FHA Credit Score Changes Coming
In February we were still funding loans down to a 580 credit score, now its 620 with most lenders. Some lenders are taking score requirements up to 640 and 660. The lending process is moving back to its technical book procedures. The changes are good because those that are buying now shouldn't experience defaults, and bad because many buyers aren't prepared for the rapid changes.
Regarding verifying down payment - Important: Any underwriting unit can ask for bank statements and official verification of deposits in tandem for the last 60 days up and through closing. NOTE: Any large deposits going into the account will need to be fully sourced, even if its a large deposit going into a giftors account. Cash deposits are not allowed. WHY?...
Recently there has been a slew of sellers kicking back the down payment to buyers in order to off-load properties. This has caused a tightening of down payment verification. Please take a moment to read the link at
Mortgage Disclosure Improvement Act
Mortgage Disclosure Improvement Act – 2 Months Early
by Richard Triplett, CMB
Effective on July 30, 2009, some of the provisions in the final rule for revisions to the Truth-in-Lending Act (TILA) become effective – 2 months earlier than the original date of October 1, 2009. The specific provisions effective by this “new” rule implement the Mortgage Disclosure Improvement Act (MDIA).
How did this happen? The final rule issued by the Federal Reserve Board on July 30, 2008 regarding the Truth-in-Lending Act and Home Ownership Equity Protection Act has an effective date of October 1, 2009. On July 30, 2008, Congress enacted the Housing and Economic Recovery Act which included provisions regarding MDIA. On October 3, 2008, Congress enacted the Emergency Economic Stabilization Act which amended MDIA. On May 8, 2009 the Federal Reserve Board approved final rules to implement the provisions of MDIA, as amended by the Emergency Economic Stabilization Act and applied an effective date of July 30, 2009. MDIA amends TILA, codifies early disclosure requirements and expands regulatory provisions. Confused yet?
The requirements that become effective for all loan applications received on or after July 30, 2009 are detailed below. These requirements are not applicable, and there have been no changes at this time to Home Equity Lines of Credit requirements. Additionally, MDIA requires additional language for adjustable-rate loans; however, this provision is still forthcoming by the Federal Reserve.
Initial Fee Restrictions – collection of fees from a mortgage applicant are limited to a reasonable credit report fee prior to the issuance of early disclosures. Although the industry was preparing for this requirement due to TILA changes effective October 1, and the RESPA final rule, it is being applied early based on MDIA. This is one of the fairly significant changes of MDIA that will require a change in policy and potentially revisions to advance fee disclosures for lenders and brokers.
creditor’s offices are open to the public for carrying on substantially all of its business functions. The business day definition differs on the requirements for the waiting periods prior to consummation.
No Requirement to Complete Statement – early disclosures and subsequent disclosures must contain a clear notice stating “You are not required to complete this agreement merely because you have received these disclosures or signed a loan application”. This language is already required on high-cost loan disclosures, but now applies to any extension of credit secured by the dwelling of a consumer.
Remember the timing starts from the issuance of the TIL Statement by the creditor. This is likewise a significant change due to MDIA requirements.
Three Business Days Prior to Consummation – Although creditors are already required to re-disclose the TIL Statement to a consumer when the APR is out of tolerance under TILA, it is typically done at the time of consummation. MDIA now changes this to a three business day time period prior to consummation using the definition of business day the same as the seven day waiting period. In this case, the consumer must receive the re-disclosed TIL Statement prior to consummation. Additionally, in this case, until you have receipt of a TIL Statement within this three-day time period prior to consummation by the consumer that is not out of tolerance, you must re-disclose until this requirement is met. This is also a significant change to the issuance of the TIL Statement.
Time Shares – for time share transactions, the early disclosure requirements apply but the seven-day and three-day waiting periods do not apply. The timing on early disclosures for time shares is applicable based on the receipt of the consumer’s application or before the credit is extended. Subsequent changes to terms beyond tolerance for time shares can be disclosed no later than consummation.
