Issue Publish Date

March 10th, 2010February 10th, 2010January 10th, 2010December 10th, 2009November 10th, 2009October 10th, 2009September 10th, 2009August 10th, 2009July 10th, 2009June 10th, 2009May 10th, 2009April 10th, 2009March 10th, 2009February 10th, 2009January 10th, 2009December 10th, 2008November 10th, 2008October 10th, 2008September 10th, 2008August 10th, 2008July 10th, 2008June 10th, 2008May 10th, 2008April 10th, 2008March 10th, 2008February 10th, 2008January 10th, 2008

Compliance

Mar 10, 2010 Pass or Fail - What Every Mortgage Broker Should Know About SAFE Act Training What’s bringing fear and trembling to the hearts of MLOs nationwide is the SAFE Mortgage Loan Originator Test. Some requirements (such as no felony conviction and no license revocation) are straightforward: either you can comply, or you can’t. Get the training you need – 2-Day Pre-testing Class Schedule, click here.

Jan 10, 2010 New HUD Settlement Cost Booklet – Shopping For Your Home Loan (Effective Jan 1, 2010) This booklet protects you, the loan originator and mortgage company manager! Pretty much everything clients need to know is covered—however there are some glaring omissions. Some “experts” say that the booklet is required to be given ONLY to someone who is purchasing a home. We disagree. In the Mortgage Disclosure Improvement Act, it specifically lists the transactions that require disclosures and we believe that they renamed the booklet “Shopping for Your Home Loan…” for a reason!

Fannie Mae

Mar 10, 2010 Fannie Changes More Than a Dozen Messages and Requirements – DU Version 8.0 (Effective April 17, 2010) We are all so used to DU having dated messages and even inaccurate messages with regard to condos…nice to see Fannie finally cleaning things up – as I’ve said before, Fannie Mae is going through a mid-life crisis and is remaking themselves from top to bottom. Nip/Tuck… (Fannie Mae DU Release Notes - Version 8.0)

Fannie Brings Post-Closing Reviews to Pre-Closing Auditing – Introduction to Loan Quality Initiative – LL 2010-03 – [Most Effective June 1, 2010 (Various dates)] Loan Quality Initiative or LQI for short - is a major change for the industry and will affect every aspect of the loan origination and delivery process. Coaching your borrowers is more important than ever. Make sure no one is out there getting additional credit during the process – it will stop your loan in its tracks. (SEL-2010-01/LL 2010-03)

Fannie Approves New Mortgage Insurers – LL 2010-02 (Effective February 18, 2010) Existing MI companies are maneuvering with these affiliates to allow them to continue to write new business. Don’t expect guidelines to relax though… For now, Fannie will not differentiate MI issued from these affiliates from their existing mortgage insurer. The new player is Essent Guaranty. (Fannie LL 2010-02)

Fannie Selling Guide Going Thru Huge Transformation - Announcement SEL 2010-02 With the new Selling Guide, Fannie has changed everything...from the way they organize it and update it, to a new Announcement categorization method. Can't say any of it is easier to follow, but one thing is for sure - Fannie is reinventing itself. (Fannie SEL 2010-02, dated March 2, 2010)

Feb 10, 2010 Fannie Sweetens the Deal for REO Properties thru HomePath® [Includes Mortgage Talking PointsTM flyer, Incentives to Buy Foreclosed Properties: HomeSteps® versus HomePath®] Fannie seems to have thrown this together quickly. The program was announced at the end of the day on January 28th and the facts really didn’t come out until February 3rd. Fannie makes their own rules for their REO – as they should. This incentive is not an issue for HomePath underwriting, but watch for Lenders to view this incentive within the restrictions of Interested Party Contributions (IPC) for non-HomePath financing. [Mortgage Talking PointsTMflyer, Incentives to Buy Foreclosed Properties: HomeSteps® versus HomePath®]

Fannie Mae Provides Florida Condo Financing Some Relief - Lender Letter 2010-01 Now that Florida is a Condo wasteland, Fannie is taking steps in an attempt to stabilize the market. Fannie Mae is providing liquidity to this specific market. Based on the information provided, you begin to understand the extraordinary need for this in Florida – wish they would consider some other markets, too. (Lender Letter 2010-01)

