Changes to agency lending include higher credit scores, lower debt-to-income ratios and technological enhancements.
On the weekend of Dec. 12, Fannie Mae will implement Desktop Underwriter Version 8.0 as outlined in selling guide Announcement 09-29 issued in September. Among the changes are an increase in the minimum credit score to 620 and a 45 percent cap on debt-to-income ratios.
Fannie public relations executive Brian Faith explained in a statement that the updates are part of a normal routine of assessing risk. He pointed to higher delinquency rates for lower credit scores and higher DTIs.
“These adjustments reflect careful analysis of a borrower’s ability to repay their mortgage obligation over the life of the loan,” Faith said. “Our experience with recently delivered loans with credit scores below 620 is that they reached a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period.”
Washington, D.C.-based Fannie said in Announcement 09-30 that the Payment Reduction Plan replaced the HomeSaver Forbearance program on Oct. 31 in its workout hierarchy.
In Bulletin Number 2009-25, Freddie Mac said its selling and servicing requirements were amended to reflect several changes, including the discontinuance of document custodial services by Freddie. The Bank of New York Mellon Trust Company, N.A., was designated as Freddie’s custodian.
Freddie also said sellers can now access data generated by Home Value Explorer through the Loan Prospector browser.
The Government National Mortgage Association indicated in November memorandum to Ginnie Mae program participants that it planned to migrate the e-Notification application to the portal environment. The government-owned firm said its enterprise portal will eventually be the single access point for program participants to conduct online business with it.
