Conventional Underwriting: Genworth Mortgage Insurance

Message from Genworth Mortgage Insurance:

Genworth Mortgage Insurance will make the following changes for all MI applications received on or after January 17, 2009.

These changes supersede previously issued Genworth-approved program exceptions and apply regardless of submission channel (including EXCEL® and EasySubmit®) or Automated Underwriting System (AUS) recommendation or decision.

Loans originated by a Broker Third Party Mortgage Originator will be subject to the following Third Party Originated Lending Restrictions in addition to our standard guidelines:
• Maximum Loan to Value = 90%
• Minimum Credit Score = 720
• Occupancy = Primary Residence Only
• Purpose = Purchase
• Property Type = 1 Unit - Single Family Dwelling, Manufactured Home, Condominium, or Co-op Unit
• Ineligible in Declining/Distressed Markets

We, Genworth, define a Broker Third Party Origination as a loan for which any of the loan origination or processing functions, including taking the loan application and ordering documents, processing and for which all underwriting and final loan approval are performed by an entity other than the entity closing, funding or ordering the MI (the Insured).

We, Genworth, will be updating our online application to facilitate the identification of loans originated by a third party.

Genworth's Underwriting Guidelines will be updated to include these changes and will be posted to our website at mortgageinsurance.genworth.com by January 17, 2009. Please distribute this information to the appropriate contacts within your organization.

Contact your Genworth representative or the ActionCenter® at 800 444.5664 for additional information.

Conventional Loan Files: PMI Mortgage Insurance

Message from PMI Mortgage Insurance:

In order to continue our efforts to adapt to recent and anticipated trends in the mortgage market, PMI is making eligibility and guideline changes effective February 1, 2009.

The changes are as follows:
-Maximum 95% LTV for all loans, including affordable housing programs.
-Cash-out refinances and second homes are no longer eligible for insurance.
-Properties located in Alaska, New Mexico, New York, Rhode Island and Washington will be subject to a minimum credit score requirement of 700 until the Departments of Insurance (DOIs) in these states approve PMI's rate filing for rates effective 10/1/08. Please visit http://click.pmiemail.com/?ju=fe27157475660075701379&ls=fdf11572756d01797d1c7975&m=fef71074756d03&l=fec316797162027c&s=fe1f15767c670675711d76&jb=ffcf14&t= for updated rate sheets and rate filing state status.

PMI's Distressed Markets Policy will be updated as follows:
-Minimum credit score established for MSA/MSADs designated Level 1 and 2
-Borrowers who have nontraditional credit are no longer eligible
-The entire states of Arizona, Florida and Nevada are now designated Level 2 and must meet the following additional criteria:
Minimum 720 credit score
Maximum $417,000 loan amount
Maximum 45% DTI
Maximum 90% LTV

-Attached housing is no longer eligible in the Florida MSA/MSADs listed below (this includes condominiums, attached PUDs, co-ops, 2- to 4-units, townhomes, and rowhouses):
Bradenton-Sarasota-Venice, FL
Deltona-Daytona Beach-Ormond Beach, FL
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (MSAD)
Miami-Miami Beach-Kendall, FL (MSAD)
Naples-Marco Island, FL
Orlando-Kissimmee, FL
Pensacola-Ferry Pass-Brent, FL
West Palm Beach-Boca Raton-Boynton Beach, FL (MSAD)

-The Quick App option will no longer be eligible for mortgage insurance submissions.

-We, PMI, have updated our Guidelines at a Glance; Alaska/Hawaii Guidelines; Distressed Markets Policy, List and Charts; Streamlined Refinance Guidelines; and Construction-to-Permanent Guidelines to reflect the changes effective February 1, 2009. You can access these documents here .

Clarification for Condominiums and Condominium Conversions
-PMI's condominium project eligibility requirements are for existing projects only and pre-sale requirements have been removed.
-The condominium conversion requirements have been changed to:
Resales of converted condominium units are eligible for insurance if:
All units have been previously sold to individuals other than the developer, and the project has been turned over to the HOA, and all other condominium project eligibility requirements have been met.

