Loan Prospector® Outreach May 12, 2013, Release
On May 12, 2013, the Loan Prospector Outreach technology tool was updated to include the following enhancements:
- Updating the system to reflect revised qualification requirements for adjustable-rate mortgage (ARM) products to align with previously announced requirement changes as outlined in Guide Bulletin 2012-21; and
- Updating an existing income documentation feedback message to specify the applicable borrower name.
ARM Qualification Requirements Changes in Loan Prospector Outreach
Loan Prospector Outreach has been updated to reflect revised qualification requirements for ARM products with initial adjustment periods of five years or less. For these ARM products, the borrower must be qualified using the greater of the Note Rate plus two percentage points or the fully indexed rate. This requirement is effective for mortgages with settlement dates on or after July 1, 2013, was implemented initially into Loan Prospector Outreach on May 12, 2013, then modified on July 14, 2013, for mortgage loans in process.
For mortgages with initial submissions to Loan Prospector Outreach:
- Prior to May 12, 2013, and resubmissions prior to July 14, 2013 – Loan Prospector Outreach will assess the loan and calculate the debt-to-income ratio based on the lender-provided ARM qualifying rate and debt amount. This includes mortgages with initial submissions before May 12, 2013, that were subsequently resubmitted to Loan Prospector Outreach after May 12, 2013, but before July 14, 2013. You should enter the ARM qualifying rate and the correct borrower housing and total debt depending on the future settlement date of the loan (before or after July 1, 2013, when the new qualification requirements are effective).
- On or after May 12, 2013, and all submissions on or after July 14, 2013 – Loan Prospector Outreach will assess the loan and calculate the debt-to-income ratio based on the higher of either the lender-provided ARM qualifying rate, the Note Rate plus two percentage points, or the fully indexed rate (the sum of the lender-provided margin and index). Please note this also applies to mortgages with initial submissions prior to May 12, 2013, that were subsequently resubmitted to Loan Prospector Outreach on or after July 14, 2013.
Remember: all data submitted to Loan Prospector Outreach for the last Loan Prospector Outreach Feedback Certificate must be true, complete, and accurate.
Please note that for 7/6-month, 7/1-year, 10/6-month, and 10/1-year ARMs, the requirements remain the same.
Also as part of the Loan Prospector Outreach May 12, 2013, release, the system was updated to return the following new feedback message on all ARM products with initial adjustment periods of five years or less and initial submissions to Loan Prospector Outreach on or after May 12, 2013, and for all applicable submissions on or after July 14, 2013:
|New Feedback Message|
|LPN UK||The ARM Qualifying Rate used on this submission is ~X.YX%~ and is the higher of the customer provided ARM Qualifying Rate, Note Rate + 2% or fully indexed rate.|
Update to an Existing Income Documentation Feedback Message
With this release, Loan Prospector Outreach has been updated to reflect a change to include the applicable borrower's name in an existing income documentation feedback message. This change is consistent with other feedback message updates made in the Loan Prospector Outreach February 10, 2013, Release and also reflects the business requirements outlined in a December 14, 2012, Guide Bulletin. Beginning May 12, 2013, you will receive the following revised feedback message, when applicable, for all new submissions and resubmissions of conventional mortgages:
|Revised Feedback Message|
|DOC X1||Obtain most recent YTD paystub documenting at least 30 days of income and W-2(s) from the most recent 2 years or a written VOE for 24 full months. Additionally, obtain a verbal VOE, using Form 90 or comparable form, dated no more than 10 Business Days prior to the Note Date or after the Note Date but prior to the Delivery Date for ~EmplBorr~.|
If you have any questions about these updates, please contact Freddie Mac's customer support line dedicated to Loan Prospector Outreach at 866-733-0446, Monday-Friday, 8:00 am-8:00 pm (EST). Closed on New Year's Day; Martin Luther King, Jr. Day; Memorial Day; Independence Day; Labor Day; Thanksgiving; and Christmas Day.