Jan 10, 2010 Fannie Issues FAQ Updates to Announcement 09-19 You know the announcement was fairly intense when the FAQs have FAQs to answer the 1s set of FAQ’s. Some operational flexibilities are noted – I’ve not seen some of them before and would not have guessed that was Fannie’s position. (Fannie 09-19 FAQ - Nov 2009 )

Fannie Rejects FHA-Approved Condos and Improves the Refi Plus Products (Effective Immediately) and February 1, 2010 – Announcement 2009-37 Fannie just gave you a gift…those past clients with funky subordinate loans can finally refinance. Rates are still good enough…time to start dialing for dollars. Watch your condos…what was easy just became more difficult. (Fannie Mae Annc. 2009-37)

Fannie Mae/Freddie in Brief

Mar 10, 2010 FHFA Extends Home Affordable Refinance Program (HARP) for Another Year (Expires June 30, 2011) Brothers and Sisters…Can I get an Amen! These programs still offer relaxed guidelines and are not subject to all the limits now on other loans…frankly, there are still a ton of eligible customers out there that can benefit. (Fannie Selling Notice: Extension of Home Affordable Refinance Program – 3-2-10 and Freddie Bulletin 2010-06 )

Feb 10, 2010 An Updated 1003 is Coming Your Way (Effective 7-1-10) Even though it’s been announced, we still can’t find the updated 1003 to tell you about what changes will be made to the form. “Smooth” is not a word I would use to describe this most recent rollout. The date effective has moved from January 1st to July 1st and then Fannie came out in November to state they are ready to accept the new information from the 1003 on March 1st.

FHA

Mar 10, 2010 FHA New Construction Document Requirements plus Cert. of Occupancy Equivalency Details – [Includes Chart: Requirements for Proposed, Under Construction and Existing, Less Than 1yr] (Effective February 2010) Prior to an online webinar on new construction, FHA issued a consolidated list of documents required for new construction files. While none of the information is new, I thought you’d find the list a helpful resource. [Download Charts & Checklists]

HUD tells Loan Correspondents to “Hold Off” on their Audited Financial Statements Many loan correspondents will get caught in a timing fiasco as they won't want to lose their ability to do FHA loans but will have to pay fees to retain an approval they won’t have much longer. Then they'll be scrambling to find a lender to accept them into the "fold" (which may still require audited financials) in order to continue originating FHA loans. Tough stuff and with no definitive dates yet, it’s really frustrating.

FHA Changes Time Period for REO Appraisal Validity Period and Second Appraisals Here’s the Catch 22 - You won’t know the date of the appraisal until you request a copy of the appraisal from the Management Company, which as the lender, you can’t do until you get the fully executed contract. Because the contract ratification date is your key, you could easily be closing AFTER the appraisal validity period has expired. But if HUD accepted the contract within that 120-day window you are fine with the existing appraisal. (FHA Mortgagee Letter 2010-08, March 8, 2010)

Feb 10, 2010 FHA Waives the 90-Day Flipping Policy (Effective 2-1-10 to 2-1-11) [Includes Mortgage Talking PointsTM flyer, Investors Wanted: FHA Issues Moratorium on the 90-Day Flipping Rule] We’ve heard from loan officers whose underwriters are “waiting for the official ML” on the flipping policy waiver before they will allow a transaction to be approved under the waiver. “When will we see an ML?” My answer: “Probably never.” Just because policy change isn’t delivered via ML doesn’t make it any less “official”. The signed announcement from HUD is attached. Get a copy to your underwriters. Download Mortgage Talking PointsTM flyer, for your real estate agents too! (Waiver of Requirements of 24 CFR 203.37a(b)(2))

FHA Increases in UFMIP - ML 2010-02 (Effective April 5, 2010) As FHA works to build the insurance fund to a level that can sustain the current and future losses I, for one, am thrilled they chose this option as opposed to a down payment increase. Hopefully your origination software will be updated for the change but don’t count on it. (Mortgagee Letter 2010-02, Increase in Upfront Premiums for FHA Mortgage Insurance, January 21, 2010)

