What are the TOTAL Mortgage Scorecard Tolerance Levels for Rescoring?

The Lender must rescore a mortgage when any data element of the mortgage change and/or new Borrower information becomes available.  The Lender is NOT required to rescore a mortgage if the following data elements change from the last scoring event within the described tolerance levels:
• Cash Reserves – verified cash reserves are not less than 10% below the previously scored amount
• Income – verified income is not less than 5% below the previously scored amount
• Tax and Insurance Escrow – the cumulative monthly tax and insurance escrow does not result in more than a 2% increase in the total payment to effective income ratio (PTI). 

For additional information see Handbook 4000.1 II.A.4.a.vii. available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04503