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					FHA                                                                                                                                            Wholesale




                                                                       Chapter 7: FHA

                                                                       General Requirements
Introduction            This Product Guide outlines policies for Federal Housing Administration (FHA) programs. An FHA loan is a Federal Assistance Mortgage
                        Loan insured by the Federal Housing Administration. An FHA loan allows for the refinance or purchase of a home with a low down
                        payment and more flexibility than a conventional mortgage. FHA primarily serves people who cannot provide a conventional down
                        payment or otherwise do not qualify for PMI.

                        For any issues not specifically addressed in this Product Guide, refer to the FTMC FHA Lending Manual.
Eligible States         Based upon individual Broker Approval through FHA
Eligible Products and                         UNIFI Product Codes                                       Closing Doc Set                        Term
Product Codes                       Fixed 15                               400                             VMP 1R                         15 years
                                      Fixed 30                          401                               VMP 1R                         30 Years
                                                                                                                                                      1


                                  3/1 Libor ARM                         411                               VMP 590                         30 Years
                                  5/1 Libor ARM                         412                               VMP 590                         30 years
                        1
                        Amortization terms from 181 – 360 months may be entered on product 401- Fixed 30 YR FHA.
Maximum Loan Amount     The maximum loan amount for an FHA Insured Mortgage is determined by individual county limits. The individual county limits can
                        be accessed by clicking on the following link: HUD County Limits
Minimum Loan Amount     None

                                                                        Program Eligibility
Maximum LTV/CLTV                                                                     Purchase
and Minimum FICO
                                                   LTV                            CLTV With Secondary Financing                                FICO
                                                                                                                                    660 in states of FL and IL
                        1-4 Unit Primary          96.5%                                     Unlimited
                                                                                                                                    640 in all other states
                                                                               Rate/Term Refinance
                                                   LTV                     CLTV With New or Existing Secondary Financing                       FICO
                                                                                                      1                             660 in states of FL and IL
                        1-4 Unit Primary          97.75%                                     97.75%
                                                                                                                                    640 in all other states
                                                                          Streamline Refinance with Appraisal




1                                                                                                                                 09/22/2011
FHA                                                                                                                                                  Wholesale
                                                                              Program Eligibility
                                                        LTV                        CLTV With Existing Secondary Financing                            FICO
                                                                                                                                                                       2
                                                                                                                                          660 in states of FL and IL
                             1-4 Unit Primary          97.75%                                        125%                                                         2
                                                                                                                                          640 in all other states
                                                                             Streamline Refinance without Appraisal
                                                        LTV                      CLTV With New or Existing Secondary Financing                       FICO
                                                                                                                                                                       2
                                                                                                                                          660 in states of FL and IL
                             1-4 Unit Primary            N/A                                         125%                                                         2
                                                                                                                                          640 in all other states
                                                                                              Cash Out
                                                        LTV                                          CLTV                                            FICO
                                                                                                         With Existing Secondary
                                                                          With New Secondary Financing
                                                                                                         Financing
                             1-4 Unit Primary                                                                               1          660 in states of FL and IL
                                                        85%                          85%                              85%
                                                                                                                                       640 in all other states
                          Maximum LTV cannot exceed the FHA Mortgage Limits. Refer to: HUD County Limits for individual county limits.
                        2
                         There is no minimum FICO for non-credit qualifying streamline refinances where Fifth Third is the current Servicer
Occupancy                            Primary Residence                            Investment Property                                Second Home
                                           Eligible                                      Ineligible                                      Ineligible
Acceptable AUS Findings           Purchase and Non-Streamline Refinances                                             Manual Underwrite
                                       Total Scorecard Accept (LP or DU)                  File must be Manually Underwritten if:
                                                                                               Total Scorecard returns a Refer OR
                                                                                               Transaction is a Streamline Refinance

