As of June 1, 2010 Fannie Mae is implementing the Loan Quality Initiative, LQI, to help "capture critical loan data earlier in the process and validating it before, during and immediately after loan delivery." Because Fannie Mae has had to buy back many of the mortgages they have underwritten and then sold in the past, they have implemented the LQI to improve the process for documenting information in order to reduce the risk that they will have to buy back new loans in the future.
What does this mean? If a person is planning to get a mortgage (new or refinance) it means that the lenders will require that the borrower meet guidelines from the time of application through loan closing and even beyond. It is expected to discover if the borrower has or is making other purchases that would affect them qualifying for the mortgage by increasing their debt-to-income ratio.
The lender will be monitoring the borrower's credit up until closing. Since they are not restricted from doing it immediately prior to closing, it could even delay the settlement. In addition to rerunning the credit report, lenders can verify that the borrower is still employed, monies in the bank, direct verifications with existing creditors, occupancy plans, social security numbers and individual taxpayer ID numbers.
So if you are planning to buy remember that you must not buy anything like furniture, cars, appliances or anything else that is financed until the home has closed and you've moved into it.
I understand what a buyer is going through to get a loan approved and closed and by working with me and my trusted mortgage loan officers we’ll make sure that you are in the best possible position to get your loan closed
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