Miscellaneous Underwriting Requirements
All Conventional and Government loans must have automated approvals from Desktop Underwriter (DU), or Loan Product Advisor (LPA). Manual underwriting is permitted only when indicated on the Product Profile. In all situations where a lender is obtaining an AUS decision, PennyMac must have the actual AUS findings and cannot accept another investor’s AUS system findings.
The data submitted to DU or LPA, must reflect the loan as it was closed, including occupancy type, product type, amortization, loan term, property type, loan purpose, sales price, and appraised value. The terms of the closed loan must match the terms of the final loan casefile submission in DU, or LPA, as applicable.
For the Non-Conforming Non-QM program, the decision must reflect Approve/Ineligible (DU) or Risk Class Accept with Purchase Eligibility as Ineligible (LPA) due only to loan amount.
Property Accessed Clean Energy (PACE) Loans
Certain energy retrofit lending programs, often referred to as Property Accessed Clean Energy (PACE) programs, are offered by localities to finance residential energy improvements with loans that are generally repaid through the homeowner’s real estate tax bill. These loans typically have automatic first lien priority over previously recorded mortgages.
Since 2010, the Federal Housing Finance Agency (FHFA) has taken the position that energy retrofit programs, such as PACE programs, which permit the imposition of a First Lien priority, "pose unusual and difficult risk management challenges for lenders, servicers and mortgage securities investors," and change customary lending priorities.
In accordance with Fannie Mae, and Freddie Mac guidelines, PennyMac will not purchase mortgage loans secured by properties with an outstanding PACE loan.