| FHA Delays Implementation of ML 2009-28 - Appraiser Independence and ML 2009-51 - Adoption of the Appraisal Update and/or Completion Report (Effective 2-15-2010) — January 2010
There was no official “document” issued, so don’t waste your time looking for it. I have attached a copy of the email text in case you need it. Keep an eye on your investor’s policies regarding the appraisal update form so that you don’t end up with a loan that FHA will insure but your investor won’t buy.
(HUD Letter RE: ML 2009-28 & MC 2009-51 – December 22, 2009)
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| FHA Short Sales and Short Pay Offs - New Credit Policy - ML 2009-52 (Effective 12-16-2009) — January 2010
While the language of this letter leads you to believe that a short sale would have to be a previous event to have impact on the current file, think again. What’s really scary is that you probably won’t know this until you have the HUD Settlement Statement from the sale of the home. You may want to make it a practice on purchase applications to ask borrowers, flat out, if they are selling their current primary residence as a short sale.
(Mortgagee Letter 09-52, Short Sales and Short Payoffs, December 16, 2009.)
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| FHA Issues FAQs on the New FHA Condominium Approval Process – ML 2009-46A & ML 2009-46B. [15-Page HUD FAQ Included] — January 2010
15 pages of FAQs: Not much of the fog has lifted after reading it. These FAQs do say, “FHA will not provide a checklist.” So it’s up to each lender to decide how they will review the project to feel comfortable certifying to HUD that the project is still in compliance. The last 4-1/2 pages have some interesting facts about Site Condo’s.
(FHA Mortgagee Letter 2009-46A & 2009-46B)
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| FHA RESPA and FHA Related Policies - The 1% Origination Cap is Gone - ML 2009-53 (Effective January 1, 2010) — January 2010
If RESPA changes are the final blow-- swaying you to consider a simpler career path, say neurosurgery or something, you are not alone. I have to vent for a minute…read my story…because this is how I envision your explaining the GFE to your borrowers will occur.
(Mortgagee Letter 09-53, Real Estate Settlement Procedures Act (RESPA) and FHA Related Policies, December 30, 2009)
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| FHA Adopts Appraisal Update and/or Completion Report (Fannie Mae Form 1004D / Freddie Mac Form 442) – ML 2009-51 (Effective January 1, 2010) — December 2009
Folks at HUD are sleeping better at night knowing that once again they’ve “righted a potential wrong” and protected the consumer from harm. Well dream on people. Do not plan on ordering Appraisal Updates on your expired FHA appraisals until you know if your investors will accept them. Better to prepare your borrower for the cost of a second appraisal and disclose the higher cost up-front.
(Adoption of the Appraisal Update and/or Completion Report (Fannie Mae Form 1004D / Freddie Mac Form 442), Mortgagee Letter 2009-51, December 7, 2009)
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| FHA Gives Relief from Second Appraisal Requirements – ML 2009-48 (Effective 11-18-09) — December 2009
Great news! Not often do we get told to lessen documentation requirements. This second appraisal was digging into your profits and processing time….so good riddance! But wait, you are required to order a 2nd appraisal if home is being resold with 91 to 180 days of purchase by the seller.
(Second Appraisal Reporting Requirements Mortgagee Letter 2009-48, November 18, 2009)
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| FHA Maximum Loan Limits for 2010 - ML 2009-50 [Includes Mortgage Talking PointsTM flyer, FHA 2010 Maximum Loan Limits that you can customize with your 5 most common county loan limits for distribution to your Realtors®.] (Effective January 1, 2010) — December 2009
While reviewing this Mortgagee Letter, all I could think was “holy overlapping legislation!” My interpretation below is definitely the “boiled down” version. Print out the ML and take a look at the first two paragraphs. It’ll make your eyes cross. Many areas will have limits that are between the declared “floor and ceiling” which is why you need to go to the link and check your area limits.
(2010 FHA Maximum Loan Limits, Mortgagee Letter 2009-50, November 25, 2009)
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| FHA Condominium Approval Process – Final Rules with Temporary Exceptions [Includes Mortgage Talking PointsTM flyer, New FHA Condo Guidelines: The Life Raft for 2010] (Effective December 7, 2009) [Includes 15-page FAQ Condo Approval Process] — November 2009
This new comprehensive guideline is a huge reprint of Mortgagee Letter 2009-19 plus the new stuff. Use this new version as your guide and throw away 2009-19. Nothing has changed about the fact that after December 7, 2009, we will have to complete lender certifications on each loan that says that we checked for compliance with the current guidelines and the project passes muster. So basically, a project may be on the approved list, but it doesn’t automatically mean you can lend on it.
