There’s a New Rule from Fannie Mae called the Loan Quality Initiative

This afternoon, I got this email from a mortgage friend of mine and asked permission to share this with you, she gave me permission. At the bottom, I included her name in case you want to talk to her more about this new rule….

This is really BIG news!

It’s a new rule from Fannie Mae called the Loan Quality Initiative (LQI).

What it really 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.  Yeah, 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

While this does not go into effect until July 1, 2010, here’s what to expect:

§         Loan will be underwritten 2 different times

§         Two sets of underwriting/closing conditions

§         New credit report prior to closing

The bottom line:  Be calm—it’s a federal rule and there is nothing you or I 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.

Let me help your clients get through this maze of loan requirements with ease.

I’m always a phone call or email away.

Cathy Gapen

Sr. Loan Officer

HomeTown Mortgage

5511 Highway 280 E., Ste 210

Birmingham, AL. 35242

cathy.gapen@htmortgage.net

205-980-7285 Phone

205-980-0618 Fax

205-305-0093 Mobile

NMLS# 190225

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