[Loan Doctor]

Following are the most important things that are being noticed with the new changes to the AUS (Automated Underwriting System)

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Recently FNMA announced changes to the Conventional Conforming Fixed and ARM product guidelines. Please refer to the FNMA website for details.

The following guidelines are affected:

Foreclosure Policy

Fannie Mae is increasing the time period that must have elapsed following a foreclosure to 5 years before they will consider the borrower to have a re-established credit history. FNMA will continue to allow a lesser time period (3 years in lieu of the current 2 year requirement) for borrowers who can demonstrate documented extenuating circumstances that resulted in the foreclosure action.

(The elapsed time is determined by comparing the application date to the
completion date of the foreclosure.)

Excessive Mortgage Delinquencies

Loans with excessive prior mortgage delinquencies will not be eligible for delivery to Fannie Mae. Excessive prior mortgage delinquency is defined as any mortgage trade line that has one or more 60, 90, 120, or 150-day delinquency reported within the 12 months prior to the credit report date.

Authorized User Accounts Clarification

If the lender has information available to determine that the applicant is the authorized user of a trade line belonging to the applicants spouse, and the spouse is not an applicant in the transaction, the authorized user trade line must be considered for underwriting purposes.