Countrywide changes underwritting rules

This caught me by surprise. Just wanted to share with you guys.

Investor cash-out refi:

  • they will use the lower value of the sale price or appraisal, unless home has been held for more than 1 year.

No longer can you buy using cash then refinance next week - and get all/most of your cash back.

Many other lenders will still use appraised value. As long as Fannie keeps buying them they will be available. Bank of America had that same seasoning rule so I am sure they are just overlapping the Countrywide with the more stringent BOA guidelines.

I work for a very large bank and can do without title seasoning on cash purchases…just funded one today with new appraisal even though cash purchase was 30% of market value 4 months ago. Must be lending to business entity minimum 50k at 65% max LTV.