                                                                          Credit Requirements
                                         FHA Total Scorecard Accept                                                     Manual Underwrite
Minimum Credit Score       660 in states of FL and IL                                            If a credit score is present on the credit report, the minimum FICO
                           640 in all other states                                               must be:
                           This requirement excludes all 5/3 to 5/3 Non-Credit                        o 660 in states of FL and IL
                           Qualifying Streamline Refinance transactions                               o 640 in all other states
                                                                                                 When none of the occupant borrowers have credit scores, and
                                                                                                 TOTAL Scorecard renders an Accept/Approve, the loan must be
                                                                                                 manually downgraded to a Refer and the borrower(s) must be
                                                                                                 underwritten using non- traditional credit
Maximum Debt-to-Income Per Total Scorecard Feedback Certificate                              31%/43%
Ratio                                                                                            Ratios may be exceeded with compensating factors on a
                                                                                                 case-by-case basis determined by the Underwriter
Minimum Cash Reserves 1-2 Unit Primary             Reserves are not required, but may be used as a compensation factor
                                                   All reserves listed on the loan application must be documented in the loan file




2                                                                                                                                       09/22/2011
FHA                                                                                                                                                   Wholesale
                                                                             Credit Requirements
                                               FHA Total Scorecard Accept                                                Manual Underwrite
                             3-4 Unit Primary           3 months reserves required
                                                        Reserves cannot be derived from a gift
                                                        All reserves listed on the loan application must be documented in the loan file
Living and Land Trusts       Ineligible
Required Rental History      12 months rental history required for loans receiving a TOTAL Scorecard Refer Recommendation
                                      0 X 30 in the most recent twelve months required
Minimum Borrower
Contribution and         The borrower must have a minimum investment of 3.5 % of the lesser of the appraised value or the sales price
Downpayment                        Closing costs may NOT be used to help meet the minimum 3.5% required investment
Requirement for Purchase           Closing costs are not considered mortgage amount/cash investment calculation for purchase money mortgages
Transactions
Maximum Financing and        Up to 6% in sales contributions may be in the form of any of the following contributions given by the seller or any other party involved
Sales Contributions          in a mortgage transaction:
                                   o Loan discount points
                                   o Loan origination fees
                                   o Interest rate buydowns
                                   o Closing cost assistance
                                   o Payment of condominium fees
                                   o Down payment assistance
                                   o Monetary gifts
                                   o Personal property
                                   o UFMIP (entire payment must be paid at the time of closing, a partial payment is not acceptable)
                             Contributions from sellers or other interested third parties to the transaction that exceed 6% of the sales price or other financing
                             concessions must be treated as inducements to purchase, thereby reducing the amount of the mortgage
Borrower Paid Closing        The borrower may be charged customary and reasonable fees and charges
Costs                        The cost for any item charged to the borrower must not exceed the actual cost paid by FTMC, or charged to FTMC by the
                             service provider
                             Borrower cannot be charged a Tax Service Fee
                             These costs may be used to meet the borrower’s minimum investment requirement excluding any discount paid by the borrower
                                                                                        nd
Existing Subordinate     Subordinate financing may remain in place as long as the 2 lien will be clearly subordinated to the new mortgage subject to LTV/CLTV
Financing                restrictions and guidelines. In addition:
                             The entire lien must be subordinated at refinance
                             The Combined Loan to Value (CLTV) ratio must be calculated using the maximum accessible credit limit of the existing subordinate
                             lien
New Secondary Financing The following information must be placed in the loan file:
                                   Documentation showing the amount of funds provided to the borrower for each transaction AND
                                   Copies of the loan instruments for the endorsement binder




3                                                                                                                                        09/22/2011
FHA                                                                                                                                                     Wholesale
                                                                           Credit Requirements
                                           FHA Total Scorecard Accept                                                    Manual Underwrite
Collateral Requirements        Per AUS with Total Scorecard Accept                                      Must be full appraisal for Manually Underwritten loans
                          If at any time multiple valuation products are obtained, the most comprehensive valuation must be utilized. Under no circumstance
                          should a valuation be deleted from a loan file. All loans requiring an appraisal must adhere to the Corelogic Collateral Manager
                          Cascade.
                          Appraisal Transfer           Appraisals prepared for another financial institution are acceptable provided all of the following conditions are
                                                       met:
                                                               Appraisal MUST come directly from the previous financial institution
                                                                     o Borrower CANNOT provide appraisal
                                                               Obtain written assurance that other lending institution, not the AMC, follows Appraisal Independence
                                                               Guidelines in connection with the loan being originated
                                                               It is an unaltered, original report
                                                               FTMC verifies the report is signed and dated by the appraiser
                                                               For appraisals ordered by a correspondent, closing in the name of a broker and subsequently
                                                               transferred to FTMC are considered ordered by a broker and are unacceptable for lending purposes
                                                                                 A new appraisal showing Fifth Third as the client is required

