Urgent News If You Are Buying Or Selling

New guidelines effective with applications on or after June 1, 2010 affects APR, Good Faith Estimates, Truth in Lending and condo project approvals.

Fannie Mae has issued new lender mandates on a national basis. The intent is to verify that all applicant information is disclosed honestly and remains accurate as of the moment of closing.

Lenders will be required to:
1. Re-pull credit report information just prior to closing
2. Re-verify employment
3. Validate social security numbers
4. Verify intent to occupy
5. Verify that all parties to the transaction have been checked against the national "excluded party" list managed by HUD and by the General Services Administration.

The worst is the credit report for several reasons:
1. Credit report needs to be done as a soft pull so not to affect a credit score by showing an inquiry.
2. Additional credit or increase balances may change the debt-to-income ration more than 2 %. In which case, it will require suspension of loan and resubmittal to underwriting.
3. Any additional delinquencies will result in a new full credit report being pull and re-underwiriting of the loan uitlizing the new credit report.
4. Any and all inquiries from other lenders or credit suppliers must be verified by the credit bureau and certified that new debt did not occur. If new credit has been extended, the new debt must be included in the borrower's debt-to-income ratio and the loan must be re-underwritten.

Other factors affecting the underwritting:
W-2 employees that own more than 25% of a business will be required to provide business returns and cash flow analysis and full disclosure of child support and alimony. Any changes may render the applicant unqualified or delay the closing.

So What Do You Do Now?
1. Be totaly honest while submitting your loan application
2. Do not use your credit cards until after the closing
3. Do not request or accept any new credit
4. Do not change your job

Many loans will go through an immediate qulity control audit post closing. Any loans identified containing fraudulant information will be investigated by the FBI. Any applicant that signs an erroneous initial or final closing application could be committing fraud.