(FHA Mortgagee Letter 2009-46A: Temporary Guidance for Condominium Policy & FHA Mortgagee Letter 2009-46B: Condominium Approval Process for Single Family Housing
)
Supporting Resources:
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| FHA Offers Half-Price Homes! Good Neighbor Next Door - What a Deal! [Includes Mortgage Talking PointsTM flyer, Half-Price Homes! Good Neighbor Next Door - The Rare Gem.] — November 2009
Good Neighbor Next Door (GNND) is the new name for an old program. Most of you may know it as Teacher Next Door or Officer Next Door. This is one of those programs that you may not work with a lot, but you should absolutely know about in order to be the well-rounded source of knowledge to your clients and realtors.
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| FHA Approves More Non-Profits Deemed Worthy of Helping Homeowners — November 2009
Gotta’ admit HUD has good timing on this one - just ahead of the expected extension of the Home Buyer Tax Credit and after they issued Mortgagee Letter 2009-15. But the elephant in the room hasn’t left.
(Update on Eligibility Requirements for Nonprofit Instrumentalities of Government Seeking Placement on the Federal Housing Administration Nonprofit Organization Roster as Providers of Secondary Financing
FHA Mortgage Letter 2009-38, October 8, 2009)
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| FHA Mortgage Insurance Premiums (UFMIP) Remain Unchanged — November 2009
FHA did announce, although very quietly, that the current moratorium on risk-based premiums that was supposed to expire on September 30, 2009, will continue. Be aware and know that our FHA MIP Reference Chart is still accurate.
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| FHA Online Handbooks – Available Again — November 2009
Back in May, FHA announced that it had posted the new online version of 4155.1 and 4155.2. The site worked for about 40 days and then went down. Anyway, just want you to know that if the FHA version goes down again, you have a backup.
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| FHA New Streamline Refinance Worksheet - Your Complete One-Page Resource! — November 2009
After writing about Mortgagee Letter 2009-32 “Revised Streamline Refinance Transactions" last month, I decided that a worksheet was in order. No more trying to remember what questions to ask. You will just grab this worksheet and go! For all Case Numbers on or after 11-17-09.
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| FHA Flood Zone Requirements and Responsibilities of FHA Mortgagees & Appraisers — October 2009
This ML is a reminder to lenders and appraisers of their responsibility to determine if a property is located in a Special Flood Hazard Area. With SO MANY new changes I know you are feeling overwhelmed this month, so I want to drop your panic level right from the start: NOTHING IN THIS ML IS NEW.
(FHA Mortgagee Letter 2009-37)
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| FHA Revised Eligibility Requirements for FHA Roster Appraisers (Effective October 1, 2009) — October 2009
Do not count on HUD to be your safeguard against ordering an appraisal from a “non-certified” appraiser. If HUD doesn’t get them pulled off of the list right away and you order an appraisal from an ineligible appraiser you’ll get the pleasure of paying for a second appraisal.
(FHA Mortgagee Letter 2009-36)
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| FHA Revised Streamline Refinance Transaction (Effective November 17, 2009) — October 2009
Your paycheck just got smaller! Let’s face it, this one hurts. And it’s a bummer that everybody’s got to lose out so that we could get the “churners” under control. But like everything else, it is what it is. Please carefully note the effective date on this! I have come across 4 different mortgage newsletter/blogs that have inaccurately stated the effective date for these changes.
(FHA Mortgagee Letter 2009-32)
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| FHA Strengths Risks - Ineligible Participants to HUD Program (Effective May 20, 2009) - Yes, HUD is playing catch-up here. — October 2009
It’s a whole new world open to interpretation on what offenses or business practices may be considered an adverse reflection on your integrity, competence or fitness. Bottom line? Are you worthy enough to do FHA loans? One obscure rule included here: If you are creating your own advertising materials, be sure to clear them with management or your legal department and that “someone” is keeping them for the required two-year period.
(FHA Mortgagee Letter 2009-31)
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| FHA Appraisal Validity Period Changed to 120 Days (Effective January 1, 2010) — October 2009
Declining property values are causing FHA to ‘batten down the hatches’ to protect themselves from future claims. Make no mistake, they do mean “all appraisals”. With appraisals expiring sooner it could mean a slight upswing in appraisal order volume, which would be good news for our appraisers. (Hey, I’m makin’ lemonade here guys…)
(FHA Mortgagee Letter 2009-30)
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| FHA Appraisal Assignment Rule From Lender to Lender - Appraisal Portability (Effective January 1, 2010) — October 2009
This letter HUD specifically states that it’s NOT OKAY for lenders to order second appraisals just to get higher values or to ‘get around’ repairs. Duh!! I get calls all the time from Realtors whose buyers, after receiving a disappointing FHA appraisal, have been told by another lender, “Let me do the loan. We’ll order another appraisal.” Not any more!
(FHA Mortgagee Letter 2009-29)
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| FHAs Version of HVCC - Appraiser Independence (Effective January 1, 2010) — October 2009
I swear when this ML was published I could hear the collective groan from the mortgage industry. At least with these requirements, and the advance warning, your company may have the opportunity to develop your own panel of approved appraisers for assignment rotation and not have to use an AMC. So, how is this different from HVCC?
