updates in the DU Version 7.1 April Update release

Updated property fieldwork requirements for foreclosure or REO properties

For purchase transactions where the transaction is the result of the sale of a real estate owned (REO) property, or the last transaction on the property being purchased was a foreclosure, lenders will be required to obtain an appraisal based on an interior and exterior property inspection.

Modified messages

Some messages will change to align with the 2009 Selling Guide; the Special Feature Code message will be updated to issue SFC 588 on detached condominiums; and project review messages on condominiums and detached condominiums will remind lenders of certain state-specific requirements.

Details regarding DU Refi Plus and the other updates in the DU Version 7.1 April Update release are available on the DU Release Notes for Lenders page on eFannieMae.com. All updates will apply to loan casefiles submitted or resubmitted to DU on or after the weekend of April 4, 2009.

Please contact me if I can be of assistance.

Heidy Escalante

Fannie Mae Desktop Originator® (DO®) Area Support Specialist • Hablo Español

Direct: 703.833.2245 • Fax: 703.833.5036 • Cell: 202-210-1651 • DO Technical Support: 877.722.6757 

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Christopher Shearer knows what it takes to be a successful lender. Since the start of our operation, our dedication to exceed your expectations and guarantee your satisfaction has made us what we are today. From start to finish in the loan process, we provide no less than exceptional service to our most prized possessions - our customers.

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