Lender s Handbook VA Pamphlet 26-7, Revised

Transcription

1 Lender s Handbook

2

3 Chapter 1-The Lender Overview Definitions and Authorities Before a Lender Starts Making VA Loans Before a Lender Starts Making VA Loans in a New State Lenders That are Considered Supervised How a Nonsupervised Lender Applies for Automatic Authority Certifications a Nonsupervised Automatic Lender Must Comply With How a Nonsupervised Automatic Lender Requests Extension of Authority, Underwriter Approval or Approval to Close Loans Involving an Affiliate How a Supervised or Nonsupervised Automatic Lender Requests VA Recognition of an Agent Mergers and Acquisitions Involving Supervised or Nonsupervised Automatic Lenders Withdrawal of Automatic Authority from Supervised or Nonsupervised Automatic Lenders Participation Fees for Supervised and Nonsupervised Automatic Lenders Maintenance of Loan Records Lender ID Numbers Lender Access to Training and Information Figure 1-A Calculation of Adjusted Net Worth Figure 1-B Elements of a Quality Control Plan Figure 1-C Checklist Application for Authority to Close Loans on an Automatic Basis Chapter 2-Veterans Eligibility and Entitlement Overview How to Establish the Applicant s Eligibility for a VA Loan What the Certificate of Eligibility Tells the Lender How to Apply for a Certificate of Eligibility Proof of Service Requirements Basic Eligibility Requirements Restoration of Previously Used Entitlement Misuse of Veteran s Entitlement Certificate of Veteran Status FHA Loans Exhibit 2-A Quick Reference Table for VA Eligibility i

4 , Continued Chapter 3-The VA Loan and Guaranty Overview Basic Elements of a VA-Guaranteed Loan Eligible Loan Purposes Maximum Loan Maximum Guaranty on VA Loans Occupancy Interest Rates Discount Points Maturity Amortization Eligible Geographic Locations for the Secured Property What Does VA Guaranty Mean to the Lender? Post-Guaranty Issues Chapter 4-Credit Underwriting Overview How to Underwrite a VA Guaranteed Loan Income Income Taxes and Other Deductions from Income Assets Debts and Obligations Required Search for and Treatment of Debts Owed to the Federal Government Credit History Documentation for Automated Underwriting Cases How to Complete VA Form , Loan Analysis How to Analyze the Information on VA Form Examples of Underwriting Deficiencies ii

5 , Continued Chapter 5-How to Process VA Loans Overview Refinancing Loans Procedures the Lender Must Complete Before VA Issues Guaranty How to Submit Loan Documents to VA Prior Approval Loan Procedures Automatically Closed Loan Procedures Submit Other Necessary Documents What Does VA Do When Loans are Reported? Exhibit 5-A VA Form , VA Transmittal List Exhibit 5-B VA Form , VA Loan Summary Sheet Chapter 6-Refinancing Loans Overview Interest Rate Reduction Refinancing Loans (IRRRLs) IRRRL Made to Refinance Delinquent Loan Cash-Out Refinancing Loans Quick Reference Table for IRRRLs Versus Cash-Out Refinancing Loans Other Refinancing Loans Chapter 7-Loans Requiring Special Underwriting, Guaranty and Other Considerations Overview Joint Loans Construction/Permanent Home Loans Energy Efficient Mortgages (EEMs) Loans for Alteration and Repair Supplemental Loans Graduated Payment Mortgages (GPMs) Growing Equity Mortgages (GEMs) Loans Involving Temporary Interest Rate Buydowns Farm Residence Loans Cooperative Home Loans Loans for Manufactured Homes Classified as Real Estate Loans to Native American Veterans on Trust Lands iii

6 , Continued Chapter 8-Borrower Fees and Charges and the VA Funding Fee Overview VA Policy on Fees and Charges Paid by the Veteran-Borrower Fees and Charges the Veteran-Borrower Can Pay Fees and Charges the Veteran-Borrower Cannot Pay Other Parties Fees and Charges for the Veteran-Borrower Seller Concessions What Happens to Fees and Charges If the Loan Never Closes Fees and Charges That Can be Included In the Loan Amount The VA Funding Fee Chapter 9-Legal Instruments, Liens, Escrows and Related Issues Overview Security Instruments Title Limitations Land Sale Contracts and Option Contracts Secondary Borrowing Purchase of Property with Encumbrances Liens Covering Community-Type Services and Facilities Powers of Attorney Lender Review of Sales Contracts on Proposed Construction Escrow for Postponed Completion of Improvements Hazard Insurance Escrow for Taxes and Insurance Chapter 10-Property Eligibility and Appraisal Requests Overview Why An Appraisal Is Required Who Can Request an Appraisal The VA Assignment System How to Request an Appraisal Types of Property Eligible for Appraisal Properties Not Eligible for Appraisal Other Appraisal Request Restrictions New Construction Ten-Year Insured Protection Plans Construction Exhibits Conversion of HUD Value Notices for VA Use Fees For Appraisals and Inspections Figure 1: Builder Information and Certifications iv

