Recapping the Mortgage Rule Updates - September 2012

by 17 Sep 2012

Before I get started on the mortgage rule and regulation updates from the last 30 days, I wanted to mention that there is a free article for you this month about the Consumer Finance Protection Bureau’s proposed no point, no fee rules, with an example of how it would work in real life! 

Okay, so a couple of FHA updates for you.

FHA has a little-known area in their appraisal section in regard to what they call unique properties. HUD has given guidelines when it comes to log homes, extra small homes, lower than normal ceiling heights, and so on. If a property has excess land, you’ll find guidelines on how to get an FHA loan. Also covered are commercial use of property and homes that have been moved to a new foundation. You’ll find a Mortgage Talking Points ™article to email and share with your real estate agents with all the details.

There is a new HUD Mortgagee letter regarding documentation required to verify social security income. Basically, they are now in line with Fannie and Freddie that if the award letter has no expiration date, the lender is to consider that the income is likely to continue. This is great news for everyone, and loan officers and Underwriters finally have something to cover their backsides with specific documentations. Keep this 12-15 Mortgagee Letter handy until they get the Handbook updated.

Oh, one last thing abut FHA – it really doesn’t need an article written about it, but is important nevertheless – FHA updated their Total Scorecard Users Guide. It’s been updated on the website, including the video training class called FHA Total Score Card – 8 Deal Killers. If you are a subscriber, it’s included. If not, you can access it for $9. http://www.mortgagecurrentcy.com/video_training/course_list.php

Now, on to a big announcement for some of you in high-cost areas. VA has increased quite a few loan limits, so take advantage! Comb those “VA jumbo” past contacts and see if there are any Veterans you can help out with purchases and refinances. The higher amounts are for purchase contracts and refis between August 6 and December 31, 2012.

If there is one article that you need to read in this issue, it’s Fannie’s announcement 2012-07 with a ton of updates that will go into effect with the release of DU 9.0 on October 20, 2012. The biggest change here: FNMA is retiring the Comprehensive Risk Assessment Worksheet that it created years ago to assist lenders in assessing risk on a manually underwritten loan. Now FNMA is moving many of these tips and risk awareness/parameters to their Eligibility Matrix, which include DTI and minimum credit score flexibility restrictions.

You’ll also want to read the latest HARP 2.0 FAQ’s that came out on August 16. They did not highlight the changes in bold this time around, so we had to go back to the previous one to find out what was changed and what was added. There were a total of 5 updates. One of the questions has to do with subordinated financing, which will be updated when DU 9.0 is live on Oct 20th. The other biggie has to do with reps and warranties – which is a huge gift Fannie is giving to lenders and underwriters.

And, if you are doing Rural Housing loans, we sent an email to subscribers a couple of weeks ago that the money for refi’s is all gone for the fiscal year ending October 1st. And if you have a purchase transaction sitting there waiting for a loan commitment for USDA, it has to have a conditional commitment by Sept 30 or new annual and guarantee fees go into effect. If the files aren’t committed by then, you must redisclose.

Call your local USDA office and find out their backlog. You may also want to warn your clients and real estate agents that there is a good possibility that they may have to pay a higher fee. One last thing – we have posted the latest NMLS list of licensing and continuing ed requirements, by state. Check out the document and see what’s required in your state.

Remember, “Getting a loan approved and closed IS rocket science.” You can read all the articles for just $1. Click Here to Access. http://www.mortgagecurrentcy.com/subscription_options.php

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