MortgageCurrentcy.com -

Mortgage
Currentcy
Because getting a mortgage loan closed
...IS Rocket Science!

Interpreting Fannie Mae - Freddie Mac FHA - VA - Compliance - Rules & Guidelines for:
Loan Officers		Underwriters
Processors		Company Owners & Managers

FHA Disputed Accounts - New Rules Starting July 1, 2012

Subscribe
Subscription Options
Testimonials
Latest Rules Issue - $45
Latest Q & A Issue - $45

Current Subscribers
Current Rules Issue
Current Q & A Issue
Rule Calendar
Mortgage Talking Points™
Facebook^® Posts
Charts & Checklists
Video Training Courses
Video Rule Updates
E-mail a Friend

Archives
Past Rules Issues
Past Q & A Issues
Keyword Search
Universal Topics
Fannie Mae
Freddie Mac
FHA
VA
USDA
Compliance
Credit
Reverse Mortgage
Video Updates

Products
Products Online
Purchase Past Issue

Free Things
How to Figure out
Cash Flow for
Self-Employed Borrowers
View Free Articles

About Us
Contact Us
Advisory Board
Mortgage Speaker

Compliance Articles from Q & A Issues:

Fannie Large Bank Deposit: If we cannot document a large deposit on a bank statement, does Fannie allow you to "back out" the undocumented deposit and use the remaining balance? - April 25, 2012
Fannie Mae Foster Care Income: Is Foster Care Income Taxable? - April 25, 2012
Fannie Commission Income: I have a borrower who is 100% commissioned. On the job for 5 years. Income has been declining $10,000 each year from the last 3 years. What income should I use to qualify? - March 25, 2012
Fannie Appraisal Economic Life: An appraiser states the remaining economic life of the home is 20 years. Does my loan term have to be 20 years or less? - February 25, 2012
Fannie Delayed Financing Rule: My client paid cash for a much smaller home priced under $400K on December 15, 2011. Did Fannie eliminate the 6-month waiting period and what are the rules? - January 25, 2012
Fannie Condo: What does “Right of First Refusal” mean when it pertains to a condo approval? - January 25, 2012
Fannie Landlord Experience: What’s the amount of time that a borrower must show that they have managed rental property before we can use the rental income to qualify? - January 25, 2012
Fannie Home Purchase For Family Member: What are the rules for a purchase for elderly parents or a disabled kid as a primary residence? [Download Mortgage Talking Points^TM flyer, Rules for Buying a Home for a Family Member Using Conventional Financing] - January 25, 2012
Fannie Condo Occupancy: Can you help point me in the right direction on this? My underwriter is telling me that Fannie & Freddie now require a 70% owner occupancy ratio on condos as opposed to the previous 51%. Can you verify that? - December 25, 2011
Fannie Second Home: My client lives in Georgia and wants to purchase a home in New Jersey. He works six months In one state, and six months in the other. Could it be considered a second home? - November 25, 2011
Fannie Multiple Parcels: Do Fannie guidelines prohibit lending on more than one parcel of land? [Download Mortgage Talking Points™ flyers, When Your Clients Want to Buy Extra Land - Conventional Mortgage Rules] - October 25, 2011
Fannie Compensating Factors: Do you have a current list of what FNMA accepts as comp factors? - October 25, 2011
Fannie Cash Out Refi: I have a parent who purchased a home for cash. They want to sell the home to their daughter who will owner occupy. Do I need to wait 90 days after cash purchase, and can mom and dad sell to daughter with new sales price (at current value) to give 20% gift of equity? - September 25, 2011
FNMA Disability Income: Client is on permanent disability and has paperwork to show for the past 1 year U/W has requested a letter from the insurance company stating the income will continue for the next 3 years. The insurance company will not write such a letter because they periodically re-evaluate the claim. What is the rule? - September 25, 2011
Fannie Escrow for Repairs: What are Fannie’s rules about escrowing for repairs if the appraiser comments about repairs on the appraisal report? [Download Mortgage Talking Points™ flyer, Escrow for Repairs - Existing Homes, Escrow for Completion - New Homes; What Fannie Mae Requires ] - August 25, 2011
