Major Changes in Rapid Succession for Next 45 Days!

Written By: Stacey Sprain

Buckle your seat belts everyone because the next 45 days are going to be bustling with a lot of major agency program changes that are very important for all of us to keep track of and plan ahead for. Because so much is happening so quickly and in such rapid succession, I myself had to start maintaining a chart just to stay on top of it all. I’ve found this to be very helpful so I hope it helps you too!

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

Date: Wednesday, August 31
Explanation: FHA Condominium Project Review & Processing Changes Effective
Resource(s): Mortgagee Letter 2011-22:http://portal.hud.gov/hudportal/documents/huddoc?id=11-22ml.pdf
ML 2011-22 Attachment: http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlatch.pdf
ML 2011-22 95 page Condominium Processing Guide:http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf

Date: Thursday, September 1
Explanation: All conventional appraisals with effective date on and after this date must be UAD-compliant.
Resource(s): Fannie Mae UAD Information Page:https://www.efanniemae.com/sf/lqi/umdp/uad/index.jsp
Freddie Mac UAD Overview:http://www.freddiemac.com/sell/secmktg/docs/uniform_appraisal_dataset_87...
Freddie Mac Training:http://www.freddiemac.com/ontrack/html/LearningCenter/ClassDescription.j...
Freddie Mac UAD-Specific Field Descriptions:http://www.freddiemac.com/sell/secmktg/docs/uad_field_specific_standardi...

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

Date: Friday, September 16
Explanation: Last day to close conventional transactions with private mortgage insurance commitments from PMI that are dated between 05/19/2011 - 08/16/2011.
Resource(s): PMI Announcement: http://www.pmi-us.com/media/pdf/PMI_Customer_Announcement081911.pdf
Fannie Mae 8/24/2011 Announcement:https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/sel1108.pdf
Freddie Mac Announcement:http://www.freddiemac.com/singlefamily/news/2011/0822_pmi.html

Date: Saturday, September 17
Explanation: DO/DU for government loans will update to incorporate various changes and updates for FHA and VA lending.
Resource(s): Fannie Mae 07/19/2011 Release Notes:https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndug0911.pdf

Date: Friday, September 30
Explanation: Temporary High Balance Loan Limits valid 01/01/2011 – 09/30/2011 expire.

• Conventional Loans: Conventional loans with note dates after 09/30/2011 are subject to the permanent loan limits effective 10/01/2011 – 12/31/2011. Important Note: Many lenders have implemented more conservative cutoff dates. Be sure to check your lender’s specific requirements!
Resource(s): Fannie Mae 08/15/2011 Announcement:
https://www.efanniemae.com/sf/refmaterials/loanlimits/pdf/hcaaug2011.pdf

• FHA Loans: Purchase, non-FHA to FHA refinances and credit-qualifying FHA to FHA refinances with appraisal must have both case assignment date and credit approval dated on or before 9/30/2011 or are subject to the permanent loan limits effective 10/01/2011 – 12/31/2011 and the additional requirements listed below.
Credit Approval is defined as the underwriter’s approval date of the loan. (See Mortgagee Letter 2011-29 for further details on definition of Credit Approval date). Non-credit qualifying streamline refinances with or without appraisal must close on or before 9/30/2011 or are subject to the permanent loan limits effective 10/01/2011 – 12/31/2011 and the additional requirements listed below.

Important Note: Many lenders have implemented more conservative cutoff dates. Be sure to check your lender’s specific requirements!

Additional Requirements for FHA to FHA refinances originated on and after 10/01/2011, Credit-Qualifying FHA to FHA refinances with cases assigned before 9/30/2011 that are not credit approved by 9/30/2011, and
All FHA to FHA non-credit qualifying streamline refinances with or without appraisal that have not closed by 9/30/2011 or that are originated after 9/30/2011:

o The maximum loan amount of the new FHA-insured mortgage, including all fees, closing costs, mortgage insurance premiums (MIP), interest, etc., must not exceed the original principal amount of the existing FHA-insured mortgage. Should the maximum loan amount (based on the original principal balance of the existing FHA mortgage) be insufficient to cover allowable interest, MIP, closing costs, fees, etc., the borrower shall provide cash to cover the costs that exceed the allowable maximum loan amount.
o The new FHA-insured mortgage may not have a term of more than 12 years in excess of the unexpired term of the existing FHA-insured mortgage.
o The monthly payment due under the new FHA-insured mortgage is less than that due under the existing FHA-insured mortgage for the month in which the new FHA-insured mortgage is executed.
o The mortgagee cannot require a minimum principal amount to be outstanding on the existing FHA-insured loan.

Resource(s): Mortgagee Letter 2011-39:http://portal.hud.gov/hudportal/documents/huddoc?id=11-29ml.pdf

• VA loans: The maximum guaranty for VA guaranteed loans will remain unchanged. The Veterans’ Benefits Improvement Act of 2008 provided a temporary increase in VA loan limits for loans closed January 1, 2009 through December 31, 2011. Because of this legislation, VA loan limits will remain the same for the remainder of calendar year 2011.

Resource(s): VA Announcement:http://www.benefits.va.gov/HOMELOANS/docs/2011_Oct_thru_Dec_Max_Guaranty...

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

Date: Saturday, October 1
Explanation: USDA Guarantee Fee decreases from 3.5% to 2.0% for purchase transactions and a new annual fee of 0.3% is effective for purchase and refinances transactions that receive RD commitment on and after 10/01/2011. Important Note: Many lenders have implemented more conservative cutoff dates. Be sure to check your lender’s specific requirements!

Resource(s): RD AN-4551 issued 02/03/2011:http://www.rurdev.usda.gov/SupportDocuments/an4551.pdf

Date: Saturday, October 1
Explanation: Funding Fees set to decrease for VA loans that close on and after 10/01/2011.

The new funding fee structure is said to look like this:
• First Time Use of Entitlement
o No down payment: Active Duty: 1.4% / Guard or Reservist: 1.65%
o 5% or more down payment: Active Duty: .75% / Guard or Reservist: 1.0%
o 10% or more down payment: Active Duty: .50% / Guard or Reservist: .75%
• Subsequent Use of Entitlement for all:
o Loans closed 10/01/2011 - 09/30/2012: 2.8%
o Loans closed 10/01/2012 - 09/30/2013: 2.15%
o Loans closed on and after 10/01/2013: 1.25%

Resource(s): VA has not yet announced publicly, however, this information was covered by a representative from a VA Regional Loan Center in a recent VA Updates webinar. Note that it’s possible the change to funding fee structure may not happen or could be adjusted as disputes and new proposals could run through Washington before 10/1.

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

Be sure to keep watch for announcements at VA Home Loan’s Home Page athttp://www.benefits.va.gov/homeloans/
As well as for VA Circular releases at http://www.benefits.va.gov/homeloans/new.asp.

It’s a LOT to keep track of so I help that laying all of these changes out in this format is as helpful to you as I’ve found it has been for me!



About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: contact@mortgageprocessor.org.


Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.