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.
Helpful Links
- Fannie Mae LQI Summary
- Fannie Mae LQI FAQs
- Fannie Mae Lender Tips for Identifying Undisclosed Liabilities
CIC CREDIT HAS MANY LQI SOLUTIONS:
- LQI REFRESH CREDIT REPORT SOFT OR HARD INQUIRY
- LQI REFRESH FANNIE MAE REISSUE CREDIT REPORT
- 4506-T INCOME VERIFICATIONS
- GLOBAL WATCH EXCLUSION LIST SEARCH
- LEVEL 1 BORROWER AUTHENTICATION AND SSN VALIDATION REPORT
- 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
