For conventional loans, Citi’s policy around earnest money deposits has been rewritten to mirror Fannie Mae and Freddie Mac policy: “when an earnest money deposit is used as part of the borrower down payment it must come from the borrower’s own funds and the source of funds must be verified. Refer to the Manual for a list of acceptable forms of verifications.” Citi clarified its position on Texas first mortgage and non-equity loans, and VA refinance definitions (IRRRL’s, cash-out, and “other”). Its bulletin goes on to tweak/clarify/address Fannie’s LQI, underwriting for individuals employed in a family owned business, business funds, Texas and natural disaster appraisal requirements, income documentation (”All income used to qualify must be documented in the loan file wherever the underwriter’s rationale and reason supporting their loan decision is documented”), its “Appraiser Ineligible List”, and the required scrutiny of any new additional credit requests by borrowers.
-Rob Chrisman