FHA Cleaning House with a Bigger Broom - Procedures for Terminating Underwriting Authority (ML 2010-03) While the detail isn’t relevant to most of you, it’s good to understand the yardstick that’s being used to measure the quality of the loans you are originating, processing or underwriting. Your company, or the lender you broker to, may lose its ability to underwrite FHA loans. (Mortgagee Letter 2010-03, Mortgagee Approval for Single Family Programs – Extended Procedures for Terminating Underwriting Authority, January 21, 2010)

FHA Issues FAQs Related to ML 09-51 (Adoption of the Appraisal Update Report) Know your investors before you try to avoid getting another appraisal on a file because of validity expiration. I doubt we’ll see the use of this form become very popular. (FAQs – ML 09-51 Adoption of the Appraisal Update Report)

FHA 203K: The Process & The Players! With the advent of the computer and lightening speed data processing, the 203K loan is now beginning to be perceived as a valuable tool that is “saving deals” every day. The 203K-streamline mortgage has made it even easier for people to do simple repairs along with purchasing a home. But, one of the key players, Bank of America, is making it more difficult than it needs to be!

Jan 10, 2010 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) 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)

FHA Short Sales and Short Pay Offs - New Credit Policy - ML 2009-52 (Effective 12-16-2009) 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.)

FHA Issues FAQs on the New FHA Condominium Approval Process – ML 2009-46A & ML 2009-46B. [15-Page HUD FAQ Included] 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)

FHA RESPA and FHA Related Policies - The 1% Origination Cap is Gone - ML 2009-53 (Effective January 1, 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)

Freddie Mac

Mar 10, 2010 Freddie Mac Homeownership Series Now in Spanish - [Link to Download Brochures.] Download the brochures and keep them handy to send or email to your Spanish-speaking clients. Brochures are easy to customize with your contact info. Link to download all 9 of them!

Freddie using Loan Prospector to Improve Appraisal Quality Using Home Value Explorer® (Effective February 28, 2010) This is intended to be a tool – use it as such, but don’t overreact. Every 20% variance does NOT require a review or second appraisal – sometimes it can be difficult to reconcile them. Watch out for delays that may result – a review or second appraisal is not a good thing. (Freddie Mac Bulletin 2010-5)

Freddie Updates LP Credit Requirements & HVE Feedback (Effective February 28, 2010) LP Releases have effective dates, corresponding Bulletins, etc… Suffice it to say, everything is now effective and if you are not able to comply with a rule change, you need to close that loan by April 1st. (Freddie Mac February 28 Release)

Feb 10, 2010 Freddie Joins the Chorus - Just Say NO to FHA Condo Approvals (Effective 2-1-10, Bulletin 2010-2) As predicted last month when Fannie bailed on using FHA Condo Approvals, Freddie was not far behind. The odd thing about it – Freddie lumped in VA loans as eligible. VA was the first to come out and state that they would not accept FHA Condo approvals…but Freddie will buy ineligible VA loans???

Jan 10, 2010 Freddie Mac Clarifies Rules for Current Home Not Sold/Current Home Sold But Not Closed/Current Home Converted to Rental Home – Bulletin 2009-27 [Includes Mortgage Talking PointsTM flyer, Rules for Buying a Primary Residence Without Selling Current Home!] This is just one section of Bulletin 2009-27—but this is the one that trips up Real Estate Agents and Loan Officers all the time. Mortgage Talking PointsTM for your agents, for you and a great topic to discuss at your next staff meeting! (Freddie Mac Bulletin 2009-27 )

Reverse Mortgage

Mar 10, 2010 FHA Revisions to Model Home Equity Conversion Mortgage (HECM) Loan Agreement – ML 2010-07 – [Download 5 Updated HECM Forms.] If you haven’t been using Form 1009 as your HECM loan application now is the time to get into the habit. Just don’t “throw the baby out with the bathwater” and forget you still have to include the FHA/VA Addendum Form 92900-A that we normally associate with the URLA Form 1003. [Download 5 Updated HECM Forms.] (Mortgagee Letter 2010-07, March 1, 2010)

Universal Topics

Rules for Eliminating Mortgage Insurance for Conventional & FHA loans – [Includes Mortgage Talking PointsTM flyer, Rules for Dropping Mortgage Insurance: What you and your clients should know! AND Estimated Number of Years to Drop Mortgage Insurance Chart] Yep, there’s a disclosure for that! But what do the PMI termination rules really mean to the average person? Did you know that by offering a 25-year versus a 30-year fixed rate, PMI would terminate 3 years earlier? Download the Mortgage Talking PointsTM flyer and Comparison Chart of down payment amounts (5-10-15%) loan terms (15-20-15-30) and the number of years it will take to drop MI!