The Board of the Federal Reserve has also indicated a future proposal containing model disclosures and clauses regarding closed-end credit.
Disclaimer: The information presented in this article represents the opinion of the author and not that of AllRegs. This article is not meant to be nor should it be construed as advice of legal counsel. The applicability of the information contained herein will vary based on the nature of each lending institution's business, under what law it was created, and its loan products and procedures. Readers are strongly urged to consult with their legal counsel and/or contact local counsel as appropriate in the various states and jurisdictions to determine the applicability of the materials contained herein to the specific facts and circumstances of each organization's programs and products and to identify other law applicable to its business operations. The information contained herein was not reviewed or approved by counsel in the respective jurisdictions.
Read Previous articles in our Article Archive.
Above article written by Richard Triplett, CMB ALLREGS
Negative Home Equity? Fannie Mae 105% Refinance Coming Soon
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The new Fannie Mae refinance program will be offered to homeowners struggling with negative equity and high mortgage rates. Negative equity exists when a homeowners mortgage balance exceeds the property's current value. The program was developed to assist these "upside down" homeowners take advantage of today's historically low rates. Soon, tens of thousands of homeowners that couldn't refinance due to declining home values may be able to refinance as long as their loan is "held" by Fannie Mae.
This new refinance program may also be referred to as the Fannie Mae streamline refinance. -Full income documentation -Possibly no appraisal depending on area, credit scores, type of property, date of purchase, etc. -Must be a Fannie Mae loan -Borrower or lender must check to see if the loan is with Fannie Mae -Fico pricing adjustments still impact the borrowers loan fees
-2nd mortgages must be subordinated, so ask the 2nd mortgage lender approval before starting |
Mortgage Rates Now a-la-carte
Mortgage rates have gotten sliced and diced in very narrow catagories and credit score ranges. Last year we were able to pool 700 ficos with 650.. this doesn't hold true any longer. I've included the MAIN FANNIE MAE AND FREDDIE MAC matrix below for what we as mortgage lenders have to look at before we price a loan. There is also matrices for cash-out refinances, condo's, investment properties and 2nd homes.
Don't expect any of the mortgage rates you see in the paper or online to hold true. The mortgage rates you see online are "base" rates and are only offered to a very small percentage of the population with the highest credits scores and largest down payments.
With declining property values, high loan defaults and lower credit scores so common now you will be better served working with a mortgage person you can first trust and one that has access to many lenders. Access to many lenders will help you find the right rate and approval for your particular needs.
As you can see on the below matrix 720 credit scores with lots of equity home owners are getting the best rates. This matrix applies to conventional loans only not FHA or VA loans. FHA and VA loans offer there own risk based adjustments. Guideline changes have been almost non stop since the end of 2007 due to the disrupted nature of mortgage lending.
Below adjustments are strictly for addtional points added for risk based add-ons. 1 point equals 1% of the loan amount. EX: 1 point for a $100,000 loan is $1,000, 2 points for a $100,000 loan is $2,000, and so on.
A borrower that doesn't want to pay risk based 'points' can typically increase their rate to absorb points. It usually costs a .25% increase in rate to eliminate 1 point.
Example: .25% increase in rate may eliminate a 1 point charge, .50% in rate may eliminate a 2 point charge. A 5.0% rate may have a 2 point charge or the client may pay 5.5% rate with 0 points.
The below risk based point adds are national guidelines that apply to all conventional mortgage lenders. Some lenders can add on their own additional "regional" risk premiums.
