On June 30th, Fannie Mae published an updated Selling Guide that includes a number of key policy changes that will simplify our requirements and result in less documentation from your borrowers.
Below are some of the key changes:
Removal of conversion of principal residence policy: Fannie Mae removed the additional reserves and rental income overlays that were required when borrowers are selling or renting out their previous home. The 30% equity in the departing residence is no longer required to use rental income to qualify.
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Verification of stocks, bonds, and mutual funds: Borrowers using verified stocks, bonds and mutual funds to complete a transaction no longer need to document that the assets were liquidated when the verified amount is at least 20% more than is needed for the transaction. In addition, borrowers can now get 100% credit for the value of these accounts toward reserves (up from 70%), which means more assets can be factored into qualifying the borrower.
Unreimbursed employee business expenses: No documentation or deduction of 2106 expenses from monthly income is required for salary, bonus, overtime, or commission income of less than 25% of the monthly income. This mirrors the existing Prospect Mortgage Policy.
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