Good afternoon fellow mortgage industry stalwarts (or good morning, if that's when you're reading this). I hosted a web seminar this morning on the subject of Full Doc Loans (presented by MGIC corporate trainer Sheryl Yu), and I want to thank the attendees for making it a very productive session by asking so many great questions. I know this topic will remain popular, so watch the space to the left to see when the next Full Doc Loans session will be and sign up quickly. After all, it's free training!!
A couple of news items that I thought were definitely relevant to this blog came across the wire recently. First, an informal newletter I receive regularly included an item that indicates that conforming loan limits will almost definitely be raised on a permanent basis, and they will be determined on a regional basis like the temporary arrangement we're using now. Further, the story states that "Political observers suggest that legislators will end up agreeing on a new conforming loan limit at $600,000-plus. That’s a level between the "temporary" $729,750 loan ceiling in place now and the $550,000 limit approved by the Senate Banking Committee last week." Note: The newsletter normally includes the source of the quote, but this time it didn't.
Desktop Underwriter(TM) 7.0
The other news item is the fact that Fannie Mae(R) upgraded the Desktop Underwriter decision engine over the holiday weekend/ It reminds me of an anricle I read recently that said France waits until holiday periods to enact unpopluar legislation. It should come as no suprise that most of the changes result in tougher automated underwriting guidlines. And since GSE-saleable loans are going to be a big part of the wholesale product mix for the foreseeable future, I think it means that originators more than ever need to be intimately familiar with the finer points of DU (TM) and LP (TM). Below you'll find a few links to pages on Fannie Mae's website that you can use to educate yourself on the specific changes you can expect to see with DU 7.0:
https://www.efanniemae.com/sf/technology/ou/du/pdf/du70_flyer.pdf
https://www.efanniemae.com/sf/technology/ou/du/aboutdu70.jsp
https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndodu70.pdf
Let me know if you have any specific scenarios to share as you begin to runs loans through DU with the new automated guidelines. Thanks!
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