Fannie Mae Clarifies and Updates Underwriting Guidelines

Fannie Mae has just issued an update to the Selling Guide (SEL-2011-04) that affects the underwriting of loans as follows:

Deferred Student Loans While it has been Fannie MaeaEUR(TM)s policy to include payments for deferred student loans in the DTI, Fannie Mae has required verification of the payment amount. Effective immediately, if the payment is not documented in the file, Fannie Mae will allow lenders to use 2% of the balance as the qualifying payment.

Retirement Accounts Fannie Mae is no longer requiring lenders to verify the terms of withdrawal from a retirement account in order to use the asset as reserves. However, it appears lenders are still required to verify the conditions under which withdrawals may be made.

*Sarah Lagattolla is Director of Credit Risk Services for Bankers Advisory. She is an FHA D.E. Underwriter and a senior member of the Quality Control services division. Bankers Advisory is based in Belmont, Massachusetts and the firm authors policy manuals and state rule matrices for AllRegs.