7 , Continued Chapter 11-Appraiser Requirements Overview Using This Information VA Reasonable Value VA Appraisal Requirements Appraisal Report Contents Submission of Appraisal Reports Approaches to Value Selection and Analysis of Comparable Sales Other Market Analysis Considerations Minimum Property Requirements and Repairs Remaining Economic Life of Improvements Proposed Construction Other Property Types and Situations Liquidation Appraisals Figure 1: Liquidation Appraisal Addendum Example Chapter 12-Minimum Property Requirements Overview MPR Variations and Exemptions Proposed Construction MPRs Basic MPRs Shared Facilities and Utilities Access-Related Issues Hazards and Defective Conditions Fuel Pipelines and High Voltage Electric Lines Individual Water Supply/Sewage Disposal Requirements Community Water Supply/Sewage Disposal Requirements Manufactured Homes Classified as Real Estate v

8 , Continued Chapter 13-Value Notices Overview Reviewing Appraisal Reports Resolving LAPP Appraisal Review Problems Documenting LAPP Appraisal Reviews LAPP Related Changes to Appraiser s Value Estimate Preparing Notices of Value Notice of Value Conditions and Requirements Distributing Notices of Value How Long Notice of Value is Valid Changing Notices of Value Transfer of Appraiser s Reports Between Lenders Discovery of Title Limitations & Conditions Effect of Major Disasters on Notices of Value Exhibit 1 LAPP Lender s Notice of Value Chapter 14-Construction Inspections Overview Obtaining an Inspection Inspection Stages VA Reliance on Local Building Inspections for First and Second Stages Manufactured Homes Classified as Real Estate Delayed Installation of Appliances and Finished Floor Covering Lender Use of Inspection Reports Changes to Construction Exhibits Chapter 15-Lender Appraisal Processing Program Overview LAPP Eligibility Lender Quality Control System Requirements Applying for LAPP Authority SAR Training and Initial Case Reviews Changes in SAR s Employment or Lender s Status Lender Responsibilities Under LAPP LAPP Processing Procedures Affiliates and Authorized Agents Exhibit 1: LAPP Application vi

9 , Continued Chapter 16-Common Interest Communities, Condominiums and Planned Unit Developments Overview Section A: Requirements for Properties in Common Interest Communities Overview A-1 16-A.01 Requirements Applicable to All Properties in Common Interest Communities A-2 16-A.02 Condominium Approval Procedures A-5 16-A.03 Table of Required Documents A-9 Section B: Use of Attorney s Opinion Overview B-1 16-B.01 Contents of Opinion B-2 16-B.02 What Opinion Must Address B-4 16-B.03 Assumptions That Opinion May Include B-7 16-B.04 Qualifications or Limitations that Opinion May Include B B.05 Exhibit A: Other VA Requirements B B.06 Exhibit B: Condominium Regulations B-28 Chapter 17-VA Sanctions Against Program Participants Overview Program Participants False Lender Certification Withdrawal of Automatic Authority Withdrawal of LAPP Authority Debarment and Suspension Limited Denial of Participation (LDP) Unfair Contract Provisions or Marketing Practices Violations of Equal Housing Opportunity Laws Appendix A: Listing of VA Offices... A-1 Appendix B: VA Forms and Their Uses... B-1 Appendix C: Electronic Payment of the VA Funding Fee... C-1 vii

10 , Continued Current Issues Overview... CI-1 CI.01 Electronic Publication of Lender s Handbook... CI-2 CI.02 Misleading Advertisements... CI-3 CI.03 Automated Underwriting... CI-5 CI.04 Home Mortgage Disclosure Act (HMDA)... CI-6 CI.05 VA Restructuring of the Loan Processing Function... CI-10 CI.06 Modified Guaranty Submission Procedure... CI-11 viii