|Fannie Mae’s LQI (Loan Quality Initiative) Guidelines and Freddie Mac’s Responsible Lending Guidelines recommend that undisclosed debts be verified before mortgage closings. 100% of the purchased loans are being electronically validated by the GSEs, performing reviews within 120 days. Fannie Mae and Freddie Mac Requirements Lenders are required to review DTI ratios and re-qualify borrowers’ who obtain additional credit prior to closing. If DTI ratio changes by 3% or more, than underwriting must be repeated. According to the Fannie Mae August 2010 Selling Guide Announcement, “Lenders are not required to obtain a second credit report just before loan closing. Rather Fannie Mae is reminding lenders to have processes in place to facilitate borrower disclosure of changes in financial circumstances throughout the origination process.”|
INFORMATIVE RESEARCH’s PreClose Monitoring gives lenders continuous risk management throughout the “quiet period”, from the original credit file pull to the closing of the loan. With early warning, proactively discuss the impact of the debt with your borrowers’, obtain additional documentation needed for the secondary market, and/or change the terms of the loan.
- Real-time monitoring of borrowers’ credit activity between the original credit file pull until loan closing.
- Lenders receive alerts on borrowers’ updated activity concerning new tradelines, credit inquiries and secondary reissues.
- Eliminates last-minute surprises that may affect closing.
- Prevents fraud by discovering misrepresentations in debt.
- Lower cost per customer acquisition.
To learn more about how INFORMATIVE RESEARCH’s PreClose Monitoring can help you and your borrowers Contact our sales staff today.