by Pat Zaby
June 11, 2010 14:25 PM
Here's a new wrinkle to add to all of the other things buyers have to deal with to get a loan approved and closed. FNMA, as of June 1, 2010 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."
The purpose of this requirement is to verify that the borrowers are in compliance with underwriting 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.
It will become increasingly important for agents to have the "talk" with buyers to not buy anything like furniture, cars, appliances or anything else that is financed until the home has closed and they've moved into it. The lender will be monitoring the borrower's credit up until closing. Since they are not restricted from doing it immediately prior to clsoing, 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.
It is imperative that the agent understand the scrutiny that the borrower is going through to get a loan approved and closed. More than ever, having a trusted mortgage loan officer is crucial to getting the sale made but the agent needs to also take responsibility in being familiar with the process.
For most transactions, finding the "right" home will never have the buyer's address without financing. To acquire the information and tools to help buyers understand the tax advantages, financing alternatives and investment aspects of homeownership, check out this demo.