DU Version 7.1 April 09 Update:

Starting April 4, 2009, the DU Refi Plus will take effect
with some of the new enhanced features:

LTV of 80% or less will not be subject to a minimum FICO of 580.

For high balance mortage, of 80% or less, not subject to min 680.

O/O 3-4 units will go up to 80% LTV/CLTV/HCLTV.

O/O 2 units will also go up to 80% LTV/CLTV/HCLTV.

2nd homes and co-ops will go up to 80% LTV (no seconds allowed)

Investment properties will go up to 80% LTV/CLTV/HCLTV.

REDUCED DOCS FEATURES:

Salary/bonus/overtime for wage earners: 1 current paystub plus
a verbal VOE.

Commissions/Self-emplohed: One-year federal income tax return.

APPRAISAL WAIVERS:

DU will accept the value submitted as the market value for the
subject property on limited cash-out refi transactions where
the existing loan is owned by Fannie Mae. No appraisal or
even drive-by appraisal is required if the DU Refi Plus
Property Fieldwork Waiver is exercised by the lender.

So this is very interesting.  I would likely qualify to refinance under these new provisions (where I currently cannot), if there were a lender that would do a loan under these requirements. [Note: just because FNMA says it will accept these loans, no lender is required to make them.]

Jury is still out on whether this will be a huge boost, but it should make a positive difference.  Color me tentatively encouraged.

This is welcome news for those that need that kind of help – self-employed people – but I cannot help but think that this is exactly the sort of behavior that got us in trouble in the first place.  I suppose it’s possible that this letter is in response to banks’ pressure to ease FNMA restrictions, because they have money to lend but can’t lend it if the loan is outside the currently draconian FNMA rules.  It’s possible.  I really hope it’s the case.

But I wonder.  FNMA is now entirely owned by the government, and this government has already shown itself to be exceptionally willing to throw vast sums at problems that money by itself is not likely to solve.  This could go the way of the Help for Homeowners FHA loans, instated by the government to help people who are behind on their mortgages.  Unfortunately, banks looked at those loans and refused to make them.  So the program is gathering dust on the shelf.  This relaxation of FNMA rules may be a similar thing.

We’ll see.