If you have any questions, please visit http://click.pmiemail.com/?ju=fe2e157475660075701c71&ls=fdf11572756d01797d1c7975&m=fef71074756d03&l=fec316797162027c&s=fe1f15767c670675711d76&jb=ffcf14&t=.

2009 FHA Maximum Mortgage Limits

FHA has released Mortgagee Letter 2008-36 2009 FHA Maximum Mortgage Limits announcing the new county limits for calendar year 2009. The mortgage limits are effective for loans that have a final credit approval on or after January 1, 2009 or for those transactions that did not close by 12/31/08.

Click here to review Mortgagee Letter 2008-36 in its entirety.

Attachment I -- FHA Loan Limits for Areas AT CEILING AND ABOVE

Attachment II -- FHA Loan Limits for Areas BETWEEN CEILING AND FLOOR

FHA: Offsetting Mortgage Payments

You can no longer offset your existing mortgage payment on primary residence with just a lease agreement. The existing mortgage payment must be included in the debt/ratios unless you meet one of the following exceptions: Relocation OR Sufficient Equity in Vacated Property (75% or less). At this time we are only accepting a 2055 to verify equity.

See Mortgagee ltr. 2008-25 for full details.

Ruth Martinez
Sr. Underwriter

Fannie Mae DU Version 7.1

During the weekend of December 13, 2008, Fannie Mae will implement Desktop Underwriter® (DU®) Version 7.1. This release will support specific policy changes described in the following Selling Guide Announcements, as well as other changes described below:

• Announcement 08-08, Mortgage Eligibility and Pricing Updates for Desktop Underwriter and Manually Underwritten Loans
• Announcement 08-16, Bankruptcy, Foreclosure, and Conversion of Principal Residence Policy Changes; and Revised Property Value Representation and Warranty Requirements
• Announcement 08-18, Updated Adverse Market Delivery Charge and Flow Business Pricing Requirements
• Announcement 08-22, Miscellaneous Eligibility, Policy, and Pricing Updates
• Announcement 08-27, Permanent High-Cost Area Loan Limits

DU Version 7.1 will apply to new conventional loan casefiles submitted to DU on or after the Weekend of December 13, 2008. Loan casefiles created in DU Version 7.0 and resubmitted after the weekend of December 13 will continue to be underwritten through DU Version 7.0.

You can see the complete set of Fannie Mae Release notes at

https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndodu71.pdf .

12/10/2008: What Topic Would You Like to See?

Post your comments about any underwriting subject you'd like to discuss.

Note: please DO NOT post a comment about a specific file. Those type of comments should be directed to the individual underwriter via normal communication channels.

USDA Urgent Announcement

From: Lambright, Allen - McKinney, TX [mailto:Allen.Lambright@tx.usda.gov]
Sent: Thursday, December 04, 2008 2:27 PM
Subject: Urgent Eligibility Issue

As our program grows in North Texas, I am finding more and more instances where our on-line eligibility map has not kept up with local communities growth.

The most notable and controversial area is the northern portion of Tarrant County. The City of Ft Worth has grown into some of the open country that was once considered eligible. If a property is paying city of Ft. Worth taxes, it is not in an eligible area. We cannot make exceptions.

Please, please pay close attention to this when originating loans in Tarrant County. My staff will be working this issue and re-drawing the Tarrant County map in the near future.

Unfortunately, this will result in a more conservative approach to our eligibility line in Tarrant County. My staff may ask for tax data for any property that appears in question. Again, if the tax data shows the client is paying City of Ft. Worth, City of Denton, City of Lewisville, Flower Mound, Sherman, Denison, Dallas, Rowlett, etc, the property will not be considered eligible, regardless of the website determination.

I apologize in advance for any issues this may cause. If I can be of service, please call.

Allen M. Lambright Area Director USDA Rural Development 1406 E North McDonald McKinney, Texas 75071 Ph: - 972.542.0081x4 Cell: - 972-489-2556 Fax: - 972.542.4028 www.rurdev.usda.gov