(FHA Mortgagee Letter 2009-28)
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| FHA - Electronic Annual Certification to Replace Title II Yearly Verification Report (Effective Sept. 1, 2009) — September 2009
Owners and managers, this announcement is all for you. Everybody else be sure that your owner/manager knows about it. The most important part of this ML is the attachment. It is a step-by-step walk through of the FHA Connection screens for completing this process.
(Mortgagee Letter 2009-25, August 24, 2009)
Supporting Resources:
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| FHA Loan-To-Value Matrix (Includes FHA Maximum LTV Chart) — September 2009
Wouldn\'t it be handy if you had an FHA LTV Matrix you could refer to? Purchase transactions and 4 different refi options outlined in this reference chart.
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| FHA - The Deadline is Here! New FHA Appraiser Requirements (Effective October 1, 2009) — September 2009
FHA fired the warning shot in December of last year when they issued Mortgagee Letter 2008-39 Revised Eligibility Requirements for FHA Roster Appraisers. Well, no new extensions have been issued and October 1 is staring us in the face so please take note or you WILL end up with an uninsurable loan along with a plethora of other potential nightmares.
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| A Guide to FHA Loans & Non-Citizen FHA Borrowers - (Includes Samples/Pictures of Approved INS Forms.) — August 2009
What if one or more of your borrowers are NOT US citizens? Can you still give them an FHA loan? If the borrowers are lawful residents….you bet! If they aren’t, you can’t. (And keep reading for a special snafu in community property states.)
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| FHA Major Changes in the Condo Approval Process – Single Family Housing: Brace Yourself for Huge Impact On October 1, 2009! — July 2009
Because FHA financing on condos will come to a screeching halt (December 7, 2009) for a period of time, it is imperative that Realtors understand the importance of moving those condo listings NOW. Get those buyers off the fence NOW. Who knows when the project will get back on the approved list? And spot loans are gone too!
(FHA Mortgagee Letter 2009-19: Condominium Approval Process-Single Family Housing)
Supporting Resources:
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| FHA Closing Costs Paid by HUD - A Boost for 203(K) Loans and the Lenders Who Do Them (Effective June 9, 2009) — July 2009
HUD is trying to “sweeten the pot” for lenders who are willing to do 203(k) loans on a HUD home. The argument could be made that the incentive isn’t high enough because of the extra work that goes into these loans, but it’s better than nothing.
(Notice H 09-04 – Closing Costs Paid by the U.S. Department of Housing and Urban Development)
Supporting Resources:
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| FHA Enhances Energy Efficient Mortgages - Now is the time to Go Green! (Includes Energy Efficient Mortgage Worksheet.) — July 2009
Looking for new business? Go Green! Borrowers can add the cost of energy efficient improvements to their purchase or refinance loan--the idea being; if the home is more energy efficient the borrower will save money on utilities that could be used towards the home’s monthly mortgage payment.
(FHA Mortgagee Letter 2009-18: Energy Efficient Mortgages - Increase in the Dollar Amount of Energy Efficient Improvements)
Supporting Resources:
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| FHA Using First Time Homebuyer Tax Credits - (Includes - Mortgage Talking PointsTM flyer, Can My Buyer Really Get a Tax Credit Refund Before Closing?) — June 2009
FHA’s ML 2009-15 is not going to deliver us from down payment hell. It does not provide an easy, simple solution to get the $8,000 tax credit into the hands of our buyers before closing and the problem is money…or rather the lack thereof. (Includes - IRS First-time Homebuyer Credit Overview.)
(FHA Mortgagee Letter 2009-15, May 29, 2009)
Supporting Resources:
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| FHA Manufactured Housing Policy Guidance - Consolidated Property and Underwriting Eligibility (Effective 8-21-09) — June 2009
If you work with manufactured housing loans, FHA has combined all of the current requirements, including the new HERA changes, into ML 2009-16 as the new consolidated resource. It is a good comprehensive overview and has great worksheets for maximum mortgage amounts, which gets tricky on new construction.
(FHA Mortgagee Letter 2009-16, May 21, 2009)
Supporting Resources:
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| New FHA Online Handbooks - What You Need to Know & Tips on How to Use — June 2009
Yep, there are 2 versions out there! The reason to care is that both versions are updated but they work in very different ways (however neither one is perfect.)
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| Accuracy of Lender Data for FHA-Approved Mortgagees - (Includes Chapter 6 Handbook 4060.1 REV 2 - FHA Connection) — June 2009
This is a “get your poop in a group” warning to prevent problems and delays when you go to process your next annual renewal. Owners and managers, this one’s for you.
