Q&A – July 25, 2019

If a loan is approved by FHA’s total scorecard and the DE Underwriter, can the lock desk refuse a pricing exception due to credit score risk outside of FHA guidelines?

Answer: While it is not a direct compliance violation, the implications of denying a pricing exception outside of written policy can be construed as Disparate Treatment under ECOA. If it is standard practice to grant exceptions and the lock desk refuses due to “risk”, then their policy should state that “these are the conditions where [...]

2019-07-23T10:42:04-05:00July 25th, 2019|

How do I establish probability of continued employment for a Veteran who has 5 years of military service and is recently employed as a civilian?

Answer: VA requires additional analysis on the employment of a recently discharged veteran. (See guideline below.) Your underwriter may ask for a letter from the employer to document the file to show that this was done. Reference: VA Lenders Handbook Chapter 4 Analysis of Prospects for Continued Employment Cases involving recently discharged Veterans often require [...]

2019-07-24T11:04:34-05:00July 25th, 2019|

What is the waiting period for a conventional purchase with a loan modification on the borrower’s current residence?

Answer: There is no written or defined timeline from either agency (Fannie or Freddie). In fact, they do not address a modification except for a one that may be needed for construction-to-perm loan. It is not listed as a topic under their significant derogatory credit requirements. The outcome of the ‘timeline’ allowable is most likely [...]

2019-07-22T10:30:47-05:00July 25th, 2019|

Does Fannie Mae have an Energy Efficient Mortgage option?

Answer: Yes, they do. This can be found in their selling guide, section B5-3.3-01. Reference: B5-3.3-01, HomeStyle Energy for Improvements on Existing Properties (06/05/2018) Overview There are a number of HomeStyle Energy financing options available to a borrower who wishes to improve the energy and/or water efficiency of an existing property and decrease its related [...]

2019-07-23T10:01:57-05:00July 25th, 2019|

If a non-occupying co-borrower is a cousin, are they considered a family member for an FHA loan?

Answer: Unfortunately, a cousin is not considered a “family member” per the FHA  definition.  That said, the cousin can be a non-occupying co-borrower, but the LTV will be limited to 75%.  Please see the full guidelines below regarding non-occupying co-borrower transactions and the definition of a family member. Reference: 4000.1  II. A. 2. b. ii [...]

2019-07-24T10:53:28-05:00July 25th, 2019|