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SallieMaeMortgag
22 Posts |
 Posted - 08/23/2007 : 07:41:20 AM
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My Community, Home Possible and Home Opportunities now requires a 1 point fee to close.
Also...
Announcement 07-14 August 21, 2007
Amends these Guides: Selling
Changes to Expanded Approval® Eligibility and Pricing and
Changes to Area Median Income Requirements
Fannie Mae’s Expanded Approval (EA) mortgage product enables lenders to provide financing
opportunities for borrowers with less-than-perfect credit at competitive interest rates. As of
July 22, 2007, Expanded Approval became available to all Fannie Mae-approved lenders
meeting certain financial and performance-related requirements.
Fannie Mae regularly reviews performance, credit eligibility and underwriting criteria, and
pricing of our products to maintain prudent risk management and homeownership
opportunities. In response to current market conditions, we are making eligibility and
pricing changes for certain Expanded Approval loans.
We believe that appropriate adjustments to Expanded Approval support our lenders and other
industry participants to improve the ability to offer borrowers sustainable mortgage options.
To that end, we are limiting the maximum loan-to-value (LTV) on loans that receive an
“EA-II” or “EA-III” recommendation.
While these eligibility changes are intended to help lenders identify sustainable mortgage
options, the changes do not significantly reduce the credit risks that are inherent with other
features of the Expanded Approval option. To help mitigate these risks, we are establishing a
loan-level price adjustment (LLPA) for all EA recommendations.
Expanded Approval Eligibility Modification
Fannie Mae will update Desktop Underwriter® (DU®) Version 5.7 on the weekend of
October 20, 2007, to implement revised maximum LTV limits for loan casefiles that receive
“EA-II” and “EA-III” recommendations where no subordinate financing exists. New loan
casefiles created in DU on or after October 21, 2007, will be subject to the following
maximum LTV limits:
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Loans that receive “EA-II” recommendations will be eligible up to and including an
LTV ratio of 97 percent.
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Loans that receive “EA-III” recommendations will be eligible up to and including an
LTV of 95 percent.
Loan casefiles receiving “EA-II” or “EA-III” recommendations that exceed these new LTV
limits will receive an “Ineligible” recommendation.
CLTV ratios remain unchanged at 95 percent for “EA-II” and “EA-III” loans with
subordinate financing. Lenders are encouraged to refer to the DU Version 5.7 Update
Release Notes for additional details.
Loan casefiles created before October 21, 2007, will not be subject to this eligibility
modification. However, loans that received an “EA-II/Eligible” recommendation with
LTVs greater than 97 percent or an “EA-III/Eligible” recommendation with LTVs greater
than 95 percent must be delivered to Fannie Mae on or before December 31, 2007.
Expanded Approval Pricing Modification
For whole loans purchased or MBS issued on or after December 1, 2007, pricing will include
an additional 0.50 percent loan-level price adjustment (LLPA) on all Expanded Approval loans,
including Expanded Approval with the Timely Payment Rewards feature.
All other existing price adjustments applicable to Expanded Approval mortgage loans continue
to apply.
Area Median Income Changes
Area median income (AMI) estimates are calculated by the U.S. Department of Housing and
Urban Development (HUD) and provided to Fannie Mae annually. Because of a change in
methodology for calculating the AMIs, many AMI estimates for 2007 were lower than the
AMI estimates for 2006. To minimize the impact of transitioning to the new methodology,
Fannie Mae has decided to use the higher of the two AMIs (2006 or 2007) for each
geographic area, effective wi |
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jpark31
1070 Posts |
Posted - 08/23/2007 : 08:03:35 AM
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they don't require a 1 point fee to close...there is a 1 point hit to pricing...this is already in affect...
Also, your comment has absolutely nothing to do with the Fannie anouncement regarding EA loans and the MCM median income changes. |
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SallieMaeMortgag
22 Posts |
Posted - 08/23/2007 : 08:18:46 AM
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quote:
Originally posted by jpark31
they don't require a 1 point fee to close...there is a 1 point hit to pricing...this is already in affect...
Also, your comment has absolutely nothing to do with the Fannie anouncement regarding EA loans and the MCM median income changes.
I am not talking about the pricing hit. I am talking about a 1 point FEE for MCM, HP and HO products. Maybe you have not heard about it yet but you will.
My post had TWO comments that had nothing to do with each other. That is why I said "ALSO". Please read. |
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