Friday, June 25, 2010

Borrowers need good looking bank statements too!

Fannie Mae (FNMA-any loan that is run through DU-Desktop Underwriter-which includes Conventional AND FHA loans) no longer approves loans with just a Verification of Deposit (VOD). If we use a VOD we must also have a 30 day bank statement in file. Here’s the catch:

• If a bank statement shows ‘Large’ deposits (other than payroll) they MUST be explained and documented. (‘Large’ is a little interpretive: so it depends on borrower situation, but usually anything over $500-$1000)
• Also investor overlays are that if there are Overdraft or Non-Sufficient Funds on a bank statement that is in file – it shows a demonstration of living beyond their means and is an automatic ‘Decline’.

So the moral of the story is: Borrowers must provide 2 months of  bank statements on EVERY file and we need to make sure that buyers and borrowers are aware that they will need to be on best behavior (no over drafts or NSF's) before they supply bank statements to the lender!  

Thursday, June 24, 2010

3 ways to mess up a Mortgage closing

• Lenders have gotten stricter in response to the mortgage meltdown.
• If you want to implode your impending mortgage, get a new credit card or auto loan.
• Changing jobs is another good way to derail a mortgage before closing.

Want a lender to delay or even cancel your mortgage closing? Then change your "borrower circumstances" between the day you apply for and the day you close a home loan.

Lenders have gotten stricter in response to the mortgage meltdown. The latest tightening of the screws comes from Fannie Mae. The mortgage titan's Loan Quality Initiative, which went into effect June 1, requires lenders to track "changes in borrower circumstances" between application and closing.

The rules aren't new, but Fannie will enforce them more vigorously. For borrowers, it means certain actions are likely to delay or otherwise mess up a mortgage closing.  "Any change in circumstance could affect and delay a borrower's closing on a transaction," says David Adamo, CEO of Luxury Mortgage of Stamford, Conn.

Following are three things borrowers can do to mess up their next mortgage closing.