(Mortgagee Letter 2009-17, May 22, 2009)
Supporting Resources:
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| Extension of Property Flipping Waiver of Mortgagee "Acquired" and Foreclosed Homes. (Includes Mortgage Talking PointsTM flyer FHA - It's "Full Speed Ahead" for Foreclosures.) (Effective 5-15-2009) — June 2009
There is actually a long list of properties that are exempt from the 90 day holding period and I figured now was a good time to give you a friendly reminder along with a Mortgage Talking PointsTM flyer entitled FHA - It’s "Full Speed Ahead" for Foreclosures. This is a great dealmaker that many RE Agents are not aware of.
Supporting Resources:
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| FHA Releases Online Versions of FHA Handbooks 4155.1 (Mortgage Credit Analysis) and 4155.2 (Guide to Single Family Mortgage Insurance Processing) - (Effective April 9, 2009) — May 2009
It’s about time—but there’s a WARNING: The new handbooks incorporate changes from mortgagee letters through 12/08. But for now, be aware that as of May 7, 2009 the “trial” version of the handbook has not been updated to reflect 2009 changes.
(FHA Mortgagee Letter 2009-14, April 9, 2009)
Supporting Resources:
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| FHA Foreclosure Fix-Ups & 203k Streamlines - Is it a good fit for your business? — May 2009
I want to be clear from the start. I am a huge advocate of the 203K FHA Streamline program and have seen firsthand how well it can work. It can be a fantastic niche to advertise to Realtors, IF it’s a good fit for the originator and the client. This program allows you to add up to $35,000 to their loan amount.
Supporting Resources:
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| FHA Market Condition Addendum (1004MC) to Determine Declining Markets. Mortgage Talking PointsTM flyer "What the New Market Condition Appraisal is All About" (Effective April 1, 2009) — April 2009
For FHA purposes, the MC Addendum findings determine whether or not the property is in a declining market. Additional time is required to complete this form and most appraisers are going to raise their fees. The appraisers I’ve talked to are saying an additional $50-$75. You will need to re-disclose!
(FHA Mortgagee Letter 2009-09, March 23, 2009)
Supporting Resources:
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| FHA Limits - Cash-out Refinance - 85% Maximum LTV is back! (Effective April 1, 2009) — April 2009
Wave goodbye…they’re really gone. No more 95% cash-out refis. A quick note on 3 and 4 unit properties: An 85% loan amount may not be allowable if the new payment doesn’t pass the self-sufficiency test.
(FHA Mortgagee Letter 2009-08, March 12, 2009)
Supporting Resources:
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| FHA Re-Establishes Monitoring of Mortgagees (SWAT) (Effective April 2, 2009) — April 2009
HUD establishes a SWAT team to monitor excessive defaults (by lender). Is your Quality Control Plan up to date? We hope HUD will continue to put some punch behind their policies so that the bad apple lenders don’t take us all down.
(FHA Mortgage Letter 2009-12, April 2, 2009)
Supporting Resources:
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| FHA Loan Limits for 2009 - Back to Where We Started - With a Big Kicker for HECMs! (Effective 1-1-09 to 12-31-09) — March 2009
Higher limits are great news. However, the process is a pain. It depends on the date the case number was issued and comparing which loan amounts were higher (2008 or 2009). And then there’s the HECM Loan Limits – HECM Loan Originators have gotta’ be dancin’ in the streets right now! (County Loan Limit Chart Included)
(FHA Mortgagee Letter 2009-07, February 24, 2009)
Supporting Resources:
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| How to Become an FHA Approved Lender - Checklist Download — March 2009
FHA is all the rage these days. Download How to Become an FHA Approved Lender Checklist for both full and mini-eagle approval.
Supporting Resources:
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| FHA Underwriting At-A-Glance: Handy Purchase Transaction Matrix Chart Included — March 2009
Even if you do FHA loans every day, keep the FHA Underwriting Purchase Transaction Matrix handy. There may be some info you don’t recall off the top of your head. Specifically the stuff on 2-4 unit properties.
Supporting Resources:
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| The Complete FHA Streamlined Refinance Documentation, Submission & Underwriting Approval Worksheet (Current as of 2-1-09) — February 2009
The most complete and current FHA Streamlined Worksheet has been updated in the Charts and Checklists section. Use this worksheet and make sure your files are done right the first time—with no delays! No more backtracking. No more forgotten key documents.
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| FHA to Provide Education Flyers for Everyone - Getting the Word Out...Someday — February 2009
FHA has designed flyers that will be specifically directed at prospective borrowers—but it’s not available just yet! Our subscribers to receive email notice the minute FHA makes their flyers available. Remember, MortgageCurrentcy.com has some great customizable Mortgage Talking Points® flyers designed for marketing FHA information to your Realtors. Take advantage!
(FHA Mortgagee Letter 2009-02, January 7, 2009)
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| FHA Allows High Loan-Limit Streamlined Refinances for 2009 - For Mortgages Originated Under 2008 Higher Loan Limits. — February 2009
Great news! HUD has brought the 2008 high-limit “orphan” FHA loans back into the fold! These higher loan limit borrowers have so much to gain from lower interest rates right now. Not to mention the lenders who will originate their refinances. However, they must meet 2 rules!
