FNMA has changed the rules, tightened the belt and sailed the ships. Many changes have been made in the past few months to help reduce risk for FNMA, FreddieMac and all those Americans badly burned by the overzealous mortgage market. In May, they are updating the mortgage software that creates the approvals for your mortgages.

 These guidelines have been changed often over the last few months and updated within the written guideline manuals.  These manuals are sent to the banks and Wall Street lenders.  Mortgage brokers and bankers get them too.  Basically, it is a book with cross outs and comments written in red ink.  Picture it as third, fifth and tenth drafts of a Stephen King novel and he is not really sure how it ends.

 

It has become confusing and counter productive for the banks to approve these loans and then manually review them for changes in guidelines. They are now updating the software, so the loan is approved through the risk assessment software, without any human contact and/or interference.

 

Some of the changes are in increased FICO score requirements, lower loan to values and lower debt to income ratios.  This stuff is real hard to keep track of.  So, Wednesday morning,  I will be at a seminar at The Crown Plaza Hotel in White Plains, NY.  Since, the material is huge and important, Anne wants to come with me. (God bless her soul!)  The seminar is over at 1PM and then we will be back.  If anybody is looking for me or Anne please email me on my blackberry.  I am sure I and the other 300 people in the room will be checking for emails often.

 

If anybody is curious as to how these changes will affect them and their loan, call me after 1PM.

 

Thanks,

Dale Siegel