General Topics affecting / related to the 1-4 unit Residential Real Estate Financing Market

The following changes apply to new case numbers assigned on or after November 17, 2009:

o        Seasoning:  At the time of application, the borrower must have made at least 6 payments within the month due on the FHA-insured mortgage being refinanced.

o        Payment History:  At the time of loan application, the borrower must exhibit an acceptable payment history as follows:

§         For mortgages with less than a 12 month payment history, the borrower must have made all mortgage payments within the month due.

§         For mortgages with a 12 month payment history or greater, the borrower must have 0x30 in the last 12 months, and made all mortgage payments within the month due for the three months prior to the date of the loan application.

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With the changes happening to the basic underwriting guidelines of Conventional loan programs so quickly I thought I'd create this blog post to highlight *_some_* of the potentially deal killing details that I've come across in the course of my own business...

  • MI for conforming loans on Condo's is on the verge of being extinct (consider FHA as an alternative).  41% max backend DTI for all MI companies.  Doesn't matter what DTI Lender will allow.
  • Reserve Requirements when purchasing Investment Properties. 
    Fannie Mae Announcement re: borrowers purchasing multiple investment properties
  1. When the borrower will own one to four financed properties (including the subject property) the reserve requirements are:

    * two months of reserves on the subject…

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With the introduction of the Home Affordable Modification Program (HAMP) many homeowners that are not currently behind on their mortgages are being faced with a situation where they are being offered potential relief.

Obviously their first reaction would be to accept this relief but the government had done something smart (yes, give credit where credit is due).  They made it mandatory for loan servicers to report derogatory history to the credit bureaus for all borrowers who participate.  The creators of HAMP did this to weed out the people that can afford their payments but want a modification of their loan terms on the taxpayer dollar.  

Those in true financial need won't mind, they are most likely already behind on their payments and their credit…

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HO-6 Insurance Requirements for Condominium and PUD Properties 

HO-6-CONDOMINIUM UNIT OWNERS COVERAGE

 

Here is an excerpt from a memo sent to us by one of our biggest lenders: 

Borrowers must show evidence of hazard insurance coverage for all condominium projects with attached units, including two- to four- unit projects, that covers fixtures, equipment, and other personal property inside individual units if they will be financed by the mortgage.  Borrowers must show evidence of a “walls-in” coverage policy (commonly known as HO-6 policy) unless they can document that the master policy provides the same interior unit coverage. The master policy must include replacement of improvements and betterment coverage to cover any improvements that the…

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As I said in my last blog SB94 will have an effect on how consumers handle their mortgages SB94 has already passed the Senate and the community and now goes to the assembly there are many reasons to think this will help as well as many reason to think it would not, the bill it self is as follows 

                 DESCRIPTION   

          This bill would prohibit persons from charging advance fees to  
          borrowers in connection with a loan modification, and require  
          those who wish to charge a fee for loan modification services  
          (after performing them) to provide a specified notice to  
          borrowers regarding other options available to the borrower.   
          The violation of those…

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HOA Assistance Program offered through PWR

HOA Assistance program offered through my local association of realtors (Pacific West Association of Realtors)

Program offered through Pacific West Association of Realtors for homeowners in Southern LA and Northern Orange counties.  Funds for this program are from a charity account setup by fellow Realtors and a grant from a California Association of Realtors fund.  The program will pay up to $250/month & up to $3000 per year to the Home Owners Association for the qualifying borrower.  This program has helped over 30 families since its inception in 2007

 

Be sure to check with our office for qualifying guidelines and available funds before applying.

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I really don't understand this whole new phenomenom about REO listing agents (and now short sale & standard transaction agents) requiring a pre-approval from a "Direct Lender".  Maybe I'm just bitter because my client who was told by a "Direct Lender" that their financing was secure and all they had to do was find a property.  So I found them a property and then 20 days later the "Direct Lender" denies the client due to credit/employment/income factors (layered risk) that were present prior to the client being issued their pre-approval.  Maybe its because for the most part the loan reps I see at Direct Lenders at the banking institutions I go to (Bofa, Chase, Wells Fargo) are young, seemingly inexperienced and likely unlicensed.  Many loan reps working at…

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Did you know that the state of California is offering a $10,000 tax credit for homebuyers buying new construction?

Well time is running out on this great opportunity.

  
For more information go to CA Franchise Tax Board website at:

http://www.ftb.ca.gov/individuals/New_home_Credit.shtml

 

Update: as of July 3rd, 2009 the state has run out of funds for this program.  Sometimes when sales people are telling you that you'd have to "Act Now" its actually true....

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If all borrowers are required to sign IRS 4506-T forms that allow underwriter to verify income documentation, why do lenders require income documentation?  Shouldn't they just be able to take a signed 4506-T form get the IRS transcript and verify the income coming directly from the IRS?  Wouldn't the world be easier for loan originators and processors too if they could just order a 4506-T verification direct from the IRS covering a 2 year time period, get the transcript and divide by 24 to get the borrowers monthly income?

 

Just thinking out loud into the blogosphere...

 

 

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Here is an interesting application of the job loss protection gurauntees the auto industry introduced being applied to the Real Estate Market

http://www.mortgagenewsdaily.com/channels/video/79154.aspx

 

 

alligator_rainy_day_450  

 

 

Here is the website for the program the Real Estate Company is using as the insurance backstop for making this claim

http://www.helpprogram.org/index.htm

 

C.A.R. launches Mortgage Protection Program (Thursday, April 2, 2009)

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