Fannie DU Refi Plus Ineligible: I am working with a past client on a DU Refi Plus loan. I was told that she didn't qualify because of the risk pool it is packaged in. Can this be true? - August 25, 2011
Fannie Cash-Out - Properties Owned Less Than 6 Months: Could you explain Fannie’s Delayed Financing Rules? - August 25, 2011
Fannie Paycheck Stubs: I have a professor who will not get a check for 60 days. DU accepted with recent YTD paystub. Another lender told him that FNMA looks at teaching contracts similar to FHA guidelines and that he could close immediately. Am I wrong? - July 25, 2011
Retirement Funds Assets: My client is using a retirement account as cash reserves. The underwriter says that we need to show the terms of “withdrawal”, even if they don’t need the money to close. Is that correct? - June 25, 2011
Fannie Residency Requirement: Borrower transferred here from the UK in August 2009. Has worked for same company for 8 years. Has established credit, acceptable credit scores, the proper Visa, etc... The underwriter says I have to verify a two year residency history in the US. Is that true? - May 25, 2011
Fannie Retirement Income: My customer receives State Teachers retirement and annuity income. Can I “gross up” the income? - May 25, 2011
Fannie Gift from Relative: I have a borrower who will be getting a $25,000 gift from her husband toward down payment. What are the rules when a gift is coming from a relative? - May 25, 2011
Fannie Cash Reserves for Refinance: We ran a rate & term refi thru AUS Fannie and the underwriter is saying we need 2 months cash reserves. The investor has no overlays and I can’t find anything in the Fannie Guidelines. Is the underwriter wrong? - April 25, 2011
Fannie MyCommunityMortgage: Can you give me a “refresher course” on the MyCommunityMortgage loan? [Download Mortgage Talking Points™ flyer, MyCommunity Mortgage by Fannie Mae - Best Kept Secret] - March 25, 2011
Fannie Payment Made by 3rd Party: A church is paying a pastor’s car payment, but the car loan is in my client’s name. I have provided the copies of cancelled checks but the underwriter is still counting the payment. What’s the rule? - February 25, 2011
Fannie Remove Borrower from Loan: I have 3 borrowers on a mortgage who want to refinance and remove one of them using DU Refi Plus. The underwriter says the only way borrowers cannot be removed unless it is a divorce or death. I disagree. What’s the rule? [Download Chart/Checklist - Fannie Rules to Remove Borrower from Mortgage When Using DU Refi Plus or Refi Plus to Refinance.] - February 25, 2011
Fannie Revolving Debt: If a revolving debt has recently been paid off, what is the dollar amount or percentage that Fannie counts in the DTI ratio? - January 25, 2011
Fannie Divorce Buyout: Is it true that a refinance to pay off a spouse or domestic partner is considered a rate and term refinance instead of a cash-out refinance? - January 25, 2011
Fannie Buying Home for Parent: I have a client who wants to purchase a home for his mother and obtain a conventional loan. Would this be an investment Property? [Download Mortgage Talking Points™ flyer, Rules for Buying a Home for a Family Member] - January 25, 2011
Fannie Flex Loans: I understand that Flex 97 went away. Is that correct? - December 25, 2010
Fannie Cash Out Refi: Borrower paid cash for a home. Does the 6-month waiting period mean the date of closing or date of application? - November 25, 2010
Fannie Second Home Question: Where can I find FNMA reserve requirements for second home transactions? [Download Mortgage Talking Points^TM flyer, Buying a Second Home? 7 Key Mortgage Rules You Need to Know About!] - October 25, 2010
Fannie Business in Home Income: How does the agencies view business use of home? Can 100% of the expenses be added back to income? - October 25, 2010
Fannie DU Tolerances: I'm trying to get my hands on the tolerance matrix for FNMA DU. Do you have a chart or checklist that would identify when DU has to be re-run when there are changes. [Download Fannie Mae DU Tolerance Table.] - September 25, 2010
Fannie HELOC’s with Pre-Pay Penalty: Does FNMA have a guideline that disallows the subordination of any HELOC that has a prepayment penalty? Is there a loophole that I am missing? - September 25, 2010
