MPF® Traditional Training:Iowa Bankers Mortgage Corporation

Training Courses  
Originating & Underwriting

Underwrite the Loan

The loan is ready for underwriting!

Once a package with all processed verifications and documentation is completed, the file is sent to the underwriter. The underwriter is responsible for determining whether the package is deemed an acceptable loan by analyzing the 5C’s of underwriting.

For manually underwritten loans: follow the underwriting and eligibility guidelines of the MPF Traditional Selling Guide.

  1. Capacity:

    How much can the Borrower afford?
    Consider: DTI, Cash Flow, Occupation, Employment History, Income Stability, Timing of Repayment, Continuance, etc.

  2. Capital:

    What will the borrower invest and have for reserves?
    Consider: Checking/Savings, Investments, Liquidity, Cash for Close, Reserves, Overdraft/Non-sufficient Funds, etc.

  3. Collateral:

    In the event of a default, what is the property worth?
    Consider: LTV, Marketability, Appraisal Discrepancies, Liens, Easements, Judgments, etc.

  4. Conditions:

    What are unique factors surrounding the loan?
    Consider: Market Conditions, Loan Purpose, Use of Cash Out (if applicable), etc.

  5. Character:

    Will the borrower repay the loan?
    Consider: Borrower Attitude, Payment History, Credit Score, etc.

Your Responsibilities

  1. Underwrite the loan using either an Automated Underwriting System (AUS) or manually.

    • For loans underwritten using Fannie Mae’s Desktop Underwriter® (DU®) or Freddie Mac’s Loan Product Advisor (LPA) automated underwriting system, follow the AUS feedback requirements for the applicable GSE and not the manual underwriting guidelines of the MPF® Traditional Selling Guide. (MPF® Traditional Selling Guide 4.2.1 through 4.2.1.2.7)
    • The only MPF program requirements that supersede DU and LPA requirements are the following:
      • Fannie Mae: must use DU, DO is ineligible
      • Must receive Fannie Mae DU approve/eligible or Freddie Mac LPA accept
      • Maximum LTV: 95% (MPF Selling Guide 2.4.2)
      • Minimum FICO: 620 (MPF Selling Guide 5.10.1.2)
      • Maximum DTI Ratios (MPF Selling Guide 5.14.1.3)
      • Occupancy requirements: Primary Residence or Second Homes (MPF Selling Guide 6.2)
      • Property type eligibility (MPF Selling Guide 6.1.1)
      • Products or loan attributes on the ineligible list (for example: Co-ops are not eligible under the MPF Program)(MPF Selling Guide Chapter 2.7)
      • AUS ineligible attributes regarding manufactured homes (MPF Selling Guide 6.8.2)
      • Full interior/exterior appraisal, or a DU or ACE LPA eligible appraisal waiver if MPF Program requirements for waivers are met (MPF Selling Guide  4.2.1.1.2)
      • AUS mortgage loans originated with reduced MI are ineligible for delivery to MPF. "Custom" MI mortgage insurance coverage for LPA and lower cost mortgage insurance coverage for DI are not eligible for delivery to MPF. (MPF Selling Guide 9.2.4)
    • Loans underwritten using AUS receiving an ineligible due to an AUS guideline that would be MPF eligible, contact the FHLB Des Moines. (To confirm it is acceptable to MPF. Document the date and name of the individual you spoke with.)

  2. Determine if the loan meets all of the documentation and eligibility requirements of the MPF® Guides and IBMC.

    • This includes all approval conditions generated on the feedback report (if using an AUS) or any additional conditions the underwriter may require.
    • If more information is needed, the borrower is contacted to supply more information and/or documentation.
    • If the loan is acceptable as submitted, continue on with the next steps in the loan process.
    • IBMC's minimum loan term is 120 months.
    • IBMC services loans in the following states: AZ, CO, IL, IA, KS, MO, MN, NE, ND, SD and WI.

  3. Traditional Government Lending

    • Follow the applicable Government Agency underwriting guides. 
    • For a Government Streamline Refinance, you must collect the income to be included in the loan presentment (interactive or batch), even when not required by the Government Agency for qualifying purposes. 
    • Review the MPF Traditional Guide chapters 2.8, 4.3, 9.1 and 14.2.
    • Review the IBMC Concurrent Sale Manual for any specific requirements. 

Tip: For additional Underwriting training, please view our on-demand MPF Traditional: Product Eligibility & Underwriting webinar or register to attend one of our Live Webinars!