                                                      **Under USPAP requirements, the appraiser may not change the name from the original lender/client**

                                                      Note: Due to the case number being assigned to the subject property, at the borrower’s request, the case
                                                      number must be assigned for the new transaction using the Case Transfer function in the FHA Connection.
Ineligible Properties         Manufactured Homes
                              Attached housing located in Florida
FHA Flipping Waiver       A property may be purchased within 90 days of the seller’s acquisition if ALL of the following apply:
                                  Increase in value is < 20%
                                  Increase in value is supported by the appraisal
                                  Transaction is arms length and no identity of interest between the buyer and seller or other interested parties exists. Ways the
                                  Underwriter can ensure there is no inappropriate collusion or agreements between parties is to assess and determine the
                                  following:
                                               Seller holds property to title
                                               LLCs, corporations or trusts that are serving as sellers were established and are operated in accordance with
                                                  applicable state and Feral law
                                               No pattern of previous flip activity exists for the subject property, as evidenced by multiple title transfers within a
                                                  12-month time frame
                                                        VERIFY ON TITLE NO MORE THAN 3 TRANSFERS HAVE BEEN MADE IN THE PAST 12 MONTHS
                                               Property was marketed openly and fairly, via MLS, auction, For Sale By Owner offering or developer marketing

                                  Properties with an increase in value that is ≥ 20% are NOT eligible




4                                                                                                                                          09/22/2011
FHA                                                                                                                                               Wholesale
                                                                       Credit Requirements
                                        FHA Total Scorecard Accept                                                 Manual Underwrite

                       Red Flags – Require Additional Review
                              Properties with contracts that refer to an “assignment of contract of sale” are not eligible
                              Property has had limited time on market, which can be indicative of a non-arms length transaction
Condominium Procedures                      Loans currently listed on FHA’s Approved Condominium List MUST be submitted to the Fifth Third Condo
                                            Review Desk for approval.

                                             The following documents are required at time of submission:
                                                         o FHA Case Number Assignment
                                                         o Fifth Third Condo Questionnaire
                                                         o Annual Budget
                                                         o Balance Sheet
                                                         o Insurance
                                                         o Satisfactory Appraisal (submitted prior to final approval of the condominium)

                                             Insurance Requirements:
                                             Hazard Insurance
                                             The Homeowner’s Association (HOA) is required to maintain “master or blanket” property insurance in an amount
                                             equal to 100% of current replacement cost of the condominium exclusive of land, foundation, excavation and other
                                             items normally excluded from coverage. If the HOA does not maintain 100% coverage, the unit owner may not
                           FHA Approved      obtain “gap” coverage to meet this requirement.
                             Projects
                                             HO-6 Coverage
                                             If the master policy does not include interior unit coverage, including replacement of interior improvements and
                                             betterment coverage to insure improvements that the borrower may have made to the unit, the borrower must
                                             obtain a “walls-in” coverage policy (HO-6 policy).
                                             The policy must provide coverage in an amount that is no less than 20% of the condominium unit’s appraised
                                             value.

                                             Liability Insurance
                                             The HOA is required to maintain comprehensive general liability insurance covering all of the common elements,
                                             commercial space owned and leased by the owner’s association, and public ways of the condominium project.

                                             Fidelity Bond/Insurance (Employee Dishonesty)
                                             Required for new and established condominium projects with 20 or more units. The HOA must maintain this
                                             insurance for all officers, directors, and employees of the association and all other persons handling or responsible
                                             for funds administered by the association. The coverage must be no less than a sum equal to three months
                                             aggregate assessments on all units plus reserve funds.




