New Enhancements to FNMA Selling Guide

Here are again some new enhancements to the FNMA Selling Guide, which are already effective as of July 29.  I trust they will keep it coming! There is certainly more stuff to change! 🙂

Alimony Income is Getting a Face Lift:

 Lenders will now have the option of reducing the borrower’s monthly qualifying income by the amount of the monthly alimony payment in lieu of including it as a monthly payment in the calculation of the debt-to-income (DTI) ratio. Going forward, lenders may choose to use either option – reducing income or treating it as a debt – when qualifying borrowers. [Read more…]

Mortgage Rules Eased Again

Happy Friday Again!  Mortgage rules easing again! Debt to Income (DTI) Ratios expanding.

July 29th, this rule takes affect for Fannie Mae.  Freddie Mac and Fannie Mae more recently have allowed this case by case with enough compensating factors, but often loans would not receive that enviable “approve/eligible” finding.  Now, it appears we will see many more approvals possible.  Often there is income in a family that can not be counted according to the rules, cash, short term bonuses, short term overtime, 2nd job that does not have two years history or other famiy member income where they are not going on the loan, etc.  So this can make a lot of sense after a 2nd look.  🙂

The maximum allowable debt-to-income ratio (DTI) in DU will be adjusted in DU Version 10.1. Under the adjustment, DU will consider applications with a maximum DTI of 50%. For DTIs above 45% and up to 50%, DU will no longer require certain additional compensating factors. 

All the best on this great Friday!

Don