IMPORTANT UPDATE INFORMATION
All lenders that sell directly to FNMA or to an investor that sells directly to FNMA will be required to implement new due diligence policies and procedures starting within the next 90 days.
On February 26, 2010, Fannie Mae issued Lender Letter LL-2010-03, An Introduction to Fannie Mae’s Loan Quality Initiative, which identified policy, process, and technology enhancements aimed at improving the lender’s ability to deliver mortgage loans that meet Fannie Mae’s underwriting and eligibility guidelines and thus mitigate repurchase risk. This Announcement describes some of the changes impacting the Selling Guide as a result of the Loan Quality Initiative (LQI). Specifically:
· Confirmation of each borrower’s identity prior to the extension of credit (applications dated on or after 06/01/10)
· Verification that all borrowers have a valid and accurate Social Security number or Individual Taxpayer Identification Number
· Desktop Underwriter® (DU®) “Potential Red Flag” messages
· Confirmation that all parties to the mortgage transaction meet certain qualifications
· Determination that all borrower’s debts are included in the qualification for the mortgage loan
· Identification of the property unit number
· Calculating LTV ratios
· Manual underwriting of DU Refer with Caution/IV loan casefiles
All customers should be prepared for some of the new due diligence required on FNMA products. If you are not a direct seller/servicer executing these new functions, you should be prepared for delays or process enhancements by your investors who will be implementing these new functions.
https://www.efanniemae.com/sf/lqi/pdf/lqisummary.pdf THIS SUMMARY PROVIDES RESOURCES, LINKS and DATES.
