Freddie Updates Underwriting Requirements

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MORTGAGE EXPERT
12 · 09 · 09

Among a host of underwriting updates from Freddie Mac are revised employment verification requirements, data about the loan originators and state information on appraisers.

Verbal employment verifications will be required not more than 10 business days prior to the note date, according to Bulletin No. 2009-27. Written verifications are acceptable if verbal verification is not possible. The previous requirement was 10 calendar days.

The revision impacts loans with application dates on or after Dec. 14 and settlement dates on or after April 1, 2010.

Another underwriting update is Freddie’s approval for sellers to utilize a cash-flow analysis to determine that withdrawals of business assets by a borrower will not adversely affect the business. The analysis can be used in lieu of a letter obtained from an accountant.

Leases can be used for borrowers on recently purchased rental properties if tax returns confirm a two-year history of investment property income.

The temporary high-cost loan limits established for this year will continue to apply during 2010. Under the Housing and Economic Recovery Act of 2008, the one-unit high-cost limit is $625,000, while the high-cost one-unit limit under the Economic Stimulus Act of 2008 is $729,250.

The base conforming loan limit will also remain at 2009’s $417,000 on one-unit properties, though some high-cost areas have permanent higher limits under the HERA.

New loan-level origination data requirements go into effect for applications dated on or after July 1, 2010. The data are expected to help prevent mortgage fraud, stop predatory lending and ensure originator licensing and education.

Among the data to be collected are loan originator identifiers assigned by the Nationwide Mortgage Licensing System and required under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. But if a state — or a federal regulator — has not yet started requiring originator identifiers, then sellers aren’t require to provide the data.

Appraiser state license numbers will also be required.

Freddie said Form 65, Uniform Residential Loan Application, has fields for originator data including name, phone number and identifier. Fields are also provided for the name, address and identifier of the loan origination company.

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Mortgage Daily Staff

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