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Upcoming Loan Prospector Enhancements to Align with Recent Guide Requirement Changes

June 19, 2014

We are making updates to Loan Prospector® to align with the Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-12 updates to and clarifications of requirements for calculation of monthly debt payment-to-income ratio, Freddie Mac Relief Refinance MortgagesSM, and verification of large deposits.

Loan Prospector Feedback Message Updates

Beginning June 23, 2014, you will receive the following revised feedback messages when applicable, for all submissions and resubmissions to Loan Prospector:

Monthly Debt Payment-to-Income Ratio

Message CodeFeedback Messages
LPR 4U Use 5% of the outstanding balance on revolving or open-ended accounts, regardless of the balance, in the absence of a monthly payment on the credit report or direct verification. Open-end accounts do not have to be included in the monthly debt payment if the Borrower has sufficient verified funds to pay off the outstanding account balance.
LPR E7 If credit report does not show the required monthly payment for an installment account, the file must be documented with evidence of the required payment amount. For a student loan that is deferred or is in forbearance, use a minimum of 2% of the outstanding balance as the required monthly payment.

The corresponding Web feedback messages are also being added and will be displayed on the Loan Prospector Documentation Checklist.

Relief Refinance Mortgage – Open Access

Message CodeFeedback Messages
LPN ZX For Relief Refi-Open Access, refinance proceeds are limited to the following: Pay off the unpaid principal balance and interest accrued through the pay off date of the original mortgage, pay related Closing Costs, Financing Costs, Prepaids and Escrows not to exceed $5,000 and disburse cash to the Borrower not to exceed $250.00. The proceeds may not be used to pay off or pay down any junior liens.

The corresponding Web feedback messages are also being added and will be displayed on the Loan Prospector Documentation Checklist.

Verification of Large Deposits Requirements

As stated in the Guide Bulletin 2014-12, we revised our requirements for verification of large deposits when using account statements to verify assets. Loan Prospector will be updated to remove the feedback message below at a later date. Until then, you may disregard this feedback message because it does not align with the revised requirements. Refer to the Guide Chapter 37 for the revised requirements.

Message CodeFeedback Messages
DOC 3X Other Assets: For an asset account verified with a direct account verification, document the source of funds for any account opened within 90 days of verification or has a balance that is significantly greater than the previously shown balance. If account statements are used to verify an asset account, document the source for any single deposit >25% of the total monthly qualifying income for the Mortgage.

For More Information

For additional details on the changes and Loan Prospector resources, please review:

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