Lapse in the National Flood Insurance Program If you had a hiccup with a closing due to Flood Insurance being unavailable, you were not alone. For whatever reason, Congress has been extending NFIP for short intervals -- the next expiration is within 30 days or March 28, 2010.With Congress acting the way it is, the lapse could easily happen again. (Single Family News)

Feb 10, 2010 MDIA & GFE - Are Your Agents Confused? [Includes Mortgage Talking PointsTM flyer, How to Adapt to the New Disclosure Rules] The Mortgage Talking PointsTM flyer, “How to Adapt to the New Disclosure Rules” is NOT about the gory “details” of MDIA, the GFE or the HUD1. It gives real estate agents tips on how to work with buyers, sellers, title companies and how to insure smoother closings. Hold sales meetings. Email. Give to your title rep. Links to related articles included.

Official Website for Consumers to Check Your Mortgage License Online - Links to NMLS Website, FAQs & State Authorities Is your licensing info on the Consumer’s NMLS website yet? We played with the site and it’s pretty much impossible to find “individual loan officers” – consumers are going to freak out if they can’t find you. Learn a few tricks on how to find your NMLS listing-- to make sure your clients can verify that YOU hold a valid mortgage license. Link to previous article about the SAFE Act.

USDA

USDA Underwriting and Loan Closing Reminders: Multiple Subjects (January 20, 2010) RD Instructions USDA has clarified some issues that have come up within the last several months. If you do Single Family Housing Guaranteed Loans, there are some subtle updates covering: Cash Back to Borrower At Closing; Grossing Up Non-Taxable Income; Short Sales; and intent to purchase a home!

VA

Mar 10, 2010 VA Regional Loan Center Appraisal Fees and Timeliness Requirements – [Includes Website Link & RLC Rules (All 10 Regions) Provided.] YEESSSSS! VA finally published Appraisal fees & turn around time requirements on a consolidated webpage. Before, it could take some digging to get this information. These lists give you the allowed appraisal fees and turn-around times by RLC. They are attached for every Regional Loan Center (RLC) & link to consolidated page provided.

Jan 10, 2010 VA Loans and Their Deal-Saving Secrets – Seller Concessions! [Includes Mortgage Talking PointsTM What You Need to Know About Seller Concessions & VA Loans] VA is a popular loan option again, so refresh your Realtors memory on how these guidelines can benefit their VA borrower with the attached Quick Fact- VA allows sellers to pay off debt for buyers. It is also a little known fact, that the 4% limitation on seller concessions does not include closing costs. [Mortgage Talking PointsTM for your Real estate agents included!]

VA No Longer Accepting HUD/FHA Condominium Approvals – Cir. 26-09-19 [Link For List of VA Approved Condos] (Effective December 7, 2009) Simply put, if you want to do a VA loan on a condominium project, the project MUST be listed on VAs approved list. (Link Provided to get list of VA approved condos!) (Circular 26-09-19, Rescission of VA Acceptance of HUD/FHA Condominium Approvals, November 30, 2009)

VA Issues Cir. 26-10-01: Impact of New RESPA Rule on Fees. Sec 8 “Borrowers Fees & Charges” Included. (Effective May 1, 2010) VA kept their 1% origination cap and clarified that they want the “Our Origination Charge” to be itemized at settlement on the HUD-1using one of the two methods. They do not allow you to combine methods. Sec 8 “Borrowers Fees & Charges” Included. (Circular 26-10-01, Impact of New Real Estate Settlement Procedure Act (RESPA) Rule on Fees and Charges for Department of Veterans Affairs (VA) Loans)