Friday, February 05, 2010
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Week of Feb 1, 2010
Loan Program Updates
Loan Program-Specific Changes
- 6203 FHA High Balance Streamline is now eligible in HI, CA, and Miami-Dade, FL. The FHA Case Number must be dated on or after 11/17/09
- 6214 LP Relief Refi is limited to 105% LTV.
Wayne County, Michigan
- DMC will no longer fund loans in Wayne County, Michigan.
Appraisals - USDA & FHA
- As of February 15th we will require all FHA appraisals and appraisals for Rural Housing to be ordered through DMC. Loan must be locked and appraisal performed prior to this date to use broker-ordered appraisals.
New Programs
- 6215 LP Relief Refi - max 125% LTV.
- 6216 DU Refi Plus - max 125%.
- 6219 FHA Good Neighbor Next Door.
- 6220 DU Super Refi Plus - max 125%; HUD County Limit.
Price Adjustments
The Maximum YSP (which is now paid to the borrower) has been increased to 4.00 pts.
FHA Good Neighbor Next Door Program: FHA pricing + 0.25 adjustment.
Turn Times
Funding: Two (2) business days when closing docs are received prior to 10:00 am.
Loans received after 10:00 am will be counted as received the following day.
Underwriting: The oldest loan in the underwriting queue was submitted on 2/1/2010.
Holiday Schedule
Feb 15, 2010 (Presidents Day) - DMC will be open, but not funding loans. This is not a recission day.
Streamline Refinances
During February the underwriting fee for FHA Streamline Refinances is $410.
Week of Jan 25, 2010
Loan Program Updates
Non-Arms Length and Identity-of-Interest
- Non-Arms Length and Identity-of-Interest transactions are NOT allowed when the occupancy type is 2nd Home or Investment.
- Non-Arms Length and Identity-of-Interest transactions are NOT allowed when the seller has entered into a short sell agreement with the existing lien holder or when a bank is the seller and the buyer is related to the previous owner.
- Non-Arms Length and Identity-of-Interest transactions ARE allowed – on a case by case basis for primary homes. DMC does not allow “bailouts.”
Cash Out – 2nd and Investment Properties
- Cash-out investment properties and second homes allowed to 70% LTV with 720 credit score, 45% total expense ratio, and 1 year title seasoning.
Turn Times
Funding: Two (2) business days when closing docs are received prior to 10:00 am.
Loans received after 10:00 am will be counted as received the following day.
Underwriting: The oldest loan in the underwriting queue was submitted on 1/22/2009.
Streamline Refinances
During January the underwriting fee for FHA Streamline Refinances is $410.
Thursday, January 21, 2010
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Week of Jan 18, 2010
Loan Program Updates
Condominium Approvals
Effective February 1, 2010, Fannie Mae will no longer accept FHA condominium approvals for conventional mortgage loans.
Effective December 7, 2009, the VA will no longer accept FHA condominium project approvals in lieu of VA project review. Condominiums previously accepted by the VA, based upon FHA acceptance, will continue to be acceptable to the VA.
In summary, DMC’s condominium policy is as follows:
- FHA Loans: Condominium projects must be approved via the HUD Review and Approval Process (HRAP). DMC will not utilize the Delegated Lender Review and Approval Process (DELRAP).
- VA Loans: Condominium projects must be approved in the VA’s Condo/PUD – Builder (CPB).
- Fannie Mae Loans: DMC will require an existing, unexpired FNMA Form 1028 or approval from Fannie Mae’s Project Eligibility Review Service (PERS).
- Freddie Mac Loans: Condominium projects must be approved using the method required by DMC for FHA or FNMA loans.
- Rural Housing Loans: Condominium projects must be approved using one of the methods required by DMC for FHA, VA, FNMA or FHLMC loans.
Self-employed Borrowers
Starting April 16, 2010, self-employed borrowers will need to provide 2009 tax returns. DMC must be able to validate the tax returns with tax transcripts from the IRS.