5                                                                                                                                    09/22/2011
FHA                                                                                                                        Wholesale
                                                   Credit Requirements
                    FHA Total Scorecard Accept                                              Manual Underwrite

                         Flood Insurance (When Applicable)
                         Insurance coverage equal to the replacement cost of the project less land costs or up to the National Flood
                         Insurance Program (NFIP) standard of $250,000 per unit, whichever is less. In the insuring of a residential
                         condominium building in a regular program community, the maximum limit of building coverage is $250,000 times
                         the number of units in the building (not to exceed the building’s replacement cost). The HOA, not the borrower or
                         individual unit owner, is responsible for obtaining and maintaining adequate flood insurance under the NFIP on
                         buildings located in a Special Flood Hazard Area (SFHA). The flood insurance coverage must protect the interest of
                         borrowers who hold title to an individual unit as well as the common areas of the condominium project. If the FHA
                         Roster Appraiser reports that buildings in a condominium project are located in a SFHA Fifth Third is responsible
                         for ensuring that the HOA obtains and maintains adequate flood insurance on buildings located within the SFHA,
                         per Mortgagee Letter 2009-37.

                         The FHA Approved Condo List may be viewed at the following link:
                         FHA Approved Condo List
        Projects NOT     Project must be submitted directly to HUD for the HUD Review and Approval Process (HRAP)
      Approved by FHA            o The MLO must work in conjunction with the Condominium’s Home Owner’s Association to submit the
          (New and                  Project to HUD for approval
         Established             o Refer to Mortgagee Letter 2009-46B for more information
          Projects)
                         Project approval is not required for Site Condominiums.
           Site
       Condominiums                  o   Condominium Rider is required
                                     o   Site Condos must be appraised on SFR Appraisal Form
                                     o   The Section of the Act for a Site Condo is 203(b)
          All FHA
        Streamline
                         Project approval is not required.
      Refinances and
      FHA/HUD REOs
                         The following types of Condominium Project approvals will continue to be required to be submitted directly to HUD
                         for approval:
                                      o Condo Annexation for Additional Phasing
                                      o Proposed Construction
      All Other Condos                o Condominiums Under Construction or Existing for < 1 Year
                                      o Existing Condominiums that are NOT currently FHA approved; Project Completed > 1 Year (If
                                         entire project needs approval)
                                      o Condo Conversions with an Operating Association
                                      o Condo Conversions with a Non-Operating Association




6                                                                                                             09/22/2011
FHA                                                                                                                                               Wholesale
                                                                     Credit Requirements
                                     FHA Total Scorecard Accept                                                   Manual Underwrite
                                          FHA Contact Information for Developer/HOA:

                                           Atlanta Homeownership Center
                                                            ATTN: James A. Gullatte, Chief Technical Branch I
                                                            7th Floor
                                                            5 Points Plaza
                                                            40 Marietta Street
                                                            Atlanta, GA 30303-2806
                                                            Phone: 1-800-225-5342
                                                            Email: Hud@custhelp.com

                                           Philadelphia Homeownership Center
                                                             ATTN: Darlene Shannon, Chief Technical Branch I
                                                             The Wanamaker Bldg
                        FHA HOC                              100 Penn Sq East
                        Addresses                            Philadelphia, PA 19107-3389
                                                             Phone: 1-800-225-5342
                                                             Email: Hud@custhelp.com

                                           Denver Homeownership Center
                                                           ATTN: Technical Support Branch
                                                           21st Floor
                                                           1670 E. Broadway
                                                           Denver, CO 80202
                                                           Phone: 1-800-225-5342
                                                           Email: Hud@custhelp.com


                                           For additional information click here.


                                                                      Transactions
Paying off a Land   If the new FHA loan is to complete payment on a land contract, in which the borrower does not have title to the property, the new
Contract            mortgage may be processed as either a purchase or refinance with maximum insured financing. The borrower cannot receive any cash
                    back. If all loan proceeds are used to pay the balance on the land contract and eligible repairs, renovations, etc. , the LTV is applied to the
                    lesser of:
                         The appraised value OR
                         The total cost to acquire the property (original purchase price, plus any documented costs incurred for repairs, rehab, renovation or