(HUD Announcement, January 16, 2009)
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| Revised Policy for Annual FHA Renewal & Approval for Lenders — February 2009
No bailout for slackers who don’t submit their annual renewal on time. The “easy way out” just got nixed. Read the new rule on filing your lender renewals--12 months without the ability to originate FHA loans is a big loss to your bottom line.
(FHA Mortgagee Letter 2009-01, January 6, 2009)
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| FHA Appraiser Roster: Revised Eligibility & Deadline Extended — January 2009
Okay, so these new requirements are my appraiser\'s problem right? Oh but no. They\'ve made it your problem too. HUD will not be "cleaning" out its database of non-qualified appraisers for quite some time, so...the FHA appraiser that you assign an appraisal to on September 30, 2009 may create an uninsurable loan when you assign another appraisal to him on October 1, 2009. What\'s going to happen?
(FHA Mortgagee Letter 2008-39, December 17, 2008)
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| FHA Secure Has Been Terminated! — January 2009
FHA has said that the reason for pulling the plug on FHASecure was because of the MMI Fund\'s inability to handle the negative impact of the program. The good news is that HUD reinstated and simplified the rate and term refi process...read more!
(FHA Mortgagee Letter 2008-41, December 19, 2008)
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| FHA Streamlined Refinances: Refi Worksheet and Quick Reference Guide Included — January 2009
FHA Streamlined Refinance is all the craze these days! Do you want to get these loans thru the system faster and close more loans? Subscribers download the handy FHA Streamlined Refi Quick Reference Guide and Documentation/Submission/Approval Worksheet and get it “right” the first time!
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| FHA Refinance & Streamline Transactions: Revised Maximum Mortgage Calculation - Just the Tip of the Iceberg (LTV Matrix Included) — January 2009
Finally! With rates dropping and streamline refinances explosind it was about time for FHA to clarify their refinance maximum loan amount calculations! 85% cash-out refinances were NOT eliminated! Hey, now we need two appraisals. HUD created an easy-to-understand matrix - print it out. It\'s really good.
(FHA Mortgagee Letter 2008-40, December 15, 2008)
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| FHA Loans - Acceptable Down Payment Sources! (Mortgage Talking PointsTM Flyer - Shake the Money Tree) — December 2008
There are lots of lesser-known alternative sources of down payment funds acceptable to FHA. Many loan officers, real estate agents and builders either don’t know about or fully understand them. You might be able to close a few more loans by knowing this info. Download Mortgage Talking Points® Flyer – Shake The Money Tree!
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| FHA/VA: DU for Government Loans - Will Not be Updated Until 1/24/09 - It's Still Your Responsibility to Check Loan Amounts! — December 2008
The oops potential for loan buy-backs and uninsured loans is massive to say the least. You cannot depend on your DU findings for government loan amounts until January 26, 2009.
(Fannie Mae DE for Government Loans Release Notes for January 2009, on December 1, 2008)
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| FHA - Property Flipping Allowed in 5 Midwestern States — December 2008
If you are originating in these states, get the word out! Quick! This is big news for those doing business in these counties. Check your pipeline: deals that were not previously eligible for FHA financing may be now. See if your borrowers could benefit.
(FHA Mortgagee Letter 2008-37, November 24, 2008)
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| FHA HOPE for Homeowners' Program (H4H) - Is it Workable? — December 2008
It looks like lipstick on a pig to me--none of these changes make a @*!#%! difference to most of us; H4H is STILL not a viable origination tool. With that said, there is still a lot of buzz going on and subscribers are asking about it, so here’s what you need to know, in plain English!
(HUD News Release 08-178, November 19, 2008)
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| FHA Reverse Mortgages & New Origination Fee Limits - How to Figure! — December 2008
Now is the time to take a hard look at your company policy, if you have one, regarding HECM origination fees. Seems simple enough, but I hate it when HUD gives us instructions that are “open to interpretation” and they’ve done it again!! First, let me clarify a few things for you…
(FHA Mortgagee Letter 2008-34, October 31, 2008)
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| FHA Maximum Loan Limits Including Reverse Mortgage (HECM) Mortgage Loan Limits for 2009 — December 2008
Most of us are a little misty-eyed over loosing our temporary higher limits but hey, it could have been much worse...really. Create lists for your area and email or deliver them to everybody. Put the FHA limits for surrounding counties on the back of your business card and laminate.
(FHA Mortgagee Letter 2008-36, November 7, 2008 & FHA Mortgagee Letter 2008-35, November 6, 2008)
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| FHA - Maximum Mortgage Limits for 2009 - More Complicated Than You Think - Links To Loan Amount Tables Included — November 2008
So, FHA has their own limits but they threw in a couple of "kinks" in the ML. Subscribers can download the new limits, but there\'s a lot more to it, for loan officers, processors and underwriters. Complete details to follow since it was just released on November 7, 2008. This is sooooo new!
