Fannie Mae is rolling out Version 7.0 of their Desktop Underwriter (DU)/Desktop Originator (DO) this weekend. There are several changes that will impact many borrowers. These include a minimum credit score of 580, a tighter total expense ratio, and more stringent guidelines when borrowers have a prior bankruptcy, foreclosure, or mortgage delinquency. Borrowers who have a 60 day delinquency on a mortgage payment in the past 12 months or a foreclosure within the last five years will be ineligible. Also borrowers with bankruptcies discharged less than 24 months ago are ineligible. Many of the Expanded Approval (EA) programs will see changes in both the allowable loan programs as well as borrowers qualifications.
It will take some time to determine how these changes will impact the approval process. As in the past, it takes several submissions to understand and cope with the changes.
Interest rates have been rising all week. The ten year treasury broke a key support level of 3.92%, finally reaching 4.13% yesterday before settling back to 4.03% today. Remember, the ten year treasury hit a low of 3.3% in March when mortgages dipped below 5.75%. Today's rate for a no point low fee thirty year fixed rate loan is 6.25%.