Loan Quality Initiative
In response to Fannie Mae’s LL 2010-03, we will be implementing guidelines and procedures to ensure compliance with LQI. This will be a work in progress. Expect fine tuning along the way. This applies to loan applications taken on or after June 1st and will only apply to conventional conforming loans.

Undisclosed Debt
We will be doing a soft pull credit report during the 24 hours prior to closing. If there is significant change to balances or additional credit we would then need to rescore and run through the AUS system and reevaluated by underwriting. This could affect pricing and/or approval. Please advise your borrowers at application (click HERE to view borrower form, suggested but not mandatory).

Updates to Social Security Number Requirements
For loans that receive red flags for SS# verification through fraud prevention software and or DU/LP, the accuracy of the SS# must be validated directly with the Social Security Administration using Form SSA-89 or direct validation by a third party.

Validation of Qualified Parties
Loans originated, underwritten or serviced by individuals or companies that are on the Federal General Administration’s (GSA) Excluded Party List or HUD’s Limited Denial of Participation (LDP) list are ineligible.

Occupancy Requirements
For Owner-occupied transactions, documentation to confirm the applicant’s intent to occupy as their principal residence is required if there is any address discrepancies or recent transactions for other properties that were identified as principal residences.

Recent Inquiries
As a result of credit inquiries, the loan may be subject to additional requirements. If additional credit was obtained, a verification of the debt must be provided and the borrower must qualify for the rate, terms and approval again. The verification can be achieved through a direct verification with the creditor of use of a credit supplement.

This gives you an overview of what to expect. We will update and get into more details as we work through this. Getting a mortgage will not be for the faint hearted. Please be proactive with your customers, and make sure they don’t jeopardize the transaction with additional credit.

Please contact your Account Executive with questions.

Primary Capital is changing its policy as it applies to the Compliance Underwriting Department.

With regards to the GFE Borrower Acknowledgements, we will no longer require the borrowers to sign and return the borrower acknowledgements sent to them by Primary Capital. Instead, we will use an internal report that shows when the borrowers picked up the email attachment or when the documents were U.S. mailed as proof of delivery. In addition, there will be a new disclosure sent in the closing package that the borrowers must sign. Please find a copy of this disclosure HERE

• NOTE: this is only regarding the borrower acknowledgements of GFE. This does NOT mean that the Borrower Requested Changed Circumstance forms do not need to be signed by borrower and submitted to Primary Capital.

Primary Capital has created an online Changed Circumstance form that simplifies which fees can increase with each specific changed circumstance. Once you select the type of changed circumstance you have encountered, it will only provide the options of the GFE boxes that can increase with respect to that change, as well as any fees you wish to decrease. This is designed to reduce errors. To access it, please go to www.pcmexpress.com in the My Loans section. Once you select your loan number, choose the option to complete a GFE Changed Circumstance Request. Once you have completed this form, print it out, have borrower sign (only if borrower requested changed circumstance) and submit via the loan's Blitzdocs Folder. Please start using this form immediately. Once the changed circumstance form has been processed by Compliance Underwriting, the first available close date will be 24hours.

All loans will now go through the Compliance Underwriting Department PRIOR to being submitted to Underwriting. We need to insure that all files are within compliance prior to being fully underwritten. Please note that this may take up to 48 hours for initial review.

Primary Capital has updated our underwriting conditions sheet to have separate compliance underwriting conditions, as well as a new section that lists all missing disclosures. Also on this new conditions sheet, you will notice the "Can't Close Before" date at the top of the page. This date is the latter of 1st Close TILA, 1st Close CC and 1st Close HVCC dates. Your loan cannot close prior to that date.

RD has reversed their decision from last week to issue "subject to commitments." This morning, Primary Capital was informed that RD will not be issuing these commitments, and loans will not be underwritten until (1.) the bill passes congress or (2.) we reach the new fiscal year (in September).

What does this mean for us? All of the existing funds are exhausted, so if a USDA loan does not already have a firm commitment, we will need to switch the loan program.

We will be removing USDA from the rate sheets and lock system until new funds are secured. The best way to "help" in speeding up the process to get more funding is to contact your local Representative in the House and your two Senators.

Please contact your Primary Capital Representative with questions.