Paid-Off Revolving Debt No Longer Required to be Closed – Fannie

Fannie Maernhas issued a slew of updates, clarifications, and extensions affecting its Selling Guide.  Announcement SEL-2015-06 includes the followingrnchanges. The most notable change concerns the way paid-off revolving debt is treated.</p

Payoff of Revolving Debt at orrnPrior to Closing:</p

Effective immediately, if the balance of arnrevolving debt has been paid down to zero before settlement the Selling Guide no long requires that the accountrnbe closed.  The account may remain open evenrnas the DTI ratio is adjusted to reflect the change in monthly payment. Lenders mayrnignore the automatic reminder from Desktop Underwriter (DU) regarding an open accountrnuntil that feature is removed in a DU release later in 2015.</p

Extension of DU Refi Plus^TM and Refi Plus^TM</p

As announced in the May 12, 2015 Selling Notice,rnDU Refi Plus and Refi Plus have been extended until December 2016. The Selling Guide has been updated tornreflect the new application and delivery dates.</p

Manufactured Housing Affidavit of Affixture</p

The Selling Guide will no longer suggest lendersrnseek assistance from Fannie Mae’s regional offices in preparing this form but ratherrnthat the appropriate state or local agency be consulted.  The update also clarifies who must sign the affidavit.</p

Loan Repurchases and Make Whole Payments Requestedrnby Fannie Mae. </p

This is a technical change to correct an omissionrnfrom a 2010 revision to Section A2-3.2-01 of the Selling Guide.   The sentence appearsrnunder “Redelivery of RepurchasedrnLoans” and notes that a mortgage loan repurchased from another investor or GSErnthat was delivered in error to that investorrnor GSE is eligible for delivery to Fannie Mae, as long as it meets all relevant eligibility requirements.</p

Verificationrnof Deposits and Assets</p

Thisrnis to clarify that bank statements used to verify assets must cover two full monthsrnof banking activity rather than just one monthly statement that includes the priorrnmonths balance as has been a common misinterpretation.</p

Debt-to-Income Ratios </p

A statement has been added to the Guide to recognize that sometimes lenders may apply a morernconservative approach when qualifying borrowers. This is acceptable as long as Fannie Mae’s minimum requirements arernmet, and lenders consistently apply the same approach to similar loans. </p

Other clarifications included in the currentrnannouncement include:</p<ul class="unIndentedList"<liClarificationrnof CLTV and HCLTV Ratio Requirements for Project Reviews on Florida Condos</li<liRevisedrnKentucky Security Instrument</li<liUpdatedrnList of Approved Mortgage Insurance Forms</li<liUpdatedrnList of Special Feature Codes dealing with flood insurance</li<liA blanket change of all references to "eCommitting"rnand "eCommitONE" in the Selling Guide</iwith "Fannie Mae's whole loan committing application" or the "whole loan committing application."</li<liArnblanket change of all references to "National Underwriting Center" with "Loan QualityrnCenter."</li