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Monday, March 19, 2012

Desktop Underwriter® Refi Plus and Wells Fargo

by Calculated Risk on 3/19/2012 01:08:00 PM

Over the weekend I noted that Fannie Mae has updated Desktop Underwriter® (DU) so that lenders can now use the automated system. There are several advantages to the automated system, one was that borrowers would now be able to apply for a "HARP 2.0" refinance with lenders other than the lender for their original mortgage.

This morning I read the Wells Fargo "Amended DU Refi PlusTM Policy and Effective Dates".

First, Wells Fargo has decided to limit HARP 2.0 to loans that Wells services. If Wells is not the current servicer, then Wells will limit LTV to 105% - the same as HARP 1.0 guidelines. Well Fargo wrote:

"After further assessment of the new parameters for DU Refi Plus transactions, and the current market environment, Wells Fargo has reconsidered our policy regarding loans not currently serviced by Wells Fargo. As a result we will not offer unlimited LTV/CLTV options for Loans not currently serviced by Wells Fargo."
This is a significant change from just a few weeks ago.

On timing of DU Refi Plus:
"Loans with the expanded parameters defined above may not be submitted for Prior Approval underwriting until April 23, 2012, when loans can be delivered to Wells Fargo."
So any increase in refinance activity associated with the automated DU system, will start in late April for Wells Fargo.