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FREQUENTLY ASKED QUESTIONS

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					     19 – FREQUENTLY ASKED QUESTIONS

TERMS & CONDITIONS

Q. At Loan Closing, can the Lender charge additional points?
A. No. The Lender can only charge up to the maximum origination and points as indicated on
   the Program Announcement with each bond issue.


Q. What about loan level pricing adjustments on House Key State Bond loans?
A. On all Conventional mortgages, the Adverse Market Fees and Reduced Loan Level Pricing
   Adjustments apply. Please see Appendix III of the House Key manual for further
   information. On the 80/20 program, an additional 1½% pricing adjustment must be included
   on the HUD settlement statement under points. If the Lender receives pricing adjustments on
   any other product, the loans are not acceptable for purchase under the House Key State Bond
   program.


Q. As a Loan Originator, how much money will I make on a House Key State Bond Loan?
A. Regardless of interest rate selection, the Lender will make 1½ points per loan plus other
   allowable fees if such fees are usual and customary. As the loans are sold service release to
   the Master Servicer, no additional SRP is paid. Additionally, each Lending Institution will
   have different compensation splits for their Loan Originators.


Q. What if our Lending Institution accidentally charges a non-allowable fee on a House Key
   loan at loan closing?
A. If a non-allowable fee is charged, the fee must be refunded to the appropriate party prior to
   purchase of the loan.


Q. Can our Lending Institution close a House Key loan with “Reduced MI or “Lower-Cost
   MI”?
A. No. “Lower-Cost MI” requires a loan level price adjustment, which is not allowed on
   mortgage revenue bond programs. “Reduced MI” is acceptable as no loan level price
   adjustment exists.


Q. Can our Lending Institution close a House Key loan with an Upfront Lender Premium
   such as MGIC’s Single File program?
A. Yes. The pricing adjustment must be added to the fees in terms of points (not the rate) and
   disclosed on the HUD 1 settlement statement at closing. The Lender will then pay the
   mortgage insurance company.



(Rev. 02/13/09)                                   FREQUENTLY ASKED QUESTIONS 19.1
Q. Are there any additional disclosures to the House Key loan with an Upfront Lender
   Premium such as MGIC’s Single File program?
A. The Mortgage Insurance Company will require a disclosure for the Borrower’s signature.
   Since the language usually refers to a rate adjustment instead of a fee adjustment, the Lender
   can add language to the disclosure to say that the loan level pricing adjustment will be added
   as a fee in the form of points on the HUD 1 Settlement Statement. The Commission,
   however, does not have any additional forms that need to be signed by the Borrower for
   compliance purposes.


Q. Is it acceptable to close a House Key first mortgage and with a community second program
   from a local nonprofit?
A. Yes, if the downpayment assistance program is on the approved list from the Master Servicer.
   If the program is not on the approved list, please send program description, Note, Deed of
   Trust, source of funds, and Fannie Mae Variance approvals if applicable to Kristi Descher at
   Kristi.descher@bankofamerica.com


ELIGIBLE BORROWERS

Q. Can you count an unborn child in Household size?
A. Yes. If the Borrower can provide proof of pregnancy from a medical professional, you can
   count an unborn child in Household size.


Q. Which incomes are included for compliance purposes?
A. Compliance income is calculated by using ALL sources of income from all household
   members over the age of 18 living in the property, whether or not they are used to qualify the
   Borrowers under standard underwriting guidelines.


Q. Qualifying income is often based on a 24-month income average. Is that how compliance
   income is calculated?
A. No. Compliance income is based on the current income, projected forward for the next 12
   months. All income sources are included in compliance income even if not used as
   qualifying income. When looking at compliance income, first look at everything on the pay
   stub look. Check the current period and annualize, year to date earnings, hourly rate, etc.
   For compliance, the Commission will take the highest calculation plus future raise unless
   further documented in the file.




(Rev. 04/24/09)                                    FREQUENTLY ASKED QUESTIONS 19.2
Q. Do you “gross up” Social Security, child support, and other sources of non-taxable income
for compliance purposes?
A. No.


PROPERTY

Q. Can you finance a manufactured home using the House Key program?
A. You can finance a manufactured home if the first mortgage is an FHA, VA, or RHS 502
   Guaranty Loan. You cannot finance a manufactured home using any Fannie Mae or Freddie
   Mac conventional financing options including HomeChoice and House Key Extra.


RECAPTURE TAX

Q. My Borrower is refinancing their home. Do they owe recapture tax to the IRS in the year
   that they refinance?
A. No. Recapture tax is triggered when the home is sold or otherwise disposed of during the
   first nine years.


