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4. June 2010 19:26
by mthomas
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LQI FAQ and solutions

4. June 2010 19:26 by mthomas | 0 Comments

Fannie Mae has been instituting new guidelines, which will affect the loan origination process. According to policies set forth in the Fannie Mae Loan Quality Initiative (LQI), Lenders are responsible for identifying and disclosing any new debts borrowers may have incurred just before closing, checking related parties against exclusionary lists, and validating Social Security numbers (SSN) throughout the origination process.

 

“Lenders must determine that all debts of the borrower incurred or closed up to and concurrent with the closing of the subject mortgage are disclosed on the final loan application and included in the qualification for the subject mortgage loan…”

 

“…Fannie Mae’s updated policy requires that lenders determine that the borrower has not established additional debt on or prior to the closing date. If additional liabilities are discovered, lenders must consider any such additional debts of the borrower in the qualification.”

 

Lender that discover new information that could impact the performance of the loan may have to resubmit the loan.

 

“Examples of situations in which loan casefiles should be resubmitted… if new derogatory information is detected and/or the credit score has materially changed.”

 

Additionally, going forward, loans found by Fannie Mae to be in noncompliance are subject to repurchase by the lenders.

 

“if Fannie Mae determines that any debts were not adequately disclosed on the application nor included in the debt-to-income ratio such that the loan would not have met Fannie Mae eligibility requirements, the mortgage loan will be subject to repurchase by the lender.”

 

Essentially, this means lenders are responsible for identifying and disclosing credit activity that has occurred between the time the loan is approved to the time it closes. Fannie Mae recommends a few key steps to help ensure compliance with its LQI.

 

·         Refresh credit reports just before closing to identify any new inquiries or debt obligations

·         Investigate new inquiries to determine whether the borrower does in fact have any additional debt to repay

·         Validate SSN with solutions such as ID Risk Review, Level One authentication, or SSA89 verifications

·         Credit Comparison report to quickly identify differences from initial report and refreshed report

 

Help Avoid repurchase with a refreshed CIC credit report

 

Identify new activity and debt obligations your borrowers may have incurred prior to, or concurrent with, the closing of their mortgage.

 

·         Credit Inquires

·         New derogatory and material score changes (score optional)

·         SSN and fraud alert validations (optional)

·         OFAC name screen

·         Public Records

 

With a refreshed credit report from CIC, you’ll get updates on the critical information Fannie Mae expects you to disclose. Plus, you have the option of initiating a hard or soft inquiry, so there doesn’t have to be an additional impact to borrowers.

 

Call for information on Fannie Mae LQI and how CIC can keep you in compliance 800-352-5882 or sales@ciccredit.com

29. May 2010 17:31
by mthomas
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Fannie Mae LQI

29. May 2010 17:31 by mthomas | 0 Comments

Fannie Mae’s new Loan Quality Initiative (LQI) mandates become effective on June 1, 2010, and these rules are really taking the mortgage industry by surprise. The new rules could derail some closings for buyers who rack up purchases or even take out new store credit cards before their home sales have closed.

The June 1 changes are part of a new effort by mortgage giant Fannie Mae to cut down on slipshod underwriting by lenders and frauds by borrowers. Fannie’s so-called “loan quality initiative” will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers, among other changes.  These last minute credit checks could result in a closing delay, pricing adjustment, or, worst, loan approval cancellation.

http://www.massrealestatelawblog.com/new-fannie-mae-lqi-rules-lenders-likely-to-order-last-minute-credit-reports-on-borrowers/

Helpful Links

 

 

CIC CREDIT HAS MANY LQI SOLUTIONS:

  1. LQI REFRESH CREDIT REPORT SOFT OR HARD INQUIRY

  2. LQI REFRESH FANNIE MAE REISSUE CREDIT REPORT

  3. 4506-T INCOME VERIFICATIONS

  4. GLOBAL WATCH EXCLUSION LIST SEARCH

  5. LEVEL 1 BORROWER AUTHENTICATION AND SSN VALIDATION REPORT

  6. MERS SEARCH.... COMING SOON!

contact CIC at 800-352-5882 for details to help keep you and your company in compliance with the new Fannie Mae Loan Quality Initiative guidelines

28. May 2010 23:09
by mthomas
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4506-T TURN TIME UPDATE

28. May 2010 23:09 by mthomas | 0 Comments

The IRS has just updated us on their current turn times for all Tax Return Verifications.  Due to server issues that the IRS experienced earlier in the week the servers are experiencing very heavy volume.  This volume increases is causing all systems to run slower than normal. Request are being processed but transmission is slow.  Most request will be processed within 72 hours.  The IRS and TaxReturnVerfications.com will be closed Monday May 31, 2010 in observation of Memorial Day.

21. May 2010 23:19
by mthomas
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Consumer Credit disputes can stop a loan

21. May 2010 23:19 by mthomas | 0 Comments

How a consumer dispute can stop or slow your loan when submitting to Fannie Mae and Freddie Mac.

 Many lenders guidelines have recently changed to not accept a loan for underwriting when a consumer dispute is showing on your credit report. To avoid such problems do not start any disputes during the home loan process and make sure all disputes have cleared from all three bureaus; Equifax, Trans Union, and Experian before applying for a loan. You may also stop all disputes by calling each bureau directly.  Consumer disputes can and will cause loans to stop during the underwriting process be careful when using credit repair companies also as their primary action is to dispute most everything on your file flooding the bureaus in hopes of having items removed from your credit file.

15. May 2010 20:55
by mthomas
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Red Flags rules June 1st 2010

15. May 2010 20:55 by mthomas | 0 Comments

Many businesses not yet ready for June 1 deadline