Fannie Investment Property Refinance: What is the hat is the max LTV for cash out --- on a 1-4 family investment property and how many properties will Fannie allow? [Download Mortgage Talking Points^TM flyer, Working with Investors? Know the Rules!] - September 25, 2010
Fannie Self-Employed Borrower Income: I have a borrower that has a passive income loss from a LLC that he has 10% interest in and has nothing really to do with the operation of the company. The underwriter is including the loss as a debt on in debt ration instead of as an income loss. Is that correct? - August 25, 2010
Fannie Delayed Paycheck: I have a borrower who is scheduled to receive their 1st SS check in Oct. Do we have to wait to close the loan so the first payment due date falls on Oct.? (I guess the same question would apply if someone is starting a new job and wants to close before receiving their 1st paycheck!) - July 25, 2010
Fannie No-Cash Out Refi: If I do a Fannie to FANNIE refi as a no cash-out can the borrower still get back the lesser of 2% of the loan amount or $2000. I had someone tell me it had to be a principal reduction. - June 25, 2010
Freddie Non-Occupy Co-Mortgagor: What are the Freddie guidelines for non-occupying co-mortgagors? - June 25, 2010
Fannie Home Listed Sale: I have a client that wants a rate/term refi on her home. However, she recently had it listed for sale. She withdrew the listing this week. Will we have an issue with this application and will I need additional docs?? - June 25, 2010
Fannie Pre-Foreclosure Waiting Time: Please explain the pre-foreclosure rules recently issued by Fannie. They are confusing! [Download Mortgage Talking Points^TM flyer, Advising Short Sale & Deed In Lieu Clients] - May 25, 2010
Fannie Buying Home After Divorce: Client is divorcing, ex awarded house - both on mortgage - he will not refinance. Can she purchase another (and not have the debt of current house considered in ratio) if she is buying another? - May 25, 2010
Fannie Continuity of Obligation: I have a refi with 2 borrowers, but one of them wants to be dropped from the loan. What's the rule? - April 25, 2010
Fannie Non-US Citizen: I have a potential borrower with 25% down and is fully employed with a good credit history on a student visa till 2011 but hopes to have her H1 work Visa in 3-6 months. Is residency an issue? - April 25, 2010
Fannie Kiddie Condo: What’s the rule if a parent purchases a home/condo for a child who is going to college? - April 25, 2010
Fannie Mae 5% Rule: Our new compliance manager has stated we are not allowed to charge discount points unless we count them in the 5% rule. Am I correct to say as a mortgage banker I can charge discount points that do not count against the 5% rule? - March 25, 2010
Fannie Non-Taxable Income: Where can I find FNMA's stance on "grossing-up" income for Social Security, child support, etc.? - March 25, 2010
Fannie Origination Fee Exceeds 5%: I am being asked to reduce the origination fees since I am over the 5% allowed. What are the rules to this requirement? - February 25, 2010
Fannie Borrowed Funds for Down Payment: Can a borrower draw funds from a home equity line of credit (on current home) for a down payment on another home? What are the rules? - February 25, 2010
Fannie Calculating Rental Income: In refinancing an owner occupied 3-unit home, can you add back in mortgage interest, taxes or insurance since either of these 3 are being taken into account in our loan on page 2 of the application since its our subject property? - January 25, 2010
Fannie Consumer Credit Counseling: A borrower putting 20% down and has one account open with Credit Counseling Service since 2006. What is Fannie’s rule? - January 25, 2010
Fannie Cash-out Refi: A borrower has 15 financed properties. Anything stopping them from a cash-out refinance of their PRIMARY residence? - December 25, 2009
Fannie Condo Certification: For a conventional loan on a condo, is a cert required and will things such as HOA delinquency and owner occupancy rate make or break the deal as far as getting an approval goes? - December 25, 2009
Fannie Seller 2^nd Mortgage: What are the rules when a private seller holds back a second mortgage when selling their home? - November 25, 2009