(FHA Mortgagee Letter 2008-36)
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| Home Equity Conversion Mortgage (HECM) for Purchases - It's About Time We Heard Something! — November 2008
This has been a long time coming for all of you HECM originators.
The Housing Economic Recovery Act (HERA) has given the FHA HECM the higher loan limit of $417,000. This fast-growing product is headed for some off-the-charts popularity. Plus it will be the only game in town since Fannie’s Homekeeper is throwing in the towel as of December 31, 2008.
(FHA Mortgagee Letter 2008-33, October 20, 2008)
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| HOPE for Homeowners Origination Guidance - But Will it Help YOUR Clients? — November 2008
While the hoopla over HOPE was great, the resulting guest list for the party is short and most of us didn’t get invited. The majority of investors, who we in the mortgage industry would be selling or brokering these loans to, have said, “After reviewing the program, HOPE for Homeowners will not be eligible for purchase from third party originators.”
(FHA Mortgagee Letter 2008-09, October 1, 2008)
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| FHA Incorporates Desk Top Underwriting - It's NOT as Automated as You Think - What to Expect! — November 2008
This affects everyone! This can and will affect your paycheck. Remember the good ol’ days (2 years ago) when we could be lazy (at least I was) about looking up all those pesky guidelines. Heck, just run it through DU. It will tell you if it will fly and what you need for documentation. Well, that’s no longer the case because there are lots of things you need to check before you do so.
(Fannie Mae document issued 10/1/2008: DU for Government Loans)
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| Reverse Mortgage Rules Changed to Comply with HR3221.Sec 2122 — October 2008
HERA (HR3221) revamped the entire HECM product and this is just the beginning. The new ML doesn’t say much, yet it’s truly devastating to those who are amongst the non-FHA approved brokers who have been getting paid for “assisting” HECM borrowers. No ifs, ands, or buts – “but” – it’s over! HUD realized that the “cross-selling” matter is awfully complicated, so effectively; they are not doing anything yet. At least HUD is letting us know that there are no directives until the subject is researched.
(FHA Mortgagee Letter 2008-24, September 16, 2008 - HR3221.Sec.2122(a)(9), Housing and Economic Recovery Act)
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| Do You Know When Rental Income Can Be Used for Qualifying on an FHA Loan? Vacancy Chart Included. — October 2008
No question, HUD acknowledged that the whole rule change is about individuals who may “provide misleading information regarding the rental income of the property being vacated to qualify for the new mortgage” [ML 08-25], who then walk away from the first home after closing on the second.
Plain and simple – If your clients are purchasing a new home and renting the home that they currently live in, both payments must be included in the qualifying ratios. UNLESS, they fit into one of the exceptions.
(FHA Mortgagee Letter 2008-25, September 19, 2008)
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| Re-written Rule Changes: FHA-MIP, Non-Occupant Co-Borrowers, Non-Traditional Credit (Reference Charts Included) — October 2008
ACKKK! The whole thing is so HUD-like. Let me explain. In the current ML (2008-22), HUD rescinds the entire ML 2008-16. Then, they "retain and reiterate" (give back) most of the same rules, yet there are quite a few technical differences. And we ALL know how technicalities make or break loans!
(FHA Mortgagee Letter 2008-22, September 4, 2008)
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| FHA's "Hope for Homeowners Program" Saves Homeowners from Foreclosure! Or - is FHASecure Better? — September 2008
As far as I\'m concerned, it isn\'t even worth the paper it\'s written on. I\'d choose to ignore writing about it, but Washington keeps touting it and throwing it out for the world to see, saying it will be "the" program to save borrowers who are facing foreclosure.
(HR3221.ENR. Division A - Title IV - HOPE FOR HOMEOWNERS)
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| FHA Announces Easier Condo Guidelines — September 2008
The Secretary of HUD will have discretion to revise the current condominium requirements under the new Section of the Act.
I\'m not kidding, that\'s it! Apparently before, HUD was stuck with rigid rules mandated by Section 234 of the Act; NOW, Section 203(b) gives them much more control.
So here we are, knowing NOTHING for sure. But everybody keeps asking about the new condo rules, and I DO know something...
The following information came from Jim Beavers, Deputy Director of Single Family Development at HUD.
(HR3221, Sec. 2117. Insurance of Condominiums. Housing and Economic Recovery Act.)
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| Finally - Final Rule for FHA Mortgage Insurance Premiums! UFMIP, MIP Factors & Calculations AFTER 10-1-08 — September 2008
It\'s about time! It\'s quite a relief that the new UFMIP is a lot lower than it was expected to be! I think that 1.75 is a number that everyone can live with. The fun is going to be dealing with all of the various MIP factors and methods of calculations - and getting it right! Reference Chart Included.
