New Computerized FNMA Qualification Rules Are Ridiculous !!!!

The new computerized rules used by FNMA to determine if a borrower is qualified for a mortgage is ridiculous as they do not take into consideration the borrowers other liquid assets and only look at their income to debt payment ratio.

I have a client who is right on the border of FNMA’s requirement of no more than a 45% debt payment to income ratio. They pay off their credit cards every month, and have over $500,000 in liquid assets. When their mortgage broker ran their credit check, even though they pay off their credit cards every month, FNMA included the minimum credit card payment in the calculation of their income to debt payment ratio. This put them just over the 45% ratio even though they have liquid assets of over $500,000 !!!

In addition, for self employed people, they will only look at tax returns for the last 2 years, and even if they had increasing income, they average the two years income. They also will not look at net income for the current year, even if their revenue to date is equal to their entire revenue for last year.

There should be some sort of human review or appeal to these guidelines when such an obviously qualified couple does not qualify for a loan to be sold to FNMA even though they are clearly qualified and able to service the loan.