Fannie Mae underwriting guidelines are guidelines that state which mortgages are acceptable for packaging by lenders in preparation for sale to Fannie Mae. It is a common practice among lenders to package bundles of mortgage loans and sell them to companies like Fannie Mae while still retaining the servicing of the loans.Fannie Mae purchases bundles of conforming loans from lenders. Conforming is
. a word used to describe loans that follow the Fannie Mae underwriting guidelines. Underwriting is a process that involves reviewing all aspects of the application and making sure that the loan is acceptable for funding. Some aspects which are reviewed during underwriting are the income of the applicant(s), the amount of the loan being applied for and the employment history of the applicant(s). The applicant's net worth and credit rating are also examined.Other items are also included within the underwriting process, but exactly what information is accessed and reviewed is up to the individual lenders. Each lender has its own underwriting guidelines, as does Fannie Mae. If the mortgage loan meets these underwriting guidelines, then it is eligible to be sold to Fannie Mae.Oftentimes lenders use automated underwriting programs, which means that all mortgage loan applications taken in by that lender are then run through a computer program which compares them to the preset guidelines. Human underwriters are kept on staff to take a final glance at these applications before the loan goes to closing. Underwriters may also perform a second review of denied applications upon the request of the borrower.Underwriting is a process designed to ensure that a potential borrower is likely to pay the loan back. All the aspects of underwriting, such as income, credit score, and employment history, are used to predict the likelihood of timely payments if a loan is granted.Find more information on Fannie Mae underwriting guidelines at the links listed with this article. More reference links: http://avenue-s.us/freddie_mac_and_fannie_mae_underwriting_comparison_guidelines.pdf https://www.efanniemae.com/home/index.jsp