(HUD Federal Register "Notice"; Docket No. FR-5171-N-03, 8-24-2008)
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| FHA Cash Investment & Down Payment LTV Changing. Refi LTVs Too - Encourage Clients - Act Now! — September 2008
We’ve all been waiting for this because new loan amount calculations were “supposed” to be effective 10-1-08, and thank goodness they’re not. But still, the news is still incredible! I’ve never actually seen HUD really and truly “simplify” anything, let alone the loan amount calculations. They’ve actually done it this time!
And then, the refinance calculations are a shocker! There’s a bunch more, so let me go over things one at a time.
(FHA Mortgagee Letter 2008-23, June 11, 2008)
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| FHA Maximum Loan Limits - 2009 & Beyond — August 2008
There’s no question that it will hurt to lose the $729,750 that we’ve enjoyed from the Economic Stimulus Package. But look at the whole picture and the new ceiling is fantastic news. Without this legislation, maximum FHA’s ceiling would revert to $362,790 at the end of the year! $625,200 doesn’t sound so bad any more, does it?
(H.R.3221.ENR Sec.2112.MAXIMUM PRINCIPAL LOAN OBLIGATION)
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| What is FHA's New Down Payment, and What About the CLTV? — August 2008
Thank goodness the previous distinction in LTVs for high and low closing costs states is finally gone! It was silly from the onset. Moreover, according to *HUD, all tiered pricing is out the door. Sounds great to me.
(H.R.3221.ENR Sec.2113.CASH INVESTMENT REQUIREMENT; 2112.MAXIMUM PRINCIPAL LOAN OBLIGATION)
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| FHA - CAIVRS Telephoned Access to be Discontinued! — August 2008
ANY time that you have a potential FHA borrower, you should check CAIVRS. It can be a deal-breaker, and you need to know right up front! If you are counting on your Processor to deal with it, you may want to make sure you get the file to him/her instead of keeping it in your possession.
(FHA Mortgagee Letter 2008-18)
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| The Inside Scoop on What's Happening with FHA MIP - ON HOLD! — August 2008
Can you imagine the millions of dollars spent in implementing the changes with LP, DU, Lenders, LOS vendors, training involved, etc., only to be told everything must change again?
Okay, it is a fact that the new mortgage insurance won\'t be risk based. We also know that the previously legislated maximum UFMIP was 2.25% and that the new maximum UFMIP is 3.0%. As to what the new UFMIP will actually be, we flat out don\'t know. It will be 3% or less. Risk Based MIP Chart Included.
(H.R.3221.ENR Sec.2133.MORATORIUM ON IMPLEMENTATION OF RISK-BASED PREMIUMS)
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| Seller Assisted Down Payment Assisted Programs Terminated; Use Family Member Loans (Mortgage Talking PointsTM Flyer/Email Included) — August 2008
I realize that many of you have been dependent upon DPAs for a majority of your FHA business. At the same time, DPAs foreclose at a much higher rate, and are causing concern for the stability of the FHA mortgage insurance fund.
For now, however, it\'s a moot point what you or I think of DPAs; they are gone as of 10-1-08. And I can show you other alternatives!
(H.R.3221.ENR Sec.2113.PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE)
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| The Final Word from HUD About Non-FHA Approved Brokers — July 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)
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| The Real Scoop on HUD's Flipping Rule & 90 Day Holding Period Waivers — July 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)
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| Now - the Whole Story about FHA Risk Based Pricing, MIP, UFMIP, LTV and Credit Scores: Includes Great MIP Reference Chart — July 2008
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)
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| FHA Streamlined Refinances - Revised MIP and UFMIP rules - and Can't Streamline FHA Secure? — July 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)
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| Part Two: FHA Cash-Out, No Cash-Out, Rate and Term, Refinance Saga Continues — July 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)
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| FHA Rules Does Away with Down Payment Assistance Programs, May be Gone for Good! — July 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)
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| FHA Cash-Out Refinance, 95% LTV and 85% LTV Rules — June 2008
The biggest thing to come out of this is the dis-allowance of non-occupant co-borrowers. They WERE previously allowed on 85% LTV cash-outs. This upsets me terribly, but realistically, hardly anybody knew you could do them to begin with. (See related handbook: FHA & VA Streamlined Refinance Handbook)
Cash-Out Refi Changes & Clarifications(Mortgagee Letter 2008-13, May 7, 2008)
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| New MCAW! Comes New FHA/VA Addendum to 1003 - and - New Learning Curve — June 2008
Oh goodie, all of your software\'s going to change! There will definitely be a learning curve. But it WILL be worth it because the new MCAW is SO much better than the old one! But you\'d be well advised to read what you are attesting to.
