FHA issues two new mortgagee letters

FHA issues two important ant mortgagee letters
Mortgagee Letter 08-40 This changes or in effect for case numbers order on or after Jan 1, 2009. This mortgagee letter discusses Refinance Calculation for calculating loan amount and other Refinance issues.

Mortgagee Letter 08-41 Termination of FHASecure Program.


Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Streamline Loans and Condo's

Another FHA Streamline tip: If you have an FHA loan that propetty type is a condo that is no longer approved with FHA you can streamline it without an appraisal even though it is no longer FHA approved. Steeamline loans with an apprisal must be FHA approved


Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

FHA changes Q and A site

FHA will begin using a new Frequently Asked Questions (FAQ) service as of December 8, 2008. This change required some modifications to the look and feel of the FAQ site ( http://faq.fha.gov ) as well as the need to use a new primary email address for email inquiries to FHA. (This link is also on the left hand side of my FHA Menu Blog)

The new primary email address for FHA is now: info@fhaoutreach.com (
In addition, clients may also utilize the "Contact FHA" tab on the FAQ site to submit questions directly to FHA.

FHA believes these changes will improve our ability to communicate with our clients and look forward to responding to your needs.

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

What is the LTV/CLTV for streamline loans

Tips on FHA Streamline Loans
What is the LTV/CLTV limit on a Streamline Loan? A Streamline loan without an appraisal has no LTV limit. Your max calculation is based on the previous loan amount + new upfront mip (see my link in the FHA menu for Streamline loan without an appraisal worksheet link). A streamline loan with an appraisal at the begging of the year can not exceed the LTV of 100% with MIP. There is not CLTV limit in regards to either a streamline loan with an appraisal and without.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Mip on FHA Streamline Loans

Effective with case numbers issued on or after October 1, 2008, through September 30, 2009:
Upfront MIP Streamline Refinance (all types) 1.50%
(UFMIP) Annual (Monthly) - Based on LTV*
(excluding UPMIP) and loan term
> 15 Year Term
Streamline Refinance (all types) > 95.00 = .55
< 95.00 = .50 > < 15 Year Term 90.00 = .25
< 90.00 = None
* LTV must be computed to two decimals (e.g., 95.65)
• Enter "9999" for credit score in Pronto

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

FHA Refinance Tools

The current rates will bring a lot of Refinance business: Here are some tools that should help you
FHA
FHA has four worksheets you need when you refinance a loan. Choose between them for your scenario. These links are also on my blog in the FHA Menu on the left hand side of the screen under forms.
No Cash-Out/Non Streamline – Refinance Maximum Mortgage Worksheet #1
Cash-Out/Non Streamline - Refinance Maximum Mortgage Worksheet # 2
Streamline Refinance Without Appraisal - Maximum Mortgage Worksheet # 3
Streamline Refinance With Appraisal - Maximum Mtg. Worksheet #4

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

When is a loan eligable for a streamline refinance

The loan you are refinancing must be an FHA Loan (can not have been a FHA Secure Loan). The old and new terms must fall under one of the following scenerio's

ARM-ARM Immediate payment reduction required and the maximum interest rate of the new mortgage doesn't exceed the maximum interest rate of the old.
ARM-Fixed Interest rate on the new Fixed will be no greater than 2% above the current rate of the ARM
Fixed-ARM Interest rate of the new mortgage is at least 2% below the interest rate of the current mortgage
Fixed-Hybrid ARM Immediate payment reduction is required

The loan being refinance must be FHA insured and you can not increase the term of the loan more than 10 years.

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

What Documents are needed to do a Streamline loan

Putting together a FHA Refinance streamline loan is simple. You generally do not need to document credit, income or appraisal value. There are exceptions and I will go into that at a later date. The following documents are needed for a streamline loan:
Old case number
Original note
12 month Mortgage Rating, if the loan is new document from the time of the new loan(MLHL allows 1x30 days late in the last 12 months)
Application (short version)
– Name, address, social security and phone
– Current employment, phone
FHA Streamline worksheet
New FHA Transmittal
Netting Authorization from FHA Connection
Verification of Social Security number
Borrowers authorization form signed
CAVIRS
Disclosures


Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

HUD Homes can help homeowner strapped for down payment

With the market getting tighter the need to find a 100% loan is becoming increasingly harder to find. Don't forget HUD homes. The borrower finds a realtor that deals with HUD homes and makes a bid on a property that is owned by HUD. If the bid is accepted the down will be specified in the sales contract usually the down is $100, $500. If you want to know more go to

About Buying HUD Homes

Property Searh
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

FHA announces 2009 Loan Limits

FHA issues Mortgagee Letter 08-36 announces 2009 Loan Limits

Attachment I -- FHA Loan Limits for Areas AT CEILING AND ABOVE

Attachment II -- FHA Loan Limits for Areas BETWEEN CEILING AND FLOOR



Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Calculating Income to qualify for a mortgage

Processing Tip
The credit freeze has made underwriting more particular than ever. Here are a few pointers to help you get your loan approved the first time. Loans that loose their Accept status when they are underwritten usually loose this because the underwriter calculates the income differently than you did. Many times if the underwriter knew how you calculated the borrowers income they would accept it. If I was processing a loan I would always include the calculation of income in my loan file. Make sure you know the guide lines regarding the income calculation. If you want an exception from the guidelines be sure and state the reason you feel the borrower deserves this exception. Example: overtime usually always requires a two year history. Your borrower has only been on the current job 12 months. However they had overtime in the previous job. In this scenario include a VOE of both jobs documenting a two year history. Don’t assume because an employer requires over time that they underwriter will accept that as a reason to have less than two years.

