Mortgage Market Minute: Thomas Crate, CA DOC, NMLS #332624 (Mountain West Financial)

LQI is Fannie Mae's "Loan Quality Initiative." Fannie Mae buys loans from lenders and consolidates them into mortgage-backed bonds for investors to purchase. As such, Fannie Mae wants to make sure that every loan it buys meets its basic standards in order to insure the quality of its bonds. The Loan Quality Initiative requires lenders to re-verify the Borrower's credit profile just prior to closing and to look for changes. Although your credit was pulled at the start of the application process, Fannie Mae wants your lender to pull it again just in case something changed. Some of the changes they are looking for include: •Did you add any new debts while your loan was in-process? •Did you apply for new credit cards while your loan was in-process? •Did you run up existing cards while your loan was in-process? •Did you finance an automobile while your loan was in-process? •Did you make some other major purchase while your loan was in-process? Fannie Mae's Loan Quality Initiative does not apply to FHA loans, USDA loans, VA loans or jumbo loans, however, it's still critical to keep your credit clean while your loan is in-process or your loan may be subject to a delays, and, in a worst-case scenario, a loan application denial.