Comments on: Get Preapproved before Memorial Day Weekend: More Changes with Fannie Mae

By: Rhonda Porter

Rhonda Porter — Wed, 28 May 2008 17:40:03 +0000

Fannie Mae’s upgrade (as well as changes w/MGIC) will actually take place this weekend: May 31, 2008.

If you took my advice and became preapproved prior to last weekend–you’re ahead of the game.

By: Rhonda Porter

Rhonda Porter — Tue, 27 May 2008 04:14:04 +0000

Lindsay, if a self employed borrower could provide two years tax returns showing a reliable-steady income, then there was no big deal. S/E borrowers have required more documentation and need to show that their income is stable or increasing.

By: Lindsay

Lindsay — Tue, 27 May 2008 03:52:04 +0000

“Self-employed borrowers will no longer be considered “an additional layer of risk.”

That’s nice to hear. I have a VA loan to use myself, but it’s always struck me as odd that being self-employed is considered a risk to banks. If you’ve got the two years tax returns to show a reliable income, then what’s the big deal? If anything, a self-employed person is less likely to suddenly be broke, because most of us have a wide variety of clients rather than one employer who controls our salary.

By: Rhonda Porter

Rhonda Porter — Thu, 22 May 2008 18:40:27 +0000

Greg and JD, it’s my understanding that if the loan has received a Fannie Mae Approval/Eligible under Version 5.7 by this Friday, it will be honored by Fannie Mae as 5.7.

Please verify with your lender/underwriter.

By: JD

JD — Thu, 22 May 2008 16:28:45 +0000

Question for the professionals here:

I was pre-approved via DU 5.7 as “Approve/Eligible” on May, 15th 2008. However, it doesn’t look like I would be able to get approved under DU 7.0 because of the new FICO score requirements.

Question: Will Fannie Mae purchase my loan after June 1st if the “Approve/Eligible” came back in DU 5.7 as opposed to DU 7.0? I’m scheduled to close on my home on June 9th and I’m looking for reassurance that my loan will first go through underwriting…..then Fannie Mae.

Please help!!!

By: Greg Broadbent

Greg Broadbent — Thu, 22 May 2008 16:24:48 +0000

I have a client that just applied for a mortgage on Monday, how far into the process do they need to be to qualify under the old rules?

By: Deborah Burns

Deborah Burns — Wed, 21 May 2008 04:21:33 +0000

Thanks for the second link Rhonda, there was a lot of good information there.

The numbers of people who are using “authorized users” is HUGE according to the article, 30% (60 to 75 million). Of course those numbers are not the same as those who were using unearned higher credit scores to get loans, that is just the gross number of consumers who are using some form of “authorized users” but still….

By: Deborah Burns

Deborah Burns — Wed, 21 May 2008 04:07:38 +0000

That is scary to think about that kind of manipulation, both from a lender POV (unearned higher credit score) and an “authorized users” getting financially abused. Good that it’s no longer being considered!

By: Rhonda Porter

Rhonda Porter — Wed, 21 May 2008 04:07:10 +0000

Deborah, this link is better: http://www.credit.com/credit_information/credit_report/Consumer-Alert-FICO-Formula-Changes.jsp

By: Rhonda Porter

Rhonda Porter — Wed, 21 May 2008 03:40:29 +0000

Deborah, it was common to have parents add kids or spouses add each other as an authorized user in order to give the other party the benefit of the established credit. This isn’t going to fly w/Fannie any more… the practice of consumers selling their established credit to strangers of being “authorized users” is also no longer allowed. I’ve heard that this happened, it was not something that I did nor that I witnessed.

Check out what Experian says…I just googled “authorized user”…I can’t believe it! http://www.experian.com/ask_max/max060105b.html