Overlay: Extra crap (rules/requirements) mortgage lenders put on top of already existing guidelines from FHA, Fannie Mae, etc.

I do not need to-nor would, since that exceeds my license. I also do not explain taxes, law, insurance or comment on school districts...all are violations of my license.

I'm with Kat, she's got it.

I do not.

Overlays are basically loan requirements over and above what a lender normally accepts. 

This is important because lenders assess risk differently. For example they may quote your buyer a good rate but require them to have a lower debt to income ratio than a competing lender.

I read your blog earlier today so I am well informed.  Thank you for providing this valuable information.

Questions like your's, Khash Saghafi,  are why I, an ex-banker, refer mortgage questions to mortgage professionals.

It would be something that over lays the loan.

Never heard the term. Just like loan officers never heard about water rights in Utah

Sorry, not in my wheelhouse.

After reading your blog I can now!

I could.  However, that is not my job. Not my circus. Not my monkey. That is the lender's job and I would not step into explaining what I do not own. 

I know DO understand it, and everyone should checkout your blog post with a detailed explanation....

I'm with Kat Palmiotti and I'm betting we're going to get another great blog from you on this topic, Khash!

Each lender has their own ability and willingness to handle risk so they each have their own set of "overlays" (requirements) in addition to already established Federal Guidelines. 

Its not my job to know so I dont

I do not.

My involvment in lending reqirements begins and end with the 36%. After that it belongs in someone else's wheelhouse where the dream lives or dies.

Thanks for asking the question I don't mud with the lender but it is good to know what Overlay charges mean.

I certainly can't, but given the complexity of lending these days I don't even go into those issues with my clients. What I do is refer them to the top lenders in my area.

  I will summarize it for my clients, but I am sending them to Lender Khash Saghafi for a complete explanation.

Kat Palmiotti got it in one - and "crap" is right LOL

well I can explain it, but I don't.  I stay in my own lane and let the loan officers explain their rules... 

After reading your blog post I can now Khash...

Kat knows this well.

I do not explain such things to buyers. It is up to the loan officer to discuss it

I have been very familiar with underwriting overlays for years and explain it to my clients as some lender have added rules for qualifying that are over and above Fannie Mae requirements which may make it harder to get qualified. With that said I know the lenders in my area that have more overlays and those that don’t. You can bet who I try to stay away from. 

When it comes to the "world of lending" I refer to the experts in that arena. 

Tolerance. I was told Feds will relax the requirements on lending to no name banks let them have more control.

Each bank has its own credit standards.

Never had it come up as a question from buyers. May have suggested a specific lender over the years to those on the fine line between acceptance and rejection 

Hopefully none of them - that's up to a lender to explain

additional requirements per each lender

This would be outsourced by me...

Good to bring this up and is a reson why once you have confidence in a particular lender you are hesitant to recommend someone new.

Wells Fargo used to have more overlays, but have gotten better.

As a formerly licensed Mortgage Lender for 13 years, I can.  Fannie Mae & Freddie Mac say yes, XYZ bank says not yet, we need more documents, and more documents and more documents....then still maybe/maybe not. 

Not me, Khash Saghafi. 

Kat Palmiotti has it

Kat said it right!