Effective 8:00 pm (PT), Thursday, March 5, 2009, the Conforming, Non-Conforming and Soft Market guidelines for LTVs > 80% have changed based on restrictions imposed by the Mortgage Insurance (MI) companies.

Stable Market Changes:
Conforming Loans:

• Maximum LTV lowered from 97% to 90%
• LTVs > 80%:
  • Minimum Credit Score: Increased from 620 to 700
  • Max DTI: Maximum DTI of 41%, regardless of AUS decision
  • Tradelines: Minimum 3 tradelines required
  • Payment History: Minimum payment history 0 x 30 x 12 required
  • Reserves: Minimum 2 months reserves required, regardless of AUS decision
  • Pay off of Subordinate Liens: All payoffs, including purchase-money seconds, will now be considered cash-out and will not be allowed for LTVs > 80%
• Second Home: Maximum LTV lowered from 90% to 80%
• Cash-Out: Maximum LTV lowered from 85% to 80%

Non-conforming Loans:

• Maximum LTV lowered from 90% to 80%

Conforming Soft Market Changes:

• LTVs > 80%:
  • Minimum Credit Score: Increased from 680 to 720
  • Condos: Maximum LTV lowered from 95% to 85%
• Interest-Only: Maximum LTV lowered from 90% to 80%

Impact to Pipeline
The following pipeline protection rules apply:

• Loans currently in the pipeline are eligible under the "previous" guidelines only if credit approved in the Wholesale Loan Center and locked by 8:00 p.m. (PT) Monday, March 9, 2009.
  • Only loans underwritten in the center with a communicated credit disposition of Approved or Approved with Conditions are eligible for pipeline protection.
• Loans in the pipeline must fund on or before Monday, March 23, 2009.
• Loans NOT able to lock and fund by the dates above must be recommitted to an allowable program such as FHA, VA or Rural Housing.
• Loans requiring Manual MI per existing guidelines must have a valid MI Certification in the loan file prior to closing. Due to MI volatility, it is highly suggested that loans requiring Manual MI per existing guidelines obtain the manual MI immediately.
• Loans eligible for CMI per existing guidelines may continue to utilize CMI but must meet above approved, lock and fund by dates.
• Lock extensions are not allowed.
• Re-locks will be subject to current guidelines.
• Reminder: Loan submissions received after 8:00 pm (PT), Thursday, March 5, 2009, that fall outside of these new guidelines that receive an e-Approve "Accept" decision through CWBC will not be honored.

If you have any questions about these changes, please call your Countrywide account executive.