“Un-Sourced” Deposits On Bank Statements – Less of a Pain Now

Reminder: The Fed is still buying $1.6 billion of mortgage-backed securities every day. With overall mortgage volume down, this enormous “artificial” demand by the Fed is also what is keeping rates low (not just a weak economy).

After the 2008 “meltdown,” Fannie and Freddie went overboard with their demand for minute conditions that often frustrate and confuse borrowers.

One of the best examples of a time-wasting requirement is “paper-trailing” or explaining large deposits. Underwriters often forced borrowers to explain or “paper-trail” deposits as small as $250, and some bank statements had large numbers of such deposits.

Fannie Mae just (finally) made this ridiculous condition much less onerous.

A “large deposit” is now defined as one that exceeds 50% of borrower’s gross income. This is an enormous improvement that will save everyone a tremendous amount of time.

This may seem minor to someone outside the mortgage industry, but for those of us in the industry, this is one more indication that underwriting standards are getting better and better.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646