Are you Familiar with the Loan Quality Initiative?

By
Mortgage and Lending with The Jonathan Arnold Team of Inlanta Mortgage

New Rule Makes for Bumpy Ride to the Closing Table



This is really BIG news; new rule from Fannie Mae called the Loan Quality Initiative (LQI)!



What it means is that in addition to “underwriting conditions” that may be required from the underwriter to close the loan, the loan must now be  “audited” by a quality control person to double-check the underwriter.  Yes, the loan will be "underwritten" twice—and not at the same time either!

Here are some of the things they’ll be checking for:

    Borrower Identify        Income Calculations        Employment
    Source of Assets        Appraisal Review             MI Coverage

Loan Quality InitiativeWhile this does not go into effect until July 1, 2010, lenders have started to implement the new procedures now. 

Here’s what to expect:

 

  •     Loan will be underwritten 2 different times
  •     There may be two sets of underwriting/closing conditions
  •     New credit report pulled prior to closing


The bottom line:  As if the waiting periods for the GFE, MDIA and HVCC were not enough, expect delays and new requirements.  Be calm—it is a federal rule and there is nothing you can do about it.  More importantly, warn your clients (and I will, too) of the potential that they may be required to submit more documents, right up until minutes before closing.

Posted by

 

 
 
  Katrina Cole  

Katrina Cole

Business Development

The Jonathan Arnold Team
   


Inlanta Mortgage, Inc
2029 Celadon Dr NE
Grand Rapids, MI 49525

 
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