New! Easier MCAW, Revised Addendum(Mortgagee Letter 2008-15, May 22, 2008)
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| FHA Secure - SO Much More: Includes Rule Changes for FHA Chas-Out, FHA No Cash-Out, FHA Manual Underwriting — June 2008
This is complicated and there\'s a lot more to it than meets the eye. The title implies that it only deals with FHA Secure, but that\'s NOT TRUE! It changes the rules for ALL FHA refinances except for Streamline Refi\'s.
FHASecure - SO MUCH more than it appears(Mortgagee Letter 2008-13, May 7, 2008)
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| Intro of Risk Based MIP and UFMIP - Credit Scores and LTV Decide! — June 2008
I\'m in total shock! FHA just made it a RULE that all loans (that have credit scores) MUST be submitted to TOTAL!
In order to calculate the UFMIP or the maximum loan amount, the credit score must be obtained from the AUS.
Risk Based MIP Brings NEW Glitches(Federal Register / Vo. 73, No 93 / Tuesday, May 13, 2008 / Notices)
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| Are There Loopholes for Non-FHA Approved to Originate FHA? To do HECM Loans? — June 2008
The only way that I can see around this is by having a contract with the lender wherein all parties agree to the lender providing you with all information regarding the loan\'s status.
They are using any method possible to encourage the origination of FHA HECMs. After all, this IS a great program, and it also looks great for HUD politically!
Non-FHA Approved Mortgage Brokers - HECM or Everyone? (Mortgagee Letter 2008-14, May 16, 2008)
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| HECM (Reverse Mortgage) Counseling Fee Allowed — June 2008
Housing Agencies that are approved to provide counseling services for HECM borrowers or their families may now charge a fee for their services.
And yes, it does matter if you are involved in HECM originations because there will be another charge to (most of) your clients - whom are elderly with limited income.
Fee Allowed for HECM Counseling Services(Mortgagee Letter 2008-12, May 6, 2008)
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| FHA No Cash-Out Refinance, Conventional-to-FHA Gone? How to Deal with Changes — June 2008
I recommend getting a case number on everything that you have pending before 7-14-08. Being able to subordinate an existing lien when the CLTV exceeds the statutory limits is excellent news!
"Did FHA really mean that all conventional-to-FHA "co cash-out" mortgages must move to the FHASecure Program? (Unfortunately, I think they did.) I recommend getting a case number on everything that you have pending before 7-14-08."
FHA No Cash Out, What has Happened to This Program?(Mortgagee Letter 2008-13, May 7, 2008)
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| Good News! FHA Finally Defines Non-Traditional Credit Requirements — May 2008
FHA finally came up with guidelines for non-traditional credit! DE Underwriters have been all over the place about what is allowed, and smart originators/brokers shopped underwriters for this reason alone!
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| FHA Jumbo: Cash-Out Refinance LTV Reduced/Two Appraisals in Declining Markets — April 2008
You have to admit that a 95% cash-out refi on a jumbo loan was too good to be true. You know, an 85% cash-out FHA-Jumbo is still an awesome loan. It allows: 1-4 unit properties; 1-unit homes only (not 2-4s), you can include a non-occupant co-mortgager to help with qualifying (but not to overcome bad credit). Fannie doesn\'t even have jumbo cash-out refis; and Freddie-jumbos are only 75% LTV with all kinds of fees and a 720 FICO. There\'s still no comparison.
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| HECM (Reverse Mortgages) Offer Fixed Rate — April 2008
If you originate HECMs - I\'m kind of excited about this. I got my own Mother into a HECM. Now I want to check into her changing options and getting a fixed interest rate, which wasn\'t, to my chagrin, available when she took out her loan.
For those of you who don\'t currently originate HECMs - With the aging of America, the HECM is the fastest growing program out there. It\'s a great opportunity to develop a niche, and there is plenty of room for "experts" in this field.
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| FHA Jumbos - The Greatest Loan on Earth! — April 2008
This FHA happening is the biggie of the decade!! Honestly! FHA went from 2% of the overall mortgage market share in the country to 90% of the market’s demand overnight. Although I provided a brief review in the March MortgageCurrentcy.com, the following is much more comprehensive:
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| Door Opened for Non FHA-Approved Brokers and Originators — April 2008
Everyone is always looking for a way to get around the rules; I think it\'s human nature. The following is for those of you who are not-FHA-approved in a market in which FHA is one of the few viable loans left. You can\'t just idly stand by watching everyone else get all of the business, can you? However, HUD left a teensy-weensy door opening for non-approved brokers to squeeze into.
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| Temporary FHA Loan Limit Increase! — March 2008
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| "What is the 203K Streamlined all About and Why Should I Look Into Doing These Types of Loans? Learn how a typical transaction works." — March 2008
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| FHA Defines the Use of 1099's and W-2's for Loan Originators. (Link to Reference Source for Proof.) — March 2008
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| How to Increase FHA Loan Limits in Your Area of the Country. — February 2008
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| FHA - HUD Policy Alert - RESPA and non FHA-Approved Brokers or Originators — January 2008
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