Clients can choose to incur the below addtional points or a higher rate to offset any additional points that must be charged due to additional risk.
| Fanne Freddie Conventional Conforming Adjusters | Increase rates or charge borrower below points or a combination of point/rate | |||||||||
| LTV% | <=60% | 60.01-<=70% | 70.01-75% | 75.01-80% | 80.01-85% | 85.01-90% | 90.01-95% | 95.01-97% | ||
| LTV / FICO Adjusters: All Products w/Terms > 15 Yrs | ||||||||||
| >=740 | FIXED/ARM | (0.250) | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | n/a | |
| 720 - 739 | FIXED/ARM | (0.250) | 0.000 | 0.000 | 0.250 | 0.000 | 0.000 | 0.000 | n/a | |
| 700 - 719 | FIXED/ARM | (0.250) | 0.500 | 0.500 | 0.750 | n/a | n/a | n/a | n/a | |
| 680 - 699 | FIXED/ARM | 0.000 | 0.500 | 1.000 | 1.500 | n/a | n/a | n/a | n/a | |
| 660 - 679 | FIXED/ARM | 0.000 | 1.000 | 2.000 | 2.500 | n/a | n/a | n/a | n/a | |
| 640 - 659 | FIXED/ARM | 0.500 | 1.250 | 2.500 | 3.000 | n/a | n/a | n/a | n/a | |
| 620 - 639 | FIXED/ARM | 0.500 | 1.500 | 3.000 | 3.000 | n/a | n/a | n/a | n/a | |
| <620 | FIXED/ARM | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | |
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ADDITIONAL CONVENTIONAL CONFORMING ADJUSTERS CHARGE A HIGHER RATE OR BORROWER MUST PAY ADDITIONAL BELOW POINTS |
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| LTV > 90% <= 95% | 0.250 | ||||||
| 15 -year FRM w/ 120-month term | 0.250 | ||||||
| Investment Property LTV <= 75% | 1.750 | ||||||
| Investment Property LTV >75% <= 80% | 3.000 | ||||||
| Investment Property LTV >80% <= 90% | n/a | ||||||
| 2 Unit Property | 1.000 | ||||||
| 2 Unit Second Home Cash-Out refi <= 75% | 0.500 | ||||||
| 3 & 4 Unit Property | 1.000 | ||||||
| Secondary Financing | |||||||
| 75/20/5 LTV>65%/CLTV>90<=95% & FICO>=720 | 0.250 | ||||||
| 75/20/5 LTV>65%/CLTV>90<=95% & FICO<720 | 0.500 | ||||||
| 80/10/10 | 0.250 | ||||||
| All Other LTV>75% & FICO>=720 | 0.250 | ||||||
| All Other LTV>75% & FICO<720 | 0.500 | ||||||
| Non-escrowed (except CA, IA, IL, MN, NJ, NY, OR) | 0.250 | ||||||
| Temporary buydowns >80% LTV w/no MI | 1.000 | ||||||
| Condo > 75% LTV | ALL PRODUCTS W/ TERMS > 15 YRS | 0.750 | |||||
| Low Loan Size Adjuster | |||||||
| $0 - $49,999 | 0.500 | ||||||
| $50,000 - $99,999 | 0.250 | ||||||
This is The Best Time Ever to Buy a Home in Illinois!
Homes across the state continue to be sold at all times low, which means their is no better time to buy a home than now.
According to the Illinois Association of Realtor's, the average selling price of a home in the Chicago land area has dropped 11.5 percent, a substantial decline from a year earlier. With the average selling price at $135,000, potential buyers continue to benefit.
With the number of banked-own homes remaining over 25,000, it seems that this trend will only continue.
In addition to the low trending costs of homes, an FHA loan continues to be a bright option. Through an FHA loan, potential home-buyers can land the house of their dreams with a minimum down payment, and interest rates that continue to remain low as well. Do not hesitate to take advantage of this opportunity!
VA and USDA Zero Down Performing Very Well
Illinois Home Loans
1) Great things happen
2) VA and USDA zero down performing very well
3) Who would do better to own foreclosures?
4) Top producer postcard program
5) Inflation
1) The Greatest, Most Wonderful, Toughest Home Loan
Rick and Michelle Keeper (last name changed) didn't want to rent anymore. They
could have purchased a home of their own long ago but they chose to live in a
rental apartment because of their sons handicap. Rick Jr. has cerebral palsy.
