Countrywide continues to tighten its lending guidelines as investors stay away from its securitized loan offerings on the secondary market. In fact, the majority of Countrywide fundings have been financed by the Federal Home Loan Bank – causing Senator Schumer to call for an investigation in to the transactions. In an effort to improve the saleability of their loans and to increase the quality of loans originated Countrywide is making wholesale changes to its lending guidelines. Of particular interest are the elimination of the No Income No Asset (NINA) loans and the No ratio products for both Alt-A and Jumbo loan products.
From the Company to brokers:
Due to Agency guideline revisions, CAWL is implementing the following changes effective midnight (pst) Monday, December 10, 2007.
æ Expanded Criteria (Conforming ALT-A) Guideline Changes
- No Ratio & NINA Doc Types Eliminated
æ Expanded Criteria (Jumbo) Guideline Changes
- NINA Doc Type Eliminated
- No Ratio Doc Type Guideline Changes
- Max Loan Amount reduced from $1,500,000 to $1,000,000
- Minimum FICO increased from 680 to 700
- Max LTV reduced from 80% to 75%
- Cash-out eliminated on 3-4 Units & Second Homes
- Available only on Fixed Period ARMs (including 10-Year Interest-Only)
There’s more changes – but these are the big ones. Amazing that just now – closing in on 2008; Countrywide is finally eliminating the most dangerous of the no-document loan types. They are just asking for continued trouble well in to the next decade (if they’re even around).
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