7                                                                                                                                    09/22/2011
FHA                                                                                                                                           Wholesale
                                                                     Transactions
                         weatherization), plus allowable closing costs and if treated as a refinance, discount points
Purchase and Rate/Term   The combined amount of the first and second mortgages cannot exceed the applicable LTV ratio and the maximum base
Refinance                mortgage limit for the area
                         The repayment term for the second mortgage must not provide for a balloon payment before ten years (or such term acceptable
                         to FHA)
                              o If the property is sold or refinanced, and must permit prepayment by the borrower, without penalty, 30 days advanced
                                  notice must be sent out to the mortgage holder
                         The required monthly payment under both the insured mortgage and the second mortgage or lien, plus other housing expenses
                         and all recurring charges, cannot exceed the borrowers reasonable ability to pay
Rate/Term Refinance      Appraisal is required
                         Borrowers must be current on the mortgage being refinanced for the month due prior to the month in which they close the refinancing
                         AND for the month in which they close
                         The Underwriter must review the payoff to insure the mortgage payment due for the previous month has been paid and payoff
                         indicates mortgage is current
                         In determining the existing debt as part of the mortgage amount calculation, the mortgage may include accrued late charges and
                         escrow shortages
                         Prepaid expenses may include per diem interest, hazard insurance premium deposits, MIP premiums, tax and insurance escrows
                         Delinquent interest on existing lien may not be included
                         Borrower may not receive cash back at closing in excess of $500
Cash-Out Refinance       Appraisal is required
                         The Underwriter must document that the borrower has an acceptable payment history and meets ALL of the following:
                              o Mortgage being refinanced is current
                              o All payments on the mortgage have been made within the month due for the previous 12 months
                                        For mortgages with more than 6 months and less than 12 months of payment history, the borrower must have made
                                           all payments when due
                                        Mortgages with less than 6 months of payment history are not eligible for a cash-out refinance
                         Borrower may qualify up to 85% LTV if all of the following conditions are met:
                              o Most recent 12 months mortgage/rental history must be 0x30
                              o Subordinate financing may remain in place regardless of CLTV, but must re-subordinate to the new first mortgage
                              o New subordinate financing is limited to 85% CLTV
                              o All borrowers must sign the Note
                              o Non-Occupant borrowers are not permitted
                                                                 Seasoning Requirements on Cash-Out Refinance
                         If the property was acquired > 12 months prior to the loan application as the borrower’s primary residence, the maximum LTV/CLTV is
                         85% of the appraised value.
                         If the property was acquired < 12 months prior to the loan application as the borrower’s primary residence, the mortgage amount is
                         limited to the lesser of 85% of the appraised value or 85% of the sales price of the property when acquired. The previous sales price
                         does not need to be taken into consideration if the property was acquired as the result of an inheritance and is or will become the




8                                                                                                                                09/22/2011
FHA                                                                                                                                           Wholesale
                                                                     Transactions
                          borrower’s primary residence.
Streamline Refinance                                                             General Requirements
                       Streamline Refinances are designed to lower the monthly principal and interest payments on a current FHA insured mortgage and must
                       involve no cash back to the borrower except minor adjustments, not to exceed $500. Minor adjustments should only be from changes in
                       actual fees collected on the HUD-1 versus initial fee quotes on the Good Faith Estimate which were used to determine the loan amount.
                       The loan amount should never be calculated in such a fashion as to ensure the borrower is getting money back at the closing table.
                       Streamline Refinances can be made with or without an appraisal.

                              CAIVRS check is not required
                              o When a CAIVRS number is obtained from FHA Connection, the information must be reviewed and utilized regardless of
                                   whether or not the selected program requires the CAIVRS to be pulled
                              LDP (Limited Denial of Participation) and GSA (General Services Administration) must be checked and cleared
                              o The Underwriter must note the date cleared and findings received on the 92900-LT
                              At the time of application, the borrower must exhibit an acceptable payment history
                              o For mortgages with 12 month payment history, the borrower must have made all mortgage payments within the month due
                              o For mortgages with 12 months payment history, the borrower must have no more than 1x30 in the preceding 12 months
                                   AND
                              o Made all mortgage payments within the month due for the 3 months prior to the loan application
                              Junior subordinate liens may be subordinated with a maximum CLTV of 125%
                              The outstanding principal balance for a Streamline Refinance with or without an appraisal may include interest charged by the
                              servicing lender when the payoff is not received on the first day of the month, but may not include delinquent interest, late
                              charges or escrow shortages

