Fannie Mae Revises Automated Underwriting Software...Tighter Guidelines (sigh...so what's new?)
On June 1, Fannie Mae launched its new software underwriting engine, Desktop Underwriter 7.0, used by lenders to get automated underwriting decisions on applications for mortgages they would like to sell to Fannie Mae. It replaces DU 5.6 and 5.7. As of June 1, 2008 all new files must be underwritten with the new engine. Of course, this continues the trend toward even more restrictions on giving out mortgages. A number of important changes have been incorporated including:
1. tighter allowances for debt ratios
2. minimum qualifying FICO score of 580 (the lower of borrower's or co-borrower's middle credit score)
3. if Fannie Mae has information that a borrower is designated as an authorized user on non-borrowing spouses credit cards, the spouse's payment obligations will now be included in the borrower's debt ratios
4. foreclosures are not allowed within five years of application
So, while the housing market cries out for enhanced conditions for sales, and consumers pray for continued access to mortgage credit, the noose just tightens again.
1. tighter allowances for debt ratios
2. minimum qualifying FICO score of 580 (the lower of borrower's or co-borrower's middle credit score)
3. if Fannie Mae has information that a borrower is designated as an authorized user on non-borrowing spouses credit cards, the spouse's payment obligations will now be included in the borrower's debt ratios
4. foreclosures are not allowed within five years of application
So, while the housing market cries out for enhanced conditions for sales, and consumers pray for continued access to mortgage credit, the noose just tightens again.
Posted by The Mortgage News at 6/15/2008 11:05 AM 
Categories: Underwriting Standards,Credit Crisis,Credit Reporting,Underwriting Guidelines,Conforming (Agency) Loans,Fannie Mae
Categories: Underwriting Standards,Credit Crisis,Credit Reporting,Underwriting Guidelines,Conforming (Agency) Loans,Fannie Mae
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