Q. My Borrower refinanced their home two times since originally purchasing the home five
   years ago using House Key State Bond. I have informed my Borrowers that the recapture
   provision no longer applies. Is this correct?
A. No. The recapture provision is in full effect for the first nine years of ownership.
   Refinancing the home does not eliminate the recapture provision. Recapture tax is triggered
   when the home is sold.


HOMEBUYER EDUCATION

Q. My Borrower attended a homebuyer education seminar and received a certificate of
   completion from the lending institution. Is this okay to reserve funds for the House Key
   State Bond program?
A. No. The Borrower must attend a homebuyer education seminar sponsored by the
   Washington State Housing Finance Commission prior to reservation of funds. All eligible
   seminars are listed on our Website and www.wsfc.org. Participants receive a certificate with
   an official seminar control number.




(Rev. 02/16/05)                                  FREQUENTLY ASKED QUESTIONS 19.3
RESERVATION PROCESS

Q. I have a Borrower whose property fell through because of the inspection. He found
   another property. Does the original loan need to be cancelled? Rates have gone up and I
   am afraid this Borrower will lose out if we have to cancel.
A. Yes. The original reservation needs to be cancelled. The Lender will need to re-reserve
   funds and will receive the current rate which could be the same, higher, or even lower.


Q. Can I reserve funds via fax rather than using the MITAS system?
A. Please reserve funds on the MITAS Website at http://wshfc.mitas.com. Commission staff is
   happy to walk you through the reservation process. The on-line registration system is more
   efficient than faxing and it also allows you full control of the reservation. The fax-in form is
   for emergency use only in the rare event your Internet system is not functioning. If the
   Internet in general is not working, we cannot make the reservation either.


Q. How do I cancel a loan?
A. You can cancel funds for the first and second mortgage on-line at any time up until receipt of
   the pre-closing file in our office. Once the loan status has been changed, all cancellations
   must be completed by our office.


Q. Can I add a second mortgage later if the Borrower’s parents can’t gift them the full
   amount for closing?
A. Yes. You can add a second mortgage at any time on-line on the MITAS system.


PRE-CLOSING COMPLIANCE

Q. How will the Lender know when my file has been approved by the Commission?
A. Lenders can view the status of their pipeline including conditions for closing and purchase
   any time on the MITAS system. Staff usually will also send you an e-mail to let the Lender
   know the file has been reviewed.


Q. How long will it take the Commission to review pre-closing files?
A. Staff makes every attempt to review COMPLETE files in a timely manner within two
   business days of receipt or sooner. Please let the Commission know if you have a rush. Files
   and conditions can be faxed to 206-287-4456.




(Rev. 02/16/05)                                     FREQUENTLY ASKED QUESTIONS 19.4
LOAN CLOSING

Q. What needs to happen before the Lender can close a House Key State Bond Loan? Is
   there anything special that the Lender needs to do?
A. Before closing a House Key State Bond loan, the loan needs to be approved for the first
   mortgage type by the underwriter and also needs to be approved to close for Compliance by
   the Commission. Once both approvals are in place, the loan closes like any other loan in the
   Lending Institution’s pipeline. Please be sure to have the Borrowers sign the appropriate
   forms in Section 15 of the Program Manual at loan closing.


Q. The Borrower wants to receive their earnest money deposit back at closing in the amount
   of $1,000.00. Is that possible?
A. If the Borrower is receiving a House Key first mortgage, the Borrower can receive the full
   amount of their earnest money deposit back if they have met their minimum deposit for the
   first mortgage type. If the Borrower is also receiving down payment assistance from
   WSHFC, they can receive their earnest money deposit back if the total refund plus their
   current liquid assets in the bank will result in less than 3 months PITI or amount specified
   per dpa program in reserves.


LOAN PURCHASE & DELIVERY

Q. What is Master Servicer’s turnaround time for reviewing and funding purchase files?
A. The Master Servicer will review files within five days of receipt. Complete loans will be
   approved for purchase within 24 hours of receipt. Lenders may retrieve wire details from the
   Bank of America, N.A. Correspondent Lending Web site within 24-48 hours.


Q. How should Lenders identify files when sending them to Bank of America?
A. First, use the orange Bond Loan Purchase Voucher that is located in the Forms Download
   Section of the manual. Next, be sure to write “WSHFC Bond Loan”, the Borrower’s name
   and the Commission’s loan number on the front of the file.


Q. How can Lenders access a suspension report?
A. Lenders can access outstanding conditions on the MITAS Website or on Bank of America’s
   Correspondent Lending Website. From the Platinum home page (not the MRB home page),
   click “Reports” on the menu bar. Then select the “Funding Suspension” option. Fill out the
   necessary information and click “Submit.” Note that other reports are also available here for
   your use.




(Rev. 04/24/09)                                   FREQUENTLY ASKED QUESTIONS 19.5

				
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