                              Seasoning of Mortgage
                              On the date of the case number assignment ALL of the following must be true:
                              o The borrower must have made at least 6 payments on the FHA-insured mortgage that is being refinanced
                              o At least 6 full months must have passed since the first payment due date of the refinanced mortgage
                              o At least 210 days must have passed from the closing date of the mortgage being refinanced

                               Certifications/Verifications:
                               o If assets are needed to close, all assets submitted must be verified and documented
                       Refer to the FHA Lending Manual for additional guidance on certifications/verifications.

                              Net Tangible Benefit:
                              Net Tangible Benefit must be determined on all Streamline Refinance Transactions. Net Tangible Benefit is defined as:
                              o Reduction in the total mortgage payment
                                          A 5% reduction to the P&I of the mortgage payment plus the annual MIP OR
                                          Refinancing from an ARM to a Fixed Rate




9                                                                                                                                09/22/2011
FHA                                                                                                                                               Wholesale
                                                                           Transactions
                                     Refer to the following table to determine the Net Tangible Benefit requirements for various refinance transactions:

                                                                           Net Tangible Benefit Requirements

                                               Current Product Type                                   New Product Type
                                                                                      Fixed Rate                              ARM
                                           Fixed Rate                      Reduction of at least 5% of P&I Reduction of at least 5% of the
                                                                           and Annual MIP                      P&I and Annual MIP
                                           1 Year ARM                      New interest rate no greater        New interest rate at least 2%
                                                                           than 2% above the current           below the current interest rate
                                                                           interest rate of the ARM            of the ARM
                                           ARM during Fixed Rate           Reduction of at least 5% of P&I Reduction of at least 5% of P&I
                                           period                          and Annual MIP                      and Annual MIP
                                            ARM during Adjustable          New interest rate no greater        New interest rate at least 2%
                                           period                          than 2% above the current           below the current interest rate
                                                                           interest rate of the ARM            of the ARM
                                           Example: When refinancing from a Fixed rate to a Fixed rate, reduction of at least 5% of P&I and
                                           Annual MIP is required

                                    Reduction in Term:
                                    For transactions that include a reduction in the mortgage term, the loan must be underwritten and closed as a Rate/Term
                                    Refinance
All Non-Credit Qualifying    Not permitted to be run through TOTAL except under the following circumstance:
Streamline Refinances               Loans inadvertently run through TOTAL Scorecard may be processed as non-credit qualifying streamlines requiring no
                                    documentation to verify values submitted
                                    If the loan is run through TOTAL, the following is required:
                                         o Underwriter must enter their Direct Endorsement (DE) designation in FHA Connection AND
                                         o Verify that ZFHA is NOT listed as the Underwriter in FHA Connection

                             Verbal Verfication of Employment
                             A Verbal Verfication of Employment is not required.

Fifth Third to Fifth Third   All FHA non-credit qualifying streamline refinances, where Fifth Third IS the current Servicer:
Streamline Refinance                 No minimum FICO required

                             At the time of loan application, the borrower must exhibit an acceptable payment history as described below:
                                      For mortgages with less than a 12 months payment history, the borrower must have made all mortgage payments within the
                                      month due