Fannie Condo Occupancy: Does the new Fannie Mae rule for condos, which states that no more than 1 entity can own more than 10% of the units, include the builder? 38 out of 46 units have been sold and the builder still owns 8. The lender says they need to get Fannie Mae approval because of this 10% rule. Is that true? - November 25, 2009
Fannie IRA Income: I have a loan that was denied because of IRA distributional income. My borrower takes 2 draws a year - not monthly. Can you clarify the rules on IRA income for me? - October 25, 2009
Fannie Real Estate Investor: Can a novice landlord (no experience managing rental properties) qualify using 75% of the rental income on NOO property to offset PITI. Mortgage Talking Points^TM flyer - Working with Real Estate Investors - Know the Rules! - October 25, 2009
Fannie Mae Condos: Is there a minimum sq. footage on a condo that FHMA guidelines accept? - September 25, 2009
Fannie Mae Tribal Funds: My client was awarded a $10,000 grant from her Indian Crow Tribe - which none needs to be repaid. Do you think the Tribes' partial down payment for a Conventional loan is acceptable? - September 25, 2009
Fannie Mae Property Limit Rule: My underwriter told me that Fannie Mae has a limit of 4 financed properties. I told him about the new change but the UW insists that it's wrong and is hanging his hat on page 189 in Fannie's selling guide. Doesn't the announcement supersede the selling guide? - September 25, 2009
Fannie Mae Self-Employed Analysis: I've just had a loan declined by an underwriter who claims that Fannie Mae no longer allows the self-employed borrower to give back the business use of the home deduction (line 30 of the schedule C). Is that true?
- September 25, 2009
Fannie Mae Cash Reserves Investment Property: Do the guidelines say that starting Oct 1, 2009, that any one purchasing an investment property must show a 24 month history of prior investment experience or else they do not qualify?
- September 25, 2009
Fannie Inherited Property Purchase: Borrower has inherited 1/3 interest in a home that she will occupy. Can I treat this as a purchase under Fannie Mae Guidelines (evidencing my borrower's 1/3 interest as a gift)? - August 25, 2009
Fannie Subordinated Home Improvement Loan: We have a rate term refinance in which we are keeping a home improvement loan in place. A Fannie Mae Lender states "since they did not use the 2nd lien to acquire the property, you can not run the AUS as a limited cash out, you must rerun it as a cash out. DU says the loan is ineligible due to the CLTV exceeding the max 85%." Is this correct? - August 25, 2009
Fannie Condo HOA: I have an 80% LTV purchase, FNMA loan. The lender is requiring an HOA cert. There are 24 units and the HOA cert shows 4 are delinquent. Is this going to be a problem? - August 25, 2009
Fannie Mae Property Flipping: I have an investor that has been given an option to purchase 14 brand new homes at wholesale prices (.30 on the dollar) and wants to double escrow them with borrowers that they have found. The basic numbers are investor buys for $65k and is selling for $135k same day. Is there a rule for this kind of flipping? - July 25, 2009
Fannie Mae Legal, Non-Conforming Zoning: Does Fannie Mae accept properties that are classified as legal, non-conforming? - July 25, 2009
Fannie Mae Teacher Income: The underwriter will not count the income from a teacher who was on maternity leave. She has been teaching for over 10 years. We do not have a 30-day paycheck stub, but a VOE that says she will be going back to work come September. Can we use the income? - July 25, 2009
Fannie 2^nd Mortgage Prepay Penalty: Do the agency rules allow for a pre-payment penalty on 2^nd mortgages? - June 25, 2009
Fannie Inherited Home-Equity Gift: What are the guidelines for inherited properties and gift of equity, where family is gifting their portion of inherited property equity to a son? - June 25, 2009
Fannie Solar Home: Will Fannie or Freddie lend to a house that does not have electricity? The house is powered by solar and wind. - June 25, 2009
Fannie Kiddie Condo: Is it acceptable to buy a condo as a 2^nd home for a child to live in while she/he attends college using 2^nd home downpayment? - June 25, 2009
Fannie Gift Funds: What are the gift fund requirements on Fannie Loans? - May 25, 2009
