Loan Program Updates

Fannie Mae announced it amended its seller guide by making pricing and eligibility changes to its MyCommunityMortgage program for low-income and moderate-borrowers and updating the 2007 area median income.

For all loan deliveries on or after Aug. 1, 2007, MyCommunityMortgage pricing will include a loan-level price adjustment of 1.00 percent to be assessed on all MCM loans, whether they are manually underwritten or automatically through Desktop Underwriter. The update will be reflected in the release of DU Version 5.7, which will make DU underwritten loans that receive and EA-II recommendation ineligible as MCM loans.

Effective Sept. 1, 2007, all MCM loans must follow the 2007 area median income limits because many of these are lower than the AMI estimates for 2006. Last year’s limits will apply in determining if manually underwritten loans meet the Community Lending area median income limits on applications taken before June 10 and these must be delivered by the end of August. The same dates apply to loans that undergo automated underwriting, but even loans rendered “ineligible” on or after June 10 can be delivered with 2006 limits provided the only reason for ineligibility is the decrease in the AMI.

eLynx’s 500-plus lender clients can now deliver closed loans to Wells Fargo Funding electronically, according to a press release. eLynx’s addition of Wells to its extended document communications network, allows lenders to securely package and electronically submit loans, formatted to individual institution specifications, and track closed loans to Wells Fargo.

“Our investor delivery service lets lenders deliver investor-compliant loans to an investor in minutes,” eLynx said in the announcement. “It takes as much time just to create a shipping label for a paper loan package.

BNY Mortgage recently launched Prime Advantage, which it said is the first fixed-rate jumbo reverse mortgage. The program is also available with a variable rate, currently at Prime plus a margin, and offers an Equity Protector option with which borrowers can protect 10 to 50 percent of their home’s value. Borrowers can fold the closing costs into the loan or waive them with a full cash draw at closing. State or local mortgage tax, including excise or intangible tax, may apply.

In addition to retail access in certain states in the Northeast, Prime Advantage is currently available only in California from select BNY wholesale partners but will be available throughout the country in coming weeks, BNY said.

Brokers in the Denver, Colo., area can look to do business with BankUnited Financial Corp., which announced it increased its number of wholesale mortgage offices to nine with the opening of its first center in that city. BankUnited said it sees “a great deal of potential in the region,” noting the site was chosen due to its population growth, demographics and market compatibility with BankUnited.

Loan807 was launched by the parent company of nonprime wholesaler American Guardian Home Loans, according to an announcement yesterday.

The retail channel will offer the same 95 percent loan-to-value program recently added to American Guardian’s menu, spokeswoman Melissa Tiffin said in an e-mail statement to MortgageDaily.com. With a minimum FICO of 580, the 95 percent LTV is good for up to $700,000 on either 2/28, 30-year fixed, 40-year fixed with a 30-year balloon, or interest only with full doc.

“We still value our brokers and will continue to support them. Loan807 will remain separate from American Guardian Home Loans and will not directly compete with American Guardian Approved Brokers,” explained American Guardian Financial Group Inc. President Kamran Khosravi in the announcement.

Brokers may be seeing fewer stated income wholesale programs if the U.S. Comptroller of the Currency has his way.

In a speech to the Neighborhood Housing Services of New York, the comptroller, John C. Dugan, said he is increasingly troubled by the growing use of unverified “stated income” in subprime lending and indicated reliance of such should be reduced to better predict repayment ability, according to an announcement. He noted that even though stated income programs are appropriate in some situations, he is pushing for federal banking agencies to more strongly address stated income loans in finalizing the guidance on subprime lending.

While stated income loans — which accounted for nearly 50 percent of all subprime loans last year — are not the sole cause of rising delinquencies and foreclosures, Dugan found it “telling that, when faced with new housing market conditions, lenders have responded first by tightening standards on stated income.”

Additionally, he noted one of the first things servicers do when trying to decide on restructuring or foreclosing a mortgage is seek verification of income — something he suggested should have been done up front.