Fannie Mae November 2013 Desktop Underwriting Release

Fannie Mae rules apply to a large percentage of mortgages. At the end of 2013, they issued a few major revisions to the desktop underwriting program (used to review many of their mortgages). The following is an overview of the Fannie Mae November 2013 desktop underwriting release.

Refinancing With Home Affordable Refinancing Program

Individuals with Fannie Mae mortgages and refinancing using HARP typically had to utilize their existing lender and go through manual underwriting if they had a foreclosure, bankruptcy, short sale, or deed in lieu of foreclosure within the past 7 years. Requesting a mortgage from a new lender would put the file through desktop underwriting, which maintained a standard waiting period for re-establishment of new credit. With the released changes, the standard waiting period will be ignored, allowing people with Fannie Mae mortgage to refinance under HARP with their preferred lender.

Three Percent Down Payment Purchases

Previously, Fannie Mae mortgages were permitted with a low 3% down payment. This is now changed. The new minimum down payment percentage is 5%. Minimum FICO scores still apply but can differ for each lender. The lowest score allowed by the underwriting program is 620.

Treatment of Short Sales and Deeds in Lieu

Many individuals attempt to avoid foreclosure using a short sale or providing a deed in lieu of foreclosure. Lenders may wrongly note these as foreclosures, which may create issues for individuals who later attempt to buy a new property. In the past, customers would need to reach out to the previous lender to have this information rectified. Under the new desktop underwriting system, a mortgage company may override the information for a prior mortgage. This makes it possible for customers to get new mortgages in normal time frames.

Summary of Fannie Mae November 2013 Desktop Underwriting Release

The Fannie Mae November 2013 desktop underwriting release are both pluses and minuses for customers. The handling of short sales and deeds in lieu of foreclosure in addition to the refinancing under HARP will allow more people to obtain for Fannie Mae November 2013 desktop underwriting release. Conversely, the change in the down payment requirements percentage will make it more challenging for some borrowers to afford a property purchase. Even though these are significant revisions, there are many other criteria in the mortgage process that can impact a person's ability to get approval. Requirements might also differ with one company to the next. Be sure to speak with a local loan officer for specific details and assistance with your needs. The facts in this article is offered as a general introduction, may change without notice, and should not be interpreted as financial or legal advice.

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