Fannie Refi Second Home: I have a 2nd home rate/term refinance for a client who uses the condo to entertain clients. His returns show some rental income. Underwriter is saying it's not a 2nd home due to rental income. Is that true? - May 25, 2009
ARMs Length: What's the maximum LTV and documentation requirements for a "Non Arm's Length" transaction? - April 25, 2009
New Construction Refi: A client has owned a lot for 4 years. He owes $24,000, value $33,000. The builder is using his own funds. Underwriter says that loan would have to be cash out unless builder takes out construction loan and borrower can prove payments made during construction. Is the underwriter wrong? - April 25, 2009
Home Path: For the 95/5 Home Path program…is it easier to get clients approved and no MI? Do you know of any lenders offering this program? - April 25, 2009
Fanne Mae Refi Rental Properties: Can an investor refinance 5 rental properties? Mortgage Talking Points^TM Working with Real Estate Investors - Know the Rules - March 25, 2009
Fannie Mae - Bankruptcy Rules: Does the 48-month waiting period, after a bankruptcy, apply to Chapter 7's as well? - March 25, 2009
Fannie Mae Home Purchase: Are there new rules for buying a primary residence - even though the borrower has 6 rental properties they currently own? - February 25, 2009
Fannie Mae HomePath: What's the new Fannie Mae HomePath program and which lenders offer it? - February 25, 2009
Fannie Mae Seller Seconds: Does Fannie still allow seller seconds? The underwriter said they have eliminated the rule! - February 25, 2009
Fannie Mae New Construction Seasoning: What date does the 6-month time period start to determine a cash-out refinance new construction? When they took title or the date of the HUD 1? - February 25, 2009
Fannie Mae Flipping Rule: Does FNMA have the 90-day flipping rule? - January 25, 2009
Fannie Seller Concessions Investors: What is the percentage of seller-concession allowed for Investment Properties? Is it based on the "sales price" or the "loan amount"? - January 25, 2009
Fannie Mae Parents' Co-signer: Does Fannie Mae have a guideline where a borrower can purchase or refinance their retired parent(s) home as an owner-occupied transaction? - December 25, 2008
Fannie Mae/Freddie Mac Short Sale: Can you confirm that all agencies look at short sales the same as a full foreclosure for credit worthiness & time line for a new purchase? - December 25, 2008
Fannie Mae High Balance Loan Refi: Do Fannie & Freddie have different LTV requirements for high-balance, cash-out refinances? - December 25, 2008
Fannie/Freddie Condos: An underwriter said that I have to wait 3 years after a condo conversion, to finance (or refinance) Fannie or Freddie. Why? - November 25, 2008
Fannie Mae High Balance DTI: Does Fannie's new "High Balance" loan have the same maximum 45% DTI as the current conforming Jumbo? I have an approve/ineligible because of a 47% DTI that I'll hold until January if I can get it through then. - November 25, 2008
Fannie Mae Community Seconds: What are Community Seconds to 105% LTV, and how do they work? - October 25, 2008
Fannie Mae Construction-Perm Refinance: When can I consider a construction-to-perm a refinance? - October 25, 2008
Fannie/Freddie Investment Property Loans: How do I finance investment properties with Fannie & Freddie? - October 25, 2008
Fannie/Freddie Dropping Mortgage Insurance: Is it true that MI can be dropped as soon as the borrow is able to get a new appraisal, showing their LTV is at 80% or less? - October 25, 2008
Fannie/Freddie Temporary Buydowns: Can I do buydowns on conventional loans? What are 3-2-1 or 2-1 buydowns, and how can I use them? (Mortgage Talking Points^TM Flyer Included) - October 25, 2008
Fannie Mae/Freddie Mac Gift Funds: I have a borrower whose husband is not going to be on the loan, but all of the cash is in his name. I was told it is okay if he gifts a full 20% down payment, but then need a 95% loan. Is there anyway that I can make this work? - September 25, 2008
Fannie Mae/Freddie Mac/FHA/VA 401K Loans: Does Fannie, Freddie and/or FHA/VA consider a loan from your own 401(k) as a debt and is it added as a liability to qualify? (Tax Credit Talking Points Included) - September 25, 2008