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1. the complainant improperly used the term 'annuitize' which isn't what is actually done at all, and which has thrown this board for a loop... there is no annuitization involved (not directly, nor imputed by underwriting considerations.)

Unfortunately, the word used in underwriting guidelines is "annuitize."

How Retirees Can Avoid Refinancing Troubles
Lenders are rejecting retired homeowners who want to refinance at today's attractive rates. But there are ways to combat this growing trend.
http://www.nextavenue.org/article/2012-07/how-retirees-can-a...

Fortunately, there are two ways you may be able to avoid being turned down for a refinancing if you’re retired.

Look for a lender that will annuitize your assets. Both of the two largest sources of mortgage money — Fannie Mae and Freddie Mac, who buy or guarantee loans made by many banks and other lenders — have procedures allowing loan officers to factor retirement assets into underwriting decisions.

For example, Fannie Mae lets lenders essentially annuitize the retirement fund assets of applicants over 59 1/2, turning them into the equivalent of income sources for prospective refinancers. Freddie Mac approves loans under similar guidelines.

***

In the situation I encountered, the applicant was not of retirement age, so his assets could not be annuitized.
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