Blog of the Mortgage

• Minimum FICO = 720 for >80% LTV loans
• MAX DTI = 45% Regardless of AUS Findings for > 80% LTV loans

• No longer offering 95% LTV Financing as before (across the board)
• only providing 95% LTV Financing through selected Lenders with LOW EPD/EPO - (Early Payment Default/Early Pay-Off)

• Max LTV = 90%
• This company has had a Minimum FICO of 680 for quite some time.

Exceptions:

• Rental income on the property being vacated, reduced by the appropriate vacancy factor as determined by the jurisdictional FHA Homeownership Center (90% in California) may be considered in the underwriting analysis under the following circumstances:
  
• Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance.  A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year's duration after the loan is closed is required.  FHA recommends that underwriters also obtain evidence of the security deposit (Copy of a cancelled Check) and/or evidence the first month's rent was paid to the homeowner. 
• Sufficient Equity in Vacated Property:  The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price of the property.  The appraisal, in addition to using forms Fannie Mae1004/Freddie Mac 70, may be an exterior-only appraisal (Drive-by appraisal)using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae1075/Freddie Mac 466. 
  

Another day, another guideline change. I'm beginning to become immune to these aren't you?

• purchase money mortgages with new FHA case numbers assigned on or after January 1, 2009 must meet the revised downpayment requirements
• Closing costs may not be used to help meet the minimum 3.5% downpayment requirement.
• For purchase money mortgages, the LTV is 96.5 percent
• When combined with the FHA first mortgage,
  government subordinate liens are not limited to 100 percent
• Sellers are still permitted to provide financing concessions up to 6 percent of the sales price
• Refinances are not subject to the 3.5 percent downpayment requirement since there is no "downpayment" on a refinance. The LTV will be calculated
• Download the Complete Letter Here:

1. MLDS 882 - Loan Description - Fixed product
2. MLDS 883 - GFE fee breakdown for RESPA
3. MLDS 885 - Loan description & Fee breakdown for Interest Only/ARM feature loans

2007 and 2008 have been tough on values. Everywhere. In California, if FNMA hasn't listed the county as declining then the MI company has and even when those two haven't perhaps the lender has?
There are lots of moving parts to be sure.
The Appraisers that are left are having a heck of a time keeping up with requirements and changes. Add to that any HUD requirements for FHA loans and you've got appraisers that are generally less than happy about having to go back and make corrections.

The number one thing that I try to do (as much as possible) is educate on what is required for Appraisal.
Please print out the linked document and forward it to all of your appraisers. Having them complete the items on this checklist will ensure that you don't have additional conditions at the very end of closing.

When it comes to underwriting Refinances:
If at all possible wait for the completed appraisal to come in and send it along with the submission package.

When it comes to underwriting Purchases:
If at all possible send your purchase contract, prelim and appraisal with your submission.

With respect to FHA (visit my Government page here)
Appraisals require:
Remaining Economic Life (which is why most appraisers are completing the "Cost Approach" section and charging extra on your FHA appraisals).
The appraisers are required to inspect the Property to the satisfaction of HUD's requirements and make at minimum the following statement.
"I hereby certify that the property was inspected and specific systems tested per the 4150.2 and property meets min HUD property standards."
Otherwise the appraiser will have to completely list out in detail how and what he inspected as required by
HUD.
HUD is just now circling back and calling appraiser's that have neglected to address this statement/requirement properly and asking them very kindly to make these corrections (this straight from a 20 year appraiser who personally took one of these calls).
The pervasive issue in the industry is generally lack of understanding with respect to new products.
If your Lender (other than us of course :) ) isn't asking for this to be done that doesn't mean that it is not a requirement.
HUD will randomly audit the files as they come through and shortly there after the sponsoring lender will have to call the appraiser to make corrections in order to gain insurance from HUD.
HUD/FHA business can sometimes arduous but at the same time you have to remember:
1. These are after all Government loans
2. These are loans that aren't otherwise available and then only to a certain set of originators (you guys!).
3. By planning ahead you too can outwit the Government (well, at least a little bit)