Underwriting Assessment Matrix Changes

last updated on Thursday, November 12, 2020 in Business News

As part of collateral verification, the Federal Home Loan Ban of Des Moines (the Bank) reviews the underwriting for pledged loans. Preferably, all loans are fully documented to market expectations. However, not all loans meet this preference. Via the Underwriting Assessment Matrix, the Bank is able to provide lendable value to less than fully documented loans at an appropriate discount.  

These underwriting factors, and the discounts assessed are periodically reviewed. As of October 5, 2020, the following changes were made to the Underwriting Assessment Matrix:

  • A 10% discount is applied to loans where the debt obligation is evidenced by a lost note affidavit (LNA). LNAs are permitted in certain situations subject to the requirements of the Lost or Destroyed Note Guidelines.
  • The discount for lack of attorney opinions or title insurance lien verification was changed to above $250,000.  Previously, the threshold was $250,000 and above. This is a technical correction.
  • The threshold for non-appraisal valuation types was raised to $400,000 for 1-4 family mortgage loans. This is commensurate with the recent change in the appraisal threshold by the primary regulators. 

As always, pledged collateral must comply with all federal, state and local laws, as well as regulations, including repayment ability and property valuations for select loan types.

View the revised Underwriting Assessment Matrix for more information.