What are some new requirements for home purchase or refinance?

mortgage refinancing
by justin

Question by Yoli: What are some new requirements for home purchase or refinance?
I’ve seen alot of changes in mort. lender requirements;
i.e. 3 months principal, interest, tax and insurance payments seasoned for 3 months in a personal bank account prior to buying or refinancing a home. Verification of rental pmt. history from a property mngmt. co. or cancelled checks for the rent. Collection accounts settled or paid with proof either by letter of coll. co. or a cancelled check, No money orders. Three open and established credit accts. open for at least 24 months and with one being at least 2K high credit limit. A debt vs income ratio of no more than 45%. Adding all minimum credit payments, including mortgage, tax and insurance and dividing them into gross monthly income. Qualifying with bank stmts. in borrowers name using 24 months avg. deposits, no transfers, NSF or direct deposit. Borrowers name on home phone for res., bank acct. with matching address of residence. Business ph# listed with 411, current business lic. What new requirements have you seen?
Frequently Asked Questions
What Fannie Mae Does
What does Fannie Mae do?
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Fannie Mae is a financial services company on the New York Stock Exchange (FNM/NYSE) serving the American home mortgage industry. Fannie Mae offers banks and other mortgage lenders financing, credit guarantees, technology and services so lenders can make more home loans to more consumers.

Fannie Mae does not make home loans — we help mortgage lenders serve homebuyers. By serving more than 1,000 lenders nationwide, large and small, Fannie Mae helps to make home financing more possible for families from all walks of life across America.

http://www.fanniemae.com/faq/faq1.jhtml?p=FAQ

Best answer:

Answer by Mr. Knowitall
Not sure if you’re asking this from a consumer standpoint or a mortgage professional standpoint, but several of the criteria that you mentioned are not accurate.
FannieMae loans still do not require reserves, verification of rent, tradelines, payment of collections or a debt ratio less than 45%.
I recently got a loan closed where the borrower had no open tradelines, $ 24,000 in open collections, no rental history, and a debt ratio over 50% and the fixed 30 year rate was below 7%.
So, while I agree that most lenders are tightening their standards, I haven’t seen it to that degree yet.
The criteria that mentioned for bank statements has been around for awhile.

While I appreciate the background information on FannieMae, I have been in the business for over 10 years and I’m familiar with who they are.
99% of all “conforming” (read: good credit) loans are underwritten to their standards/guidelines through their automated underwriting system (Desktop Underwriter) and this system decides what is approved and what is not. FannieMae is not a lender – they’re a GSE (Government Sponsored Enterprise) and they purchase loans.

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2 Responses to What are some new requirements for home purchase or refinance?

  1. Katasha says:

    Most mortgage lenders should realize that a lot of companies pay now only by direct deposit, you have no other option. There are also a lot of people no longer carrying landlines, and just using a cell phone only. And you have no control over if your boss chooses to have his number listed in information or not.

  2. thinking-guru says:

    Let me put it this way: good credit opens all the doors. The higher your credit the less you have to verify – and vise versa. Conventional loan qualifications have not tightened up for those with scores over 620 (which is slightly below average). 100% financing is still available for a purchase; you can still go to 90% LTV on refi’s with little trouble.

    It is the sub-prime market and Alt-A (sort of between sub-prime and conventional) markets that have been slammed by tightened approval qualifications.

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