10                                                                                                                                       09/22/2011
FHA                                                                                                                                                Wholesale
                                                                            Transactions
                                   For mortgages with a 12 months payment history or greater, the borrower must have:
                                        o Experienced no more than one 30 day late payment in the preceding 12 months AND
                                        o Made all mortgage payments within the month due for the three months prior to the date of loan application
Non-Fifth Third to Fifth   All FHA non-credit qualifying streamline refinances, where Fifth Third is NOT the current Servicer require:
Third Streamline                   A tri-merge credit report must be generated/ supplied and actual FICO’s must be entered into the system to ensure accurate loan
Refinance                          pricing and reporting. The credit report is only to be used for credit score and validating the mortgage payment history.
                                   0 X 30 mortgage payment history in the most recent 12 months. If loan being refinanced has been open < 12 months, a previous
                                   mortgage/rental history totaling 12 months must be obtained and meet the 0X30 payment history guideline.
Streamline Refinance       Credit Qualifying          The maximum mortgage amount is the lower of:
with Appraisal                                             Outstanding principal balance minus the applicable refund of the UFMIP, plus closing costs, prepaid items
                                                           to establish an escrow account and the new UFMIP that will be charged on the new refinance OR 97.75% of
                                                           the appraised value of the property plus the new UFMIP that will be charged on the new refinance
                                                           The outstanding principal balance may include interest charged by the servicing lender when the payoff is
                                                           not received on the first day of the month, but may not include delinquent interest, late charges or escrow
                                                           shortages
                                                           Discount Points cannot be included in the new mortgage
                                                                 o If the borrower has agreed to pay Discount Points, the Underwriter must verify and document the
                                                                   assets needed to close
Streamline Refinance       The maximum mortgage amount cannot exceed:
without Appraisal                  Outstanding principal balance minus the applicable UFMIP refund PLUS the new UFMIP that will be charged on the new
(Credit Qualifying and             refinance
Non-Credit Qualifying)             The outstanding principal balance may include interest charged by the servicing lender when the payoff is not received on the first
                                   day of the month, but may not include delinquent interest, late charges or escrow shortages
                                   CLTV is based on the original appraised value of the property
Credit Qualifying          A Credit Qualifying Streamline Refinance must be considered when the monthly mortgage payment will increase > 20%
Streamline Refinance       Required Documentation:
With or Without an                 The Underwriter must certify that the borrower is employed and has income at the time of application
Appraisal                          o Refer to the FHA Lending Manual for complete guidance on employment verification for ALL types of income received
                                   Credit report must be verified
                                   Funds to close must be verified
HUD Home Incentive         HUD has released $100 down payment incentive program for borrowers purchasing HUD homes certain states (see the link below to
                           determine if your state is eligible.)

                           The maximum amount of escrow hold-back allowed for this program is $5000. Homes needing more than $5000 in improvements would
                           be considered Rehabilitation loans .

                           Additional information on this program can be found at: $100 down HUD Homes




11                                                                                                                                       09/22/2011
FHA                                                                                                                                            Wholesale
                                                                    Transactions
                     Unifi Impacts: Unifi will require overrides in order to take advantage of this program.

Upfront Mortgage                                                                All Transactions
Insurance                                                                             1.00%
Annual Mortgage      In addition to the UFMIP, certain mortgages require the payment of an annual premium. The percentage amount of the annual premium is
Insurance Premium    based upon the LTV and the term of the mortgage as shown in the following chart:
                                                                                All Transactions
                                     LTV                       Term > 15 years                         LTV                       Term ≤ 15 years

                                      95%                            110bps                               ≤ 90%                               25bps

                                     > 95%                            115bps                              > 90%                               50bps


                                                                            Pricing
                                                                        Fannie Mae (DU)
Escrows                  Required on all LTV’s
Extended Lock            Available up to 120 days
                         Purchase transactions ONLY
Temporary Buydowns   2-1 Temporary Interest Rate Buydowns are only allowable on:
                         Fixed Rate Purchase Transactions
                         The loan must be underwritten at the Note Rate

                     Buydown funds may be paid from:
                         The seller
                         The borrower
                         Any other interested party
                         Funds from the seller or any other interested third party are considered seller contributions, and must be included in the 6% limit on
                         seller contributions
ARM Guidelines                                                                            ARM Loan Overview
                     Index                  LIBOR adjusted to a constant maturity of one year

                     Interest Rate           3/1 ARM   Fixed for the first 36 months, then adjust every 12 months.
                     Change Date
                                             5/1 ARM   Fixed for the first 60 months, then adjust every 12 months.
                     Margin                  2.250%

                     Interest Rate Caps      3/1 ARM                 Initial Period: 1%                  Subsequent Periods: 1%        Lifetime: 5%




12                                                                                                                                   09/22/2011
FHA                                                                                         Wholesale
                                             Pricing
                        5/1 ARM      Initial Period: 2%   Subsequent Periods: 2%    Lifetime: 6%
      Conversion Option Ineligible

      Qualifying Rate    Note Rate




13                                                                                 09/22/2011

				
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