April 2009
MortgageCurrentcy.com Rules and Regulation Updates

View The Latest Q & A Issue


USDA Rural Development Single Family Housing Funds Available - Mortgage Talking PointsTM "Quick Reference Guide to USDA Loans" (Effective March 20, 2009)

$10 Billion (yes, that's billion with a B). The USDA has already used 25% for "purchase transactions" that have been on HOLD since 1/9/2009. When the "dust" settles, money will be released for refis. Not every community qualifies - but if yours does, it's the best thing since sliced bread! Links to check counties PLUS Mortgage Talking PointsTM "Quick Reference Guide to USDA Loans". (USDA Letter "Single Family Housing Guaranteed Loan Program Available Program Funds", March 20, 2009)

Supporting Resources:

Fannie Mae

Fannie Raises High Balance Loan Limits & Minimum Credit Scores - Fannie High-Balance LTV & Credit Score Chart Included (Effective March 30, 2009)

It’s about time--borrowers who were previously eligible under the temporary higher loan limits in 2008 will now be eligible again. Take a look at the loans you closed in 2008 that would benefit from expanded loan limits. Link provided to the Loan Limit Geocoder to assist in determining the maximum loan amount available for a specific property. (Fannie Mae Announcement 09-08 - Fannie Temporary High-Cost Area Loan Limits & Revised Eligibility Requirements for High-Balance Mortgage Loans)

Supporting Resources:


Fannie Mae Project Eligibility Review Service (PERS) Launched for Condo/Project Approvals. Project Submission Forms Included (Effective January 15, 2009)

Fannie has brought back PERS—it’s a way to determine IF a new—or newly converted—condo project even qualifies in the first place. While CPM™ is still around, condos in Florida MUST used PERS…no exceptions. The real benefit? LTV’s—up to 97% OO! E-Fannie Mae Notice - March 2009 Fannie Announcement 08-34: Project Review Service & Changes to Condo and Co-Op Project Policies Fannie Project Review Summary FAQs


Fannie Releases New Selling Guide (Effective April 1, 2009)

So Fannie puts out a new selling guide meant to make life easier. Seriously, you have to wonder how they thought it makes the process easier—now you have to FIND the individual announcements in the guide! But you can still count on Mortgage Currentcy to keep it simple and to the point. (Fannie Mae Announcement 09-06 – New Selling Guide)


Fannie Updates Selling Guide Rules for Government Loans, Lease-Purchase Option for Non-Profits and Community Living Loans (Effective 4-1-09)

If you are selling government loans to Fannie—then you need to read this. If not, don’t waste you time! Fannie establishes 580 as a minimum FHA credit score. Another biggie is the VA 25% guarantee of the ORIGINAL LOAN AMOUNT. Oh, and Construction/Perm rules have become more liberal. (Fannie Mae Announcement 09-09 – Product Updates: Government Mortgage Loans, Lease-Purchase Option, and Community Living Group Homes)

Freddie Mac

Freddie Revises Condominium Requirements (Effective July 1, 2009)

This is one of the few times Freddie is stricter than Fannie. Read Fannie’s PERS article. Even after approved by Fannie, Freddie still wants to review! But why? (Freddie Mac Bulletin 2009-7 - March 31, 2009)


FHA Limits - Cash-out Refinance - 85% Maximum LTV is back! (Effective April 1, 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:


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)

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:


FHA Re-Establishes Monitoring of Mortgagees (SWAT) (Effective April 2, 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:


VA Market Conditions Addendum to Appraisal - 1004MC (Effective April 1, 2009)

No longer can the appraiser simply check the Neighborhood Market Condition box as Stable, Declining, etc. It’s like your math teacher asking you to “show your work” for your homework answers. (VA Circular 26-09-4, March 27, 2009)

Supporting Resources:


VA New Appraisal Requirements on Foreclosed Properties (Effective March 31, 2009)

Biggest thing to remember here is that if you are the lender/owner on a foreclosed property your SAR (Staff Appraisal Reviewer) can’t issue the Notice of Value (NOV). This will slow down your processing time. Plan for it. (Circular 26-09-5, March 31, 2009)

Supporting Resources:


VA Relaxes Rules - Sale of New Construction Properties Owned by Lenders - (Effective March 31, 2009)

Great way to help clear out some of the new construction inventory on the market right now. VA has taken a more cautious approach by requiring the appraisal be reviewed by one of their own appraisers…but hey…who can blame them. This is 100% financing we are talking about. (Circular 26-09-6, March 31, 2009)

Supporting Resources:


VA Requires Sales Contract to be provided to Appraisers

Geez, folks. it’s an embarrassment that VA had to even issue this letter. So apparently some lunkheads out there thought that the details contained in a sales contract were not important to an appraiser. (VA Circular 26-09-3, March 27, 2009)

Supporting Resources:


VA Change to the Certificate of Eligibility - Eliminating Birth Date on COE

No big dealio here - but it's a privacy issue that VA wants to eliminate from the COE! (VA Circular 26-09-2, March 12, 2009)

Supporting Resources:


S.A.F.E. Act - What You Need to Know About the National Licensing Laws (Effective August 1, 2009)

Are you prepared to be fingerprinted and submit your FBI background check? The National Licensing Law for Loan Originators is just around the corner! It applies to loan officers who are brokers, bankers and yes, even LO’s who work for a bank or credit union!