Various Guideline Changes; HPML Documentation

Transcription

1 At Your Interest Is Our Priority! Various Guideline Changes; HPML Documentation Purpose This communication announces: FHA Appraisal guideline changes. Fannie Mae DU Version 8.0 Freddie Mac guideline changes and LP Update. documentation requirements for HPML. Effective Date As Noted. FHA Appraiser and Appraisal Changes Effective for all new case assignments on/after January 01, 2010: Appraiser Independence FHA Loans Lender Compliance: Effective with FHA Appraisal orders on or after 1/1/10, HUD Appraisals must be obtained via an independent process (pursuant to the guidelines provided by FHA in ML 09-28). To ensure compliance, Sellers can: Use the services of the AMC ordering mechanism. Use an AMC of their choosing, so long as the AMC is able to certify compliance. (AMC Certification included with the appraisal.) Administer their own independent process Sellers must provide a copy of their current Appraisal Policy that outlines the process for ensuring compliance with HVCC and the HUD ML o Copies should be ed to at the following address: khilton@msiloans.biz. A hardcopy may be forwarded to the Bloomington Office, Attn: Karen Hilton. Additionally, if Sellers use their own independent process, will require a fully executed copy of the HVCC Appraisal Certification Form in each loan file. Appraiser Independence Appraiser Certification of Compliance: Additionally, will require, in the body of the FHA appraisal, the FHA appraiser to make the following certification: This FHA appraisal was ordered in compliance with HUD Mortgagee Letter will audit for that statement on all FHA loans prior to underwriting and/or funding (as applicable). FHA appraisals without the appraiser certification are not eligible for funding/purchase by. Note: See the Documentation Requirements Matrix for clarification purposes. WPA Corrected Page 1 of 5 ().

2 At Your Interest Is Our Priority! FHA Appraiser and Appraisal Changes, Continued Documentation Requirements Matrix AMC Other AMC Independent Process Seller Uses Each FHA Appraisal must contain Appraiser Certification Each FHA Appraisal must contain Appraiser Certification and Each Appraisal must contain AMC Certification that the appraisal was ordered in compliance with HVCC (may specifically state in compliance with HUD ML 09-28) One Time Forward copy of Appraisal Policy to ; must outline process to ensure compliance with HVCC and/or specifically mention HUD ML Additionally, for each FHA loan: Each FHA Appraisal must contain Appraiser Certification and Each Appraisal must contain AMC Certification that the appraisal was ordered in compliance with HVCC (may specifically state in compliance with HUD ML 09-28) Age of Appraisal: The validity period for all appraisals on existing and proposed and under construction properties will be 120 days (from Note Date). Please see FHA ML and for full details. Mortgagee Letters may be pulled from the Web at this site: DU Version 8.0 Effective 12/12/09 As announced last week, will require that all new loan submission to DU on/after 12/12/09 must be made through DU Version 8.0. is updating guidelines based on Fannie Guideline changes for DU Version 8.0. See the Guideline Change Matrix for additional details. See DU Release Notes updated 11/13/09 on the Fannie Mae Web Site for additional information. Freddie LP Update Effective 12/14/09 Freddie Mac will update LP to include guideline changes addressed in Freddie Mac Bulletin is updating guidelines based on this update. See the Guideline Change Matrix for additional details. See Freddie Mac Bulletins on the Freddie Mac Web Site for additional information. WPA Corrected Page 2 of 5 ().

3 At Your Interest Is Our Priority! More Restrictive Of Reminder: While makes every effort to provide our Sellers with as much underwriting and guideline information as possible, we still rely on the applicable Fannie Mae or Freddie Mac Seller Guides for additional assistance to ensure that we are making the best risk decisions is always governed by the more restrictive of /Fannie/Freddie/ FHA/VA/USDA and private mortgage insurance companies. Guideline Change Matrix For the convenience of our Sellers, is providing the following Guideline Change Matrix. This matrix provides a very brief summary of the guideline changes. For complete details, see the updated Conforming Product Suite and Underwriting Chapter that will be posted to our Web Site no later than close of business 12/15/09. Topic Summary of New Guideline Conforming Product Suite Product Limitations When the borrower is purchasing a Second Home or Investment Property: If the borrower(s) owns more than one financed 1-4 unit investment property, the product is limited to 15-year, 20-year, 30-year FRM or 7/1 or 10/1 ARM only. Reserve Requirements Reserves must meet the more restrictive of /applicable agency: Second Home requires minimum 2-months PITI reserves. Investment Property requires minimum 6-months PITI Reserves for each investment property owned. The conventional High Balance product is being extended to December 31, Conventional High Balance Field Review: The loan limit for requiring a field review has been revised to greater than $625,500 Underwriting Chapter DU Version requires the use of DU Version 8.0 effective for new loan submissions on/after 12/12/09. Reserves Using When using Retirement accounts as reserves, calculate the value at 60% of the vested amount. Retirement Funds Construction to Permanent Clarified to meet Fannie guidelines: Structuring the transaction as a purchase: Base LTV/CLTV as follows regardless of seasoning. (OR if the lot was acquired by inheritance or gift (regardless of the date of acquisition) The lesser of: The current appraised value of the lot plus documented construction costs, or Appraised value of the subject property at the time the permanent mortgage is closed/modified. Changed the wording from owned to acquired WPA Corrected Page 3 of 5 ().

4 At Your Interest Is Our Priority! Guideline Change Matrix, Continued Topic Underwriting Chapter, Continued Deed-In-Lieu Multiple Bankruptcies Foreclosure and Pre-Foreclosure Rental Income Resale Deed Restrictions REO/Repo Properties Summary of New Guideline Revised the Bankruptcy and Foreclosure language to mirror Fannie Mae; added specific guidelines for Deed-in-Lieu. Extenuating Circumstances must be prior approved by Underwriting to be eligible for funding/purchase. has expanded these guidelines to more closely match current Fannie Mae guidelines. has added language referring users back to the applicable Fannie/Freddie Seller Guides for additional guidance/clarification. Both Fannie and Freddie have expanded their Seller Guide sections to provide expanded clarification language on this topic that is easy to read and very helpful. Properties with Resale Deed Restrictions (AKA inclusionary zoning) are not eligible for sale to. has clarified that the requirements in the Underwriting Chapter are applicable to conventional and government loans. We have also expanded and clarified the language. HPML Documentation Requirements Effective Immediately for each loan submitted to for funding. requires proof of the lender lock-in date with borrower to ensure compliance with HPML. requires the following documentation in each loan file at time of delivery for funding/purchase: Proof of the borrower s lock-in date with the Seller [copy of the Rate Lock Agreement forwarded to the borrower(s)] Note: If the original lock expires, needs a copy of the most current Rate Lock Agreement. will re-test the loan prior to funding to ensure it is in compliance with HPML. If it is not, will not fund the loan. Sellers are welcome to test the loans prior to funding. Tests are performed on the following: Calculator at the Web Site: (Sellers may inlcude a copy of the print screen from that calculation exercise in the loans submitted for funding.) WPA Corrected Page 4 of 5 ().

5 At Your Interest Is Our Priority! Seller Guide As Applicable: The Seller Guide and any Product Quick Reference Sheets will be updated within 2 business days of the effective date of the change. Questions If you have questions, contact your Account Executive. WPA Corrected Page 5 of 5 ().