The rental they lived in had an elevator and their apartment didn't have too
many steps or floors to contend with. Rick and Michelle had put off buying a
house since Rick Jr's birth so that they could keep their lives simple and
manage their sons handicap.
Recent home prices and interest rates were enough to make them reconsider
buying again. After looking with their first Agent for about eight months of
looking, the keepers got discouraged and gave up. The properties they were
being shown would have needed a lot of modification to accomidate Rick Jr.-
they simply didn't have the extra money to invest.
Their original Agent told them that they would probably need a down payment and
closing costs of about $12,000. The estimated handicap accomidations and other
upgrades to the home would be about $22,000 bringing the total cost of the
purchase close to $34,000. The Keepers didn't want to clear out their savings
so they stopped looking.
On a Sunday a few months later the Keepers were driving around thinking again
about the purchase. They drove by an open house near their apartment and
decided to stop in and have a look. The Agent at the open house took the time
to find out about their special needs and saw a genuine opportunity to help. He
called me while they were at the open house and we had a mini conference call
regarding the purchase.
To the agent this was an ideal opportunity for the purchase rehab/upgrade
program. The Keepers should not have been initially told they HAD to spend
$34,000 to buy and upgrade a home. With a properly structured contract, the
sellers help and the 'ks' loan we could keep their FINAL closing numbers to
around $5000.
Because of the sensitive nature of their situation and the detailed scope of
the loan, we all needed to sit down and talk process. After the Keepers sent me
their application package and I preapproved them, we all got together to
discuss the transaction in detail and to create a plan. The meeting was about
three hours long and we discussed almost every detail of the purchase process.
I wanted them to fully understand what they were getting into and to not
underestimate the process. The Keepers were amazing and once the expectations
were set, they were all in.
It took about 45 days to find the right home and another sixty days or so for
us to configure and close the loan. Few transactions are easy these days but
this one required me to log about 70 hours into the file but the home turned
out to be a perfect fit for their unique needs.
It was The Greatest, Most Wonderful, Toughest Home Loan I've done in years but
it was worth every minute.
2) VA and USDA loans, as you know, are zero down payment. Often times they are
zero down and zero closing costs.
The most current foreclosure numbers from the MBA show that these zero down
payment loans are peforming very well. The foreclosure numbers are only
slightly worse than prime and better that FHA with its 3.5% down. As I've
always said, its not the zero down, its the debt to income ratio's that
make the difference. Subcrime loans, which have abismal foreclosure
stats, relied heavily on high debt to income ratios to qualify their borrowers.
Remember, most of the subcrime loans were used for cash out refinances. VA and
USDA show that zero down loans works very well when prudently applied.
3) Who would do better to own foreclosure properties?: The taxpayer through
Fannie Mae and Freddie Mac or private buyers/investors with 20% down payments
and 740 fico scores with stated income loans?
If you believe the later you would be correct. The taxpayer is being bilked for
legal fees and management costs to the tune of billions a year in order to
manage Fannie and Freddie foreclosures. Default rates for 20% down high fico
stated income borrowers were historically very low prior to the subcrime
fiasco. The next time you see your Federal Representative, mention this fact.
20% down 740 fico stated income is not the same as 580 zero down stated income.
We should all tell them to stop using the axe to "adjust" lending guidelines
and stop killing the housing market with draconian regulations.
4) My office has incorporated a postcard mailing system into its marketing
efforts. Are you having a tough time staying in touch with your past clients
due to the lack of time or cost? Most agents miss repeat business because they
don't stay in touch. We've developed a solution for our tier one business
partners. Please call if you'd like some assistance with your marketing.
5) Did you like rates in the 4's? It appears we are at the tailend of 4's. Talk
of inflation has gotten heated in the last few weeks and we're seeing more
tightening around the world. It's safe to say we'll see inflationary
pressures here within the next year or sooner. What's that mean? Without a
doubt it will mean a jump in rates and no return. I'm beating the drum but I
hope you too will too with your clients. Use this opportunity to educate
potential buyers to get in and lock while the getting is good.
