Sure it's a lot more complicated than it used to be, but it's also SO much more equitable. EVERY other agency treats a short sale, a deed-in-lieu, and a foreclosure all exactly the same, and they're NOT! Read how Fannie's new rules make a huge difference, especially in today's market.

Revised! Prior Foreclosure, Short Sale, Deed-in-Lieu, Bankruptcy Rules
(Fannie Mae Announcement 08-13, June 13, 2008)

What does any red-blooded American do when they can't sell their current home and they're ready to close on a new one? Rent it, of course! No more. Unless the borrowers have a 30% equity position, they must qualify for both payments. AND, they need substantial cash reserves, an authentic lease, and to validate the legitimacy of the lease - they need proof of security deposit from the new tenant. Read update on 2^nd homes and what Freddie Mac says about it!

Purchasing a New House without Selling Current Residence
(Fannie Mae Announcement 08-13, June 13, 2008)

Nothing huge here, but it's worth knowing and reading the few interesting habits that will affect your loans.

Miscellaneous: Underwriting IO; Median Income for MCM; New 1008
(Fannie Mae Announcement 08-13, June 13, 2008)

Yes! DO/DU underwriting translates to more jumbo loan approvals! What's even better is that Fannie's pricing has also improved over time. It's ironic that the closer we move to the jumbo-conforming expiration date (12-31-08), the more viable the product becomes.

DU Underwrites Jumbo-Conforming, More Approvals
(DO/DU Release Notes, June 16, 2008)

Did you notice that 1/3 of all FHA buyers' down payments were funded by a DAP in 2006? For the first five months of 2008, the percentage is over 37%. The question is whether or not elimination of DAPs will eliminate 37% (or so) of the FHA purchases? Ouch!

If you are involved in FHA purchase transactions, this will impact your business. Make your comments (www.Regulations.gov) and pass the word.

DownPayment Assistance Programs
(Federal Register: June 16, 2008 (Volume 73, Number 116)
Standards for Mortgagor's Investment in Mortgaged Property)

Last month I reported on FHA's new risk based mortgage insurance premiums per the Federal Register Notice. Knowing how karma works, FHA wrote a much more comprehensive Mortgagee Letter the day after it was published. To keep the information all in one place, I took the original text from last month and incorporated all of the new data throughout. I also did a handy-dandy, quick reference chart free to subscribers.

Risk Based Mortgage Insurance, The Comprehensive Story
(FHA Mortgagee Letter 2008-16, June 11, 2008)

HUD finally broke down and admitted that there is an actual law that allows non FHA-approved brokers to "assist" with FHA loans! Read what HUD finally has to say, with real answers and precise instructions.

Non FHA-Approved Brokers - The Final Word from FHA
(FHA Mortgagee Letter 2008-17, June 20, 2008)

I can't believe all of the mis-information and hoopla this is causing. Rumblings all over assert that FHA's entire 90-day ownership period was totally waived, and it is SO not true. Lenders are acquiring properties by negotiating a deed-in-lieu rather than foreclosing. This means that the waiver applies to foreclosures, deeds-in-lieu, and any other means that a "mortgagee" may use to acquire the property from the owner.

Property Flipping 90-day Rule Change - The Real Information
(Waiver of Requirements of 24CFR 203.38a(b)(2), June 9, 2008)

Can MIP premiums get any more complicated? Subscribers can download all of the new rules on a one-page Risk Based Premium Reference Chart. Print and keep it handy because it will instantly help you when meeting with clients.

Streamlined Refinances, MIP and More
(FHA Mortgagee Letter 2008-16, June 11, 2008)

Aghhh! Did I say that you can't squeeze blood from a turnip? If you go back to the questions from last month's “FHA No cash-Out, What Has Happened to this Program?” I don’t have all the answers. But I have a few, along with some new twists.

The ability to add a non-occupant co-borrower to any 85% cash-out transaction is fantastic! Use it!

Part II, FHA Refinance Saga
(FHA 2008-13, May 7, 2008)

You're referring to The Home Valuation Code of Conduct (subscribers can download), a code that was adopted on March 3, 2008 by Both Fannie Mae (subscribers download Lender Letter 08-01) and Freddie Mac (subscribers download the e-mail notification). As it stands, lenders must comply with the Code effective with all loan applications taken on or after 1-1-09.