My New Outside Blog

Las Vegas MTG Report: DU 8.0 changing the Mortgage landscape!

Las Vegas MTG report: DU 8.0 Changing the mortgage landscape on 12/12/2009

DU 8.0 will be released on 12/12/2009 to update the credit risks and assessment changes that have been implemented over the last several months from Fannie Mae. The DU 8.0 will change how much a home buyer can qualify for with tighter guide lines and the elimination of REFER status. For the purpose of this newsletter I will only be discussing DU 8.0 as it pertains to purchases and not refinances. FHA will be effected by these changes as well.

The Puzzle

Changes to Credit risk assessment DU 8.0

These changes are based on current market conditions after evaluations of data of loan performances and are necessary to manage default risks. The following changes are required to keep Fannie Mae and its clients with a means for sound financial home ownership based on credit risks.


Debt Ratio Changes for DU 8.0

  • Debt ratios will be lowered to 45% maximum back end. (some lenders were allowing up to 60%) If over 45% DTI will receive an ineligible response. DU 8.0 will no longer issue a refer. (This will eliminate a manual underwrite ability).
  • Debt ratios of up to 50% can get an Eligible / Approve with compensating factors. Example strong FICO scores, large assets for reserves.


Minimum FICO Score with DU 8.0


  • Minimum FICO score with DU 8.0 will now be 620. Any score with lower then a 620 will receive an ineligible.


Foreclosures with DU 8.0

  •  DU 8.0 will require home buyers with Foreclosures to be over 5 years from the foreclosure date and within 7 years to have 10% down and a minimum of 680 FICO score.
  • Can not buy a second home if a foreclosure is within this time line.



Deed-in-Lieu of Foreclosure DU 8.0

  • If Deed-in-lieu of foreclosure is reported within 4 years on the credit report it will get a refer with caution.
  • DU 8.0 will determine if the credit report is reporting a deed-in-lieu of foreclosure from specific remark codes issued by the credit bureaus. 
  • DU 8.0 will determine if a deed-in-lieu of foreclosure is over 4 years old but within 7 years will get a ineligible if the LTV is greater the 90% for a purchase of a principal residence.


Bankruptcies in DU 8.0

  • Chapter 13 will require 24 months from discharge date as reported on the credit report. If Chapter 13 is dismissed within 48 months and if filed but not discharged or dismissed within 48 months will recieve a REFER with Caution.
  • DU 8.0 will not be able to determine if there are multiple bankruptcies and will instruct clients to refer to specific guidelines from lenders.


DU 8.0 Expanded Approval


  • DU 8.0 will issue EA-I, but will no longer issue EA-II or EA-III. (these were higher risk ratings on previous DU versions)


Mortgage Insurance DU 8.0

  • Reduced and Low Cost Mortgage insurance is being eliminated as well as Mortgage Insurance for Manufactured Homes.
  • New Minimum Mortgage Insurance will be expanded with new pricing Loan Level Pricing Adjustments (LLPA) will be charged.
  • Mortgage Insurance will now be able to have the Mortgage Insurance financed either one time upfront charge or a split charge with upfront and monthly fee.

While there are other changes within DU 8.0 the changes are related to how secondary income and assets will be calculated and verification of employment will be done based on whether self employed or W-2 employee.


         Kenny Salame                                                                                                  Equal Housing

Kenny Salame
Senior Loan Officer
All Western Mortgage Inc.
8345 W. Sunset Rd.
Suite 380
Las Vegas, NV, 89113
Mobile: 702--506-3301
Direct: 702-947-0609
Office: 702-369-0905
Fax: 702-952-0887
Comment balloon 1 commentKenny Salame • December 10 2009 10:22AM
Las Vegas MTG Report: DU 8. 0 changing the Mortgage landscape!
Las Vegas MTG report: DU 8. 0 Changing the mortgage landscape on 12/12/2009 DU 8. 0 will be released on 12/12/2009 to update the credit risks and assessment changes that have been implemented over the last several months from Fannie Mae. The DU… more
New FHA Proposed Changes already being announced from Lenders!
On December 3, 2009 I wrote an article about FHA Secretary Shaun Donovan testimony on current FHA changes that are now in place and new FHA proposed changes being announced by lenders in advance of any FHA changes. Yesterday three lenders announced… more
FHA proposed changes and how it might affect The Market in Las Vegas,…
On December 02. 2009 Secretary Shaun Donovan testified in front of House Committee on Financial Affairs on how it is going to protect the Federal Housing Administration with past, current and proposed FHA changes to keep FHA financial health in… more
Las Vegas Purchased single family homes in Las Vegas, Nevada by zip…
Here are the latest statistical information on Las Vegas single family homes in Las Vegas, Nevada by zip code that closed in October, 2009. The information is provided by Old Republic Title. While this is only one segment of the market the other two… more
Frustations of Las Vegas First time buyers.
Las Vegas first timers buyers are desperately trying to find a home they can call their own. The Las Vegas first time buyers are seeing a small pool of available homes as the bank owned properties has stayed around 2, 000 homes for the last month. &… more
Short Sales in Las Vegas, Nevada no longer a Niche Market!
Review Journal article written by Hubble Smith I would like to comment on the article on Shorts Sales in Las Vegas, Nevada is no longer a Niche Market. It is interesting that there has been a increase in the number of closings of short sales… more
Option ARM's and what affect will it have in Las Vegas, Nevada…
CNNMoney Article By Les Christie: Option Arms: A poison Pill for homeowners This is a comment about a article today in CNNMoney about Option Arms and what the affect it will have on the Las Vegas, Nevada housing Market. CNNMoney… more
Giving Thanks on Thanksgiving Day in Las Vegas, Nevada
Tomorrow we give thanks on Thanksgiving Day in Las Vegas, Nevada for the sacrifices from those that first came here in hopes of a better life and freedom from persecution. While Thanksgiving Day is a special day where we celebrate with food… more
Building a Niche Market in Las Vegas, Nevada
Building a Niche Market in Las Vegas, Nevada can come from some unexpected sources, let me explain. About four months ago I met with two gentleman at one of my Realtor's office thinking I was going to take an application. I did get some information… more
How do you buy a Bank owned Property in Las Vegas, Nevada!
How do you buy a bank owned property in Las Vegas, Nevada While this question may seem strange to some that read this, the more I deal with the REO managers and Asset Managers the more I have to ask this question. How do you buy a bank owned… more