I also find this IRS web site in determining what income is tax deductable or how it should be reported to be helpful - IRS Frequently Asked Questions . Attached is an income worksheet that you could use to calculate income and include in your loan file

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Hope for Homeowners

Effort continues to be made to help homeowners to avoid foreclosure. HUD releases two mortgagee letters for Hope for America Homeowners 2008-30 and 2008-29. Currently no lender is offering this program but here is a recent article that says some are signing up
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Don't forget Oct 1, 2008 changes

What is happening today in mortgage lending: The Federal Housing Administration (FHA) has developed form HUD-92900-LT, FHA Loan Underwriting and Transmittal Summary (LT) to replace both mortgage credit analysis worksheets, HUD-92900-PUR and HUD-92900-WS (MCAWs ) remember that this new forms will be required October 1, 2008. The form HUD-92900-A, Addendum to Uniform Residential Loan Application, has also been updated with minor revisions also required October 1, 2008. This information can be found in MTG letter 2008-15Seller paid DPAs will be gone by October 1, 2008 however most lenders have already announced they are no longer accepting new applications with a DPA. If you have some time to spend you can go to this grant website http://www.grants.gov/ and find a grant. FHA does still accept grants. You can also access this web site by going to my blog clicking on “FHA Tips” on the right hand side, from the FHA Tip page you can find on the left hand side “Helpful FHA Websites” and click on "FHA Allowable Grants". I do want to caution you it would be labor intensive task.The down payment for FHA is scheduled to change January 1, 2009 from 3% to 3.5%The new FHA loan limit will be the greater of $271,050 or 115 percent of an area's median home price, up to $625,500, the temporary limits are still good until Dec. 31, 2008.

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

Now DPAs are gone, now what?

Now that DPA’s are pretty much gone. How can your borrower come up with the down payment?

There is always the option to save for the down payment, which seems hard for many borrowers. Other options are:
1-Gifts from a relative, borrowers employer, charitable organization, government agency or public entity or a close family friend (transaction must be documented).

2-Collateralized loans (i.e. borrower has a loan against an auto would be acceptable transaction must be documented as well as the value of the auto)

3-Sale of personal property (i.e. sale a car again the transaction must be documented as well as the original ownership and value of the car).

4-The borrower can borrower from his 401K or IRA the transaction must be documented.

5- Side jobs a borrower would have to document that they received the income and performed the work and could not be done for someone that is involved in the transaction. It could not be used as qualifying income only for down payment.
6-Employer assistance programs (must be documented)
7-borrower focus on paying off other monthly debt and save future payments towards down payment
8-Commission from sale if the borrower is a licensed real estate agent or a family member the commission can apply towards down payment
9-Sweat Equity this only applies to new homes and must meet requirements of the 4155
10-Cash value from a life insurance policy
11-Rent Credits-this is the cumulative amount of the rental payment that exceed the appraised estimate of fair market rent this is only for lease with option to buy. Must have copies of cancelled checks.
12-Grants

Can you think of any other options?

Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com

FHA TIP

3/1 FHA ARM

The 1 and 3-year FHA ARMs are the best ARMS out there right now. As you know there is no pre payment penalty. The index is the Weekly average yield on U.S. Treasury Securities adjusted to constant maturity of one year.

The FHA 1-, and 3-year ARMs allow up to a one percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a five percentage point interest rate cap over the life of the loan. Most ARMS can adjust 2% a year and 6% over the life of the loan.
The FHA 5-, 7-, and 10-year ARMs allow up to a two percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a six percentage point interest rate cap over the life of the loan.The other day I was noticing that a 30 year Fixed rate was paying the same yield at 6.375 as was the 3/1 ARM. If we were to do a loan on the 3/1 arm vs. the 30 year with the loan amount at $100,000 and assuming that worst case on the ARM adjustments, this is what the next five years would look like:

30 year PI payment would be $623.86 at the end of three years the balance on the loan would be $96,336 at the end of four years the balance would be $94,951 and the borrower would have paid a total of $29,945

The 3/1 Arm The first three years the borrower would make payments of $559.97 at the end of the third year their balance would be $95,633. Assuming worst case at the end of the third year and the rate went up 1 % their new payment would be $619.31 and their balance at the end of the fourth year would be $94,258. Lets say the end of the fourth year the rate went up again 1% the new rate would be 7.375 and their payment would be $679.79 it take until the fifth year for the payment to be higher than on the 30 year fixed. The total they would pay out over the four years would have been $27,589 still less than the 30 year fixed. Its going to take several years even after the payment becomes higher than the 30 year fixed before the consumer pays out what they do on a 30 year fixed.

If the borrower made the 30 year fixed payment towards the 3/1 ARM loan the savings would be Hugh by the time they reached the end of their fourth year the balance on the loan would be $91,548. I think the 3/1 ARM is a great program.

Remember if the LTV is higher than 90% on the 1 year arm you have to qualify 1% above the start rate. "You may want to check my math but I think the idea is close"

Want to learn more about ARMS? Try this link out http://www.federalreserve.gov/pubs/arms/arms_english.htm