As always, staying ahead of the curve to keep you informed.
Gil Kerbashian
NMLS 197757
Residential Lending Since 1997
(847) 873-7295
Northwest Mortgage Services, Inc
7808 Virginia Road, Crystal Lake IL
Illinois Home Loans
HomePath Incentive Starts Sept 23rd
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The Effect of Fannie Mae's Loan Quality Initiative
On July 1st Fannie Mae commenced the "Loan Quality Initiative" in order to
raise loan underwriting standards. Two common features of this initiative
include second credit reports on all borrowers just prior to closing and a
second underwriting signature and review on many loan files. I've briefly
summarized a research report finding below:
- Quality of funded loans has substancially improved which has helped to
increase the salability of mortgage backed securities
- Loan underwriting declines are at historically high levels
a) some of the primary reasons for loan declines were: Income, debt
load, derogatory credit and inappropriate funds to close
- Many home loan applicants are not properly prepared for the loan
qualification process
- Lenders are choosing to specifically underwrite to their own more
stringent guidelines and relying less on automated approval certificates for
guidance
- Appraisal quality is still an issue
- Cost to originate loans has greatly increased
- Underwriting turntimes have increased taking longer to clear the new quality
control layers
The Negative Equity Carryover Model: A Practical and Effective Solution to Our Housing Crisis and the Epidemic of Negative Home Equity
Negative home equity for America’s Homeowners has become an epidemic problem. Nationwide, homeowners are chained to their homes unable to sell due to the shackles of negative equity. This lack of mobility comes at a cost to society and at a time when the public’s need for mobility is at its greatest.
Industry needs this mobility to balance labor requirements, labor needs this mobility to find and create job opportunities, families need mobility to consolidate households and care for aging relatives and others to simply downsize into homes that they can manage and afford financially.
Banks are resistant to negotiate short sale settlements for the fear that the losses on these mortgages will spiral out of control and bring the banks to their knees. Many borrowers are choosing to strategically default in an effort to break the chains of negative equity in order to get on with their lives.
Negative equity, short sales and foreclosures have become a lose-lose situation for both homeowners and lenders.
The Federal Government needs to create legislation making it practical and feasible for banks to offer a safe and equitable alternative.
The “Negative Equity Carryover Model” proposes that negative equity be carried forward to the purchase of a subsequent home purchase or as a personal loan to the homeowner after the property sale.
Homeowners and banks won’t need to negotiate the loss of equity as is currently being done through short sales and foreclosures. Negative equity can be “carried” by a homeowner as a second lien into the purchase of another home or onto a credit report as a personal line of credit. The Model suggests that rather than write the loss off at time of sale through a short sale or foreclosure, the negative equity can be carried into the future as an independent debt/lien and slowly forgiven over an amortized timeframe. The homeowner’s credit would be saved and we as a nation could avoid the wholesale destruction and lockout of a future homeownership class due to damaged credit. Lenders could amortize the negative equity over years while still maintaining some lien position just in case homeownership equity returned.
Gil Kerbashian (847) 873-7295
I need to make a home loan application - help!
Home Loan Purchase Process Video:
"When discussing the loan process with homebuyers, I stress that they must be completely candid with their loan officer, be incredibly detailed and provide as much documention as they can. This is the new norm for home loan approvals". David Stevens -FHA
IMPORTANT OVERVIEW:
In the next few days or weeks you'll be looking at a handful of homes. One will catch your eye and you want to be completely prepared to make a strong offer. Most sellers give higher priority to buyers who have secured a full Home Loan Preapproval Letter over those other homebuyers that have only been "prequalified" over the phone. A full preapproval review with assets, income and liabilties verification is the highest level of preparedness. The application process below is oriented toward a successful full preapproval. How much of a committment would you ask for if you were lending someone $100,000, $300,000 or $500,000?
At the bottom of this letter you will find an internet link to a basic home loan application and credit authorization. Please click on it after you've read this overview. And please, always call if you have any questions while reading over and completing the forms or at any other time. I enjoy helping my customers and look forward to helping you, your friends, co-workers and family. Your referrals are always appreciated.
