The HARP Deal So Far…

Posted on February 22, 2012 by Kevin Kueneke| Leave a comment

We are finally getting more specifics regarding The HARP Deal, the most recent version of the Fannie Mae and Freddie Mac refinance program.  Fannie’s version of The HARP Deal is called the DU Refi Plus.  Freddie’s version of The HARP Deal is called LP Open Access.

Here are some of the details:

INELIGIBLE LOANS FOR THE HARP DEAL:

  • any loan currently in default
  • existing loan delivered to Fannie or Freddie on or after 6/01/2009
  • government loans
  • reverse mortgages
  • not a 1st lien

MAXIMUM LTV AND LOAN AMOUNT FOR THE HARP DEAL:

  • LTV and CLTV is unlimited for all Occupancies and all Property Types
  • Loan amounts are Conforming and High Balance Conforming
  • Loan purpose is Rate and Term Refinance only; loan amount can include pre-paids and closing costs

ELIGIBLE OCCUPANCY AND PROPERTY TYPE FOR THE HARP DEAL:

  • primary residence
  • second home
  • non-owner occupied
  • 1-4 units
  • condos, PUDs, manufactured homes

NUMBER OF FINANCED PROPERTIES FOR THE HARP DEAL:

  • DU – no limit
  • LP – no limit if loan is primary residence, max 4 properties if loan is 2nd home or investment property

NO MINIMUM CREDIT SCORE IS REQUIRED FOR THE HARP DEAL!

MORTGAGE HISTORY FOR THE HARP DEAL:

  • DU  – must be current
  • LP – 0×30 in last 6 months, 1×30 OK in last 7-12 months

The HARP Deal is only for mortgage loans owned by Fannie Mae or Freddie Mac.  To see if your mortgage may be eligible for The HARP Deal, check these two sites first:

Fannie Mae HARP Deal lookup: www.fanniemae.com/loanlookup/

Freddir Mac HARP Deal lookup: www.freddiemac.com/mymortgage

More information to follow for The HARP Deal, but this is a great start.  Contact Kevin Kueneke today to see if you may be eligible for The HARP Deal: www.kevink.amerifirst.us

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Remember When I Asked You Not To Change Anything?

Posted on October 24, 2011 by Kevin Kueneke| Leave a comment

During a typical 30-day escrow period, there is ample opportunity for a potential home buyer to unwittingly sabotage his or her deal. Until the keys are in the buyer’s hands, there are still several things that can cause a deal to unravel, even at the very end. Let’s take a quick look:

Credit Issues: These days, a buyer’s credit is monitored until the end. Not only will the lender find out if a new account is opened, but also if anyone else even inquired into the buyer’s credit after the lender’s credit inquiry. If the new furniture will require financing, best bet is to wait until the loan is closed. If the new home’s garage is incomplete without a new car, wait until the loan is closed!

Remember To Keep Your Paperwork Handy

Remember To Keep Your Paperwork Handy

Employment: Changing jobs during an escrow is always an obvious no-no. But sometimes internal changes can destroy the deal. Examples include being switched from an employee (w-2) to an independent contractor (1099), or compensation switching from salary/hourly to commission. And lenders will call to verify that the buyer is still gainfully employed right before they hit the big “fund” button.

Assets: Many conventional loan programs require a minimum amount of assets or reserves in the bank. Although FHA and VA loans do not have minimums, some loan approvals are given based on compensating factors such as money in the bank after closing.

A loan may be approved based on an older bank statement with a certain amount of cash in the account. However, the approval might require that the most recent account statement be provided. If the new balance is lower, this could jeopardize the loan approval EVEN if there is still sufficient money in the account to cover down payment and costs.

I think every loan officer has had a loan die, or have a closing significantly delayed, from one or all of the above. Properly prepping buyers at the beginning helps, but sometimes you can only do so much. Have to admit, these things keep the industry interesting.

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FHA Mortgage Loans, A Quick Q&A

Posted on October 24, 2011 by Kevin Kueneke| Leave a comment

I was asked the following questions regarding FHA insured financing this past week and thought that the answers were worth sharing:

Q: Are modular homes treated in the same manner as manufactured homes?

A: Fortunately, no. Modular construction is also a factory-built home, but is treated the same as stick-built housing.

Q: Can the Upfront Mortgage Insurance Premium (UFMIP) be paid in cash or must it be financed into the loan?

A: The UFMIP must be either entirely financed into the mortgage or paid entirely in cash. Along those same lines, a seller concession may be used to pay for the UFMIP, but the concession must cover the full amount. As of late 2010, the UFMIP is 1.0% of the base loan amount (purchase price minus down payment).

Q: Is it acceptable to get a loan for the down payment?

A: Yes. Funds can be borrowed for the total required investment as long as satisfactory evidence is provided that the funds are fully secured by investment accounts or real property. This includes stocks, bonds, real estate (other than the property being purchased).

In addition, certain types of loans secured against deposited funds (401k, cash value of life insurance, etc) do not require consideration of repayment for qualifying purposes.

Q: Can gift funds come from an employer?

A: Yes, gift funds may come from the borrower’s employer. However, the gift donor may not be a person or entity with an interest in the sale transaction. Salary advances are considered unsecured loans and are therefore not an acceptable source of funds for closing.

Q: Are the debts of a non-purchasing spouse required to be included in the debt-to-income ratios?

A: Yes, in community property states such as California. However, the non-purchasing spouse’s credit scores are not factored into the loan decision.

Gone are the days when you could remove an unemployed spouse from the loan because they had a large car payment, but no income. Keep in mind that if the non-purchasing spouse refuses to give consent for the credit report then the loan will not be eligible for FHA insured financing.

Q: Is a borrower eligible if they have delinquent Federal debt?

A: If the borrower is presently delinquent on any Federal debt (VA-guaranteed mortgage, Title I loan, Federal student loan, SBA loan, delinquent Federal taxes), then they are not eligible for FHA insured financing until the debt is brought current, paid or otherwise satisfied.

I had a client within this past year that had a delinquent Federal student loan and was therefore ineligible. The client worked out a deal with the student loan servicer and was then able to purchase a home with an FHA loan.

Q: Can an FHA appraisal be transferred between lenders?

A: Yes. When a borrower has switched lenders, the first lender must transfer the FHA case number and appraisal to the second lender upon borrower request. FHA does not require that the lender name on the appraisal be changed when it is transferred to another lender.

Sometimes, a deal will fall out of escrow due to a particular lender’s overlays, i.e., tighter guidelines than actually required by FHA. This way, the buyer can switch lenders and not be forced to pay for a 2nd appraisal.

Hope these tidbits help your business.

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