July 16, 2015

Consistent with FNMA Announcement 2015-07, REMN Wholesale has made the following changes effective immediately for existing pipeline loans as well as new submissions:

 

CONVERSION OF PRINCIPAL RESIDENCE TO INVESTMENT PROPERTY

  • All unique requirements have been removed, including the 30% equity position
  • Rental income calculation and minimum reserves follow standard guidelines

 

STOCKS, BONDS, AND MUTUAL FUNDS REQUIREMENTS

  • When determining reserves, 100% of the value is permitted
  • If the stocks/bonds/mutual funds will be used for down payment and/or closing costs the following guidance is provided:
    • If the value of the combined assets (at 100%) is at least 20% MORE than what the borrower needs, liquidation is not required.
      • EXAMPLE 1:
        • Asset(s) from stocks/bonds/mutual funds are $100,000
        • Borrower needs $75,000 to close. $75,000 x 120% = $90,000
        • Since borrower has more than $90,000 in stocks/bonds/mutual funds, evidence of liquidation not required
      • EXAMPLE 2:
        • Asset(s) from stocks/bonds/mutual funds are $100,000
        • Borrower needs $85,000 to close. $85,000 x 120% = 102,000
        • Since borrower does not have more than $102,000 in stocks/bonds/mutual funds, evidence of liquidation is required

 

UNREIMBURSED EXPENSES

  • If a borrower is qualified using base pay; bonus; overtime; or commission less than 25% of the borrower’s annual income, the following applies:

 

– Unreimbursed expenses do not need to be deducted from qualifying income

-Union dues and other voluntary deductions on the paystub do not need to be deducted from qualifying income

 

  • If commission income is 25% or greater, unreimbursed expenses must be deducted

 

SALE OF EXISTING PRIMARY RESIDENCE

 

  • When a borrower is selling their current residence and it will not close prior to the closing of the subject property, the PITI from the existing primary does not need to be considered provided:

 

– There is a fully executed contract of sale for the existing property

– The borrower’s attorney or escrow company verifies all financing contingencies have been cleared

 

The product guidelines will be updated in the near future.

 

If you have any questions, please contact your Account Executive.

Important Changes To Our Broker and Emerging Banker Agreements  Read More