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PLEASE DO NOT MOVE ANY MONEY AROUND UNTIL YOUR LOAN CLOSES. If a bank verification shows a recent increase in your accounts an explanation of the increase will be required and may cause delays. No "cash, non-payroll or matress money" should be introduced into any part of the transaction without a prior discussion.
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Postpone ANY LARGE PURCHASES until after your loan closes. If a re-verification of credit JUST PRIOR TO CLOSE shows you have recently increased credit balances it could jeopardize your loan approval.
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Notify me immediately in the event of a job change.
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Don't take any Cash Advances on your credit card(s) or personal loans.
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Don't allow any additional inquiries (credit checks) on your credit report.
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Do not open or close any credit or bank accounts.
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Continue to make ALL of your payments as agreed.
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Quickly return all documents from the lender or closing company. You will be mailed papers from time to time, send all received documents that you receive in the mail regarding the loan to me for immediate review.
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Your loan will be underwritten to nationally accepted mortgage guidelines. The investor is lending a great deal of money, please don't "self-underwrite" your loan. Be prepared to offer all paperwork that is asked of you all the way to the day of close. A lot of money and trust is being conveyed to you- please don't take the loan or process for granted. Gathering paperwork is a good deal for all the funds you will be receiving.
- Once a contract has been accepted your mortgage rate and terms need to be locked. You must email or call me directly after the accepted contract to discuss where rates have settled on this day. If you don't call, I may lock your terms the day I receive the fully executed contract at then market rates.
- Please send me a copy of your purchase contract earnest money check front and back showing the check processed through the bank along with the official bank statements showing the earnest money deposit taken out as soon as it becomes available.
- PLEASE SEND OFFICIAL BANK STATEMENTS FOR ALL NUMBERED PAGES EVEN IF THE PAGES ARE BLANK. ANY ITEMS SUCH FAXED SHOULD BE LEGIBLE. PLEASE SEND ITEMS AS QUICKLY AS YOU CAN.
Be mindful that lenders conduct quality control checks -calling to verify your employment or savings. Are you receiving down payment assistance from an outside source? Please be prepared to document all non-payroll deposits. If the source is a gift from a close relation, you'll need: 1) Gift letter, 2) donors bank statement, 3) copy of the original gift check made out to you, 4) copy of deposit slip going into your account, 5) bank statement to show the deposit was captured to your account, 6) copy of the gift check post deposit front and back from donor showing it went through the bank processing center and 7) copy of the donors bank statement showing the gift check clearing. Different underwriters may differ in their requests, please be prepared to fully document non-payroll deposits, monitary gifts and outside downpayment funds. NO "cash/matress money" or loans for closing funds.
Two weeks prior to closing you will want to call your homeowners insurance agent if any insurance coverage is needed and pay for a full policy and have the insurance company fax the policy to me (cost credited to you at closing).
Stay flexible in your closing timeline in case closing is delayed.
Once the purchase contract is accepted by the seller we will need to order a property appraisal. Appraisals require payment directly to the appraisal company in advance. The cost of the appraisal will be credited to you at closing.
After all the above procedural stuff, what really matters is... The season to enjoy your own home is coming and what a wonderful time to make the transition!!!
Your referrals are valuable. Do you know any friends, family and co-workers that can also use my services now? Can you email this article?
Cordially Yours, Gil Kerbashian
(847) 873-7295
Fax: (847) 770-4850
The loan application has a very important list of items at the bottom that I will need to gather in order to issue strong preapproval. Always call if you have any questions. Once you print the application, you can complete it, fax it or we can meet quickly to go over it together and make sure you feel comfortable with the process.