Until April 15, 2010, financial statements (profit/loss & balance sheet) along with Oct – Dec 2009 business bank statements will be required from self-employed borrowers.
Debt Calculation
Revolving and installment debt paid off prior to the date of the loan application and credit report does not need to be included in the debt-to-income ratios. However, funds used to pay these items may need to be sourced and seasoned. Here is our policy regarding debts paid after the date of the loan application:
- Purchase & Rate/Term Loans:
- Revolving debts may not be paid off or paid down in order to qualify.
- Installment loans may not be paid down in order to qualify. Installment loans may be paid off in order to qualify. A borrower may not use gifts funds to pay off an installment loan in order to qualify.
- Cash-out Loans:
- Revolving debts may be paid off in order to qualify, as long as they are paid through closing using loan proceeds.
- Installment loans may not be paid down in order to qualify. Installment loans may be paid off in order to qualify. They may be paid off with borrower funds or loan proceeds. A borrower may not use gift funds to pay off an installment loan in order to qualify.
Closing Docs Updates
DMC now requires approved HUD-1’s prior to sending the closing package to the Settlement Agent/Escrow Officer. The doc drawer will send Closing Instructions to the Settlement Agent/ Escrow Officer and require a HUD-1 returned, which must be approved by the Loan Officer and Direct Mortgage, Corp. After the HUD-1 has been approved by the Loan Officer and Direct Mortgage, Corp., the Closing Package will be sent to all parties in Loan Contacts. At this point there are to be no changes to the HUD – 1.
4506-T
DMC now requires a wet signature on the 4506-T form.
Price Adjustments
All conforming products
- 2 - 4 units adjustment will be reduced from 1.25 pt. to 1.00 pt.
DU Refi Plus and LP Relief Refi programs
- All Fico Score adjusters that are greater than 2.00 pts. will be capped at 2.00 pts.
- 2 unit property adjustment will be reduced from 1.25 pt. to 1.00 pt.
- 3 -4 units w/ LTV >80 – 85% new adjustment of 1.500 pts.
- 3 -4 units w/ LTV >85% new adjustment of 2.00 pts.
Turn Times
Funding: Two (2) business days when closing docs are received prior to 10:00 am.
Loans received after 10:00 am will be counted as received the following day.
Underwriting: The oldest loan in the underwriting queue was submitted on 1/19/2009.
Streamline Refinances
During January the underwriting fee for FHA Streamline Refinances is $410.
Monday, January 04, 2010
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Week of Jan 4, 2010
Loan Program Updates
Purchase Price Negotiations
DMC will no longer allow the purchase price to be renegotiated upwards if an appraisal has already been performed. This applies to all loans locked on or after 1/21/10.
Ratios
In the presence of a non-occupant co-borrower, the max housing and debt ratio for the occupant borrower is being reduced from 55% to 50%. This applies to all loans locked on or after 1/11/10.
Turn Times
Funding: Two (2) business days when closing docs are received prior to 10:00 am.
Loans received after 10:00 am will be counted as received the following day.
Underwriting: The oldest loan in the underwriting queue was submitted on 1/04/2010.
Holiday Schedule
Jan 18, 2010 - Closed; Not a recission day
Streamline Refinances
During January the underwriting fee for FHA Streamline Refinances is $410.
Week of Dec 28, 2009
Loan Program Updates
Non-Conforming Program (6211)
Cash-Out refinances are not allowed on Interest Only Libor ARMs.
Price adjustments
None this week
FHA Streamline - Max Mortgage Amount
FHA Refinances
When calculating the maximum mortgage amount, remember to follow the guidelines set forth in Mortgagee Letter 2009-32.
Turn Times
Funding: Two (2) business days when closing docs are received prior to 10:00 am.
Loans received after 10:00 am will be counted as received the following day.
Holiday Schedule
Dec 31, 2009 - Open Regular Hours 8:30 - 5:00 MST
Jan 1, 2010 - Closed; Not a recission day
Streamline Refinances
During December the underwriting fee for FHA Streamline Refinances is $410.