Issue: Q&A - December 25, 2018

Compliance – Policy on Credit Report Name Errors: When should we re-run a credit report when we discover minor issues such as name misspellings, nicknames vs. formal name or missing addresses?

Answer: In most cases you can resolve credit report variables for the borrower’s name, by an aka statement.  However, if there is an issue with a married name vs. maiden name you will likely need a new credit report. In some cases, addresses can be resolved with an LOE, but for a DOB or SSN […]

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VA – Source of Funds: As part of the < 4% of closing costs requirement, what is considered a closing cost?

Answer: The funding fee, prepaid items, and any points paid for a permanent interest rate buy down are not considered a closing cost.  This is clarified when you read the Seller Concessions section of Chapter 8 of the VA Lenders Handbook.  The sum total of all of the Closing Cost Fees (origination, appraisal, title policy, […]

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Fannie Mae – PERS Approval: Does a PUD single-wide manufactured home need to be PERS approved?

Answer: Yes, they do. See highlighted text below from Fannie selling guide. Reference: B4-2.3-01, Eligibility Requirements for Units in PUD Projects (06/05/2018) Introduction This topic contains information on PUD projects, including: PUD Project Definition Eligibility Requirements for Units in PUD Projects PUD Project Definition A PUD is a project or subdivision that consists of common […]

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Fannie Mae & Freddie Mac-Co-Signor on Deed: Does Fannie Mae or Freddie Mac require a cosigner to be on the deed?

Answer: Fannie Mae guidance is clear that they would sign the deed, but Freddie guidance is less informative.  If you are trying to avoid the co-signer signing the deed, Freddie may be an option, subject to lender interpretation, but as mentioned, Fannie would require them to be on the deed. Reference:  Fannie Mae B2-2-04, Guarantors, […]

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Fannie Mae and Freddie Mac – Oil Leases & Royalty Income: Is the 3-year continuity of income required for oil leases where income is reported on the tax return, but no one knows how long a well will produce oil?

Answer: This falls under Royalty Income. Fannie Mae is more restrictive and shows a requirement for evidence of 3 years’ continuance.  Freddie Mac on the other hand has two different approaches. One approach is if you have received royalty income for one year, and the other approach is if you have received royalty income for […]

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