One Page Loan Application: www.realestateloans.com/gilsapp.pdf
FHA AND CONVENTIONAL HOME LOAN Closing cost basics for Illinois: www.realestateloans.com/gfe.pdf
ARC Loans
The term ARC Loans is another name for a regular mortgage refinance. The difference is that with ARC Loans the fee's for the refinance are usually buried in the rate, which means a borrower will usually pay a higher rate in order to defer loan fees. Paperwork is still required and if the borrower doesn't qualify for a streamline, as most do not due to declining value markets, a new appraisal will have to be ordered.
ARC loans can be executed by any mortgage lender or broker. for the purposes of arranging a plan to reduce a borrowers mortgage interest rate at specific intervals.
ARC stands for Automatic Rate Cut.
This is not a Fannie Mae, Freddie Mac nor an FHA designated program. This is not a government program nor an industry wide secondary market type regime. This is a marketing effort to repackage refinances into an easy to remember package or hook.
Each time a homeowners mortgage rate drops by a .25% as the rate market improves, the or a lender will notify the borrowers that the rate can be refinanced into a lower rate. It's really more a reminder system than anything else and its most effective with loan amounts greater that $150,000. Trying to do an ARC Loan with smaller loan amounts is not profitable for the lender and usually not all to attractive for the lender to execute.
Some lenders have set up automatic triggers for each of their loans in their system to let the lender and the borrower know that it may be time to look at refinancing.
If a borrower is saving $150 a month, a refinance may be worth looking at. The con's are that the loan term will restart and the borrower will lose the months or years they've already paid into the loan.
Most borrowers are looking for a convenient way to save money on their monthly mortgage payment, and a way to refinance that isn't as intense as most big banks make it. Borrowers should look for someone that is local and can offer the service they need.
Borrowers shouldn't fool themselves into thinking that a lender will lend 100 of 1000's of dollars on a property that they haven't re-appraised or lend to a borrower that the bank hasn't verified income or assets on.
There's just too much risk in lending today to think that easy money or easy qualifications is a smart thing to fool around with.
Who Owns My Loan?
Here are two links and phone numbers that you might find useful. Many borrowers are getting the run-around when they call their mortgage servicer to find out if their loan is a "Fannie or Freddie" loan and if the loan might qualify for a loan modification. Call or email the below numbers to Fannie Mae and Freddie Mac to find out if your loan is "held" by the government sponsored loan agencies.
Many of us in the mortgage brokerage business understand borrower frustration, we've been dealing with it for years when trying to get mortgages approved.
Does Freddie Mac have my mortgage online request form 1-800-FREDDIE (8am to 8pm EST)
Does Fannie Mae have my mortgage online request form 1-800-7FANNIE (8am to 8pm EST)
Fannie Mae's New Loan Quality Initiative
Lenders and Realtors can expect increased quality control (QC) measures on the pre-closing (and post-closing) sides of loan transactions. The big news here is the pre-funding QC and how it will impact purchase transactions timelines. In an effort to increase loan quality and decrease non-prime borrowers, Fannie has introduced additional review requirements.
I have in the last 60 days been experiencing a higher level of "nuisance conditions" which tells me that the QC process has already commenced with some lenders prior to the proposed rollout date.
The proposed changes:
1. Two different underwrites on not all but many files
2. Resolution of defects prior to closing with a possible second set of borrower/property conditions before the loan funds
3. Numerous back office reporting and management issues that LO and Realtors may feel but won't directly see
And don't forget about the new credit report pulling change.. new credit reports to be pulled on all borrowers before closing.. this starts JUNE 1.
Expect delays. Be mindful that you may see a 2nd set of closing condition prior to funding.
DON'T OVER SIMPLIFY THE LOAN PROCESS WITH ANY OF YOUR BUYERS/BORROWERS. TELL THEM THE TRUTH AND ENCOURAGE A REALISTIC COMMITMENT TO THE PROCESS.
Do I Have a Fannie Mae or Freddie Mac Mortgage?
Does Freddie Mac have my mortgage online request form 1-800-FREDDIE (8am to 8pm EST)
Does Fannie Mae have my mortgage online request form 1-800-7FANNIE (8am to 8pm EST)
