The maximum loan-to-value ratio on refinanced Fannie Mae mortgages that have cashout is being reduced by the secondary lender.
Washington-based Fannie says it constantly analyzes the profile of mortgage acquisitions. Higher-risk loans get special attention.
Its latest observations have led it to conclude that the maximum LTV ratio on cashout transactions secured by single-family properties should be lowered.
So Fannie said the maximum LTV ratio is being cut to 80 percent.
That is according to Selling Guide Announcement SEL-2014-13.
Previously, the maximum ratio was 85 percent.
Desktop Underwriter users will see the new limit on DU Version 9.2.
Manually underwritten loans with application dates of Dec. 13 or later will be impacted.
Whole mortgages with the higher old LTV ratios must be purchased by Fannie no later than May 31, 2015.
Loans in MBS at the old LTV ratios need to have issue dates prior to May 1, 2015.
