Mortgage Scope

Mortgage and Lending with Top Flite Financial Inc NMLS# 195600

For all Loan Officers and Real Estate Agents who want the latest information about the new changes to Fannie Mae Underwriting, here is the new 7.0 module broken down into simple terms.  Terminology maybe foreign to some of you, so any loan getting a Refer, Refer/Ineligible, Refer with Caution, is not approvable under any circumstance.  This is for Conventional financing only.  This does not apply to Government (FHA, VA) products.


Funds To Close    

DU will no longer issue a Refer recommendation for a loan case file due to insufficient funds to close; however, if at any time the borrowers funds are less than those required, DU will issue a message stating that the required funds must be obtained from eligible sources and must be qualified and verified and prior to closing.

Loan Purpose

DU/DO will no longer analyze the unpaid principal a balance increase when assessing the risk of a refinance transaction but will use the purpose of the refinance.

Self Employed

Self Employed borrowers will no longer be considered a higher risk class of borrower



Total Expense Ratio

If current debts exceed the maximum allowable total expense ratios, loan case files that would have otherwise received an Approval recommendation will receive a Refer recommendation

Credit Policy

Minimum representative credit score will be 600

Mortgage Lates

·      Mortgage lates reported within the previous six months that were 60 or more days past due will receive a Refer With Caution/IV

·      Mortgage lates reported within the previous twelve months that were 60 or more days past due will receive an Ineligible recommendation


·      Foreclosures reported within the previous five years will receive a Refer With Caution recommendation

·      Foreclosures where a date cannot be determined from the credit report, a Refer Recommendation will be issued


Mortgage Insurance

No longer will be considered a mitigating factor



Loan Type/Amortization

Risk levels associated with each amortization type will change as follows, starting with those loan types representing the least amount of risk:

·      fully amortizing fixed-rate

·      fully amortizing five-year, seven-year and ten-year ARMs

·      six-month, one-year and three-year ARMs as well as fixed-rate interest-only mortgages

·      interest-only ARMs and balloons

Property Type

The level of risk associated with each property type is as follows, starting with the least amount of risk:

·      one-unit, non-cooperative projects and detached condominiums

·      attached condos, units in coop projects and 2-unit properties

·      three and four unit properties

·      manufactured homes


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