(All info provided assumes existing FHA loan was originated

on or after December 15, 1989)

·         Buyers must credit-qualify to assume existing loan for remaining term.

·         Buyer will obtain assumption package from current loan servicer.

·         Loan fees are lower than a new-loan origination.

·         Sellers will be released of liability.

·         No appraisal required.

·         Investors do not qualify for assumptions.

·         Cash contributions from the seller to facilitate the assumption are not allowed.

·         Seller may pay buyer’s closing costs and processing fees.

·         The borrower may use secondary financing and borrowed funds.

·        Assumptions for use as second home is prohibited UNLESS there is a hardship due to no affordable rental housing available within a reasonable commute distance to employment. 

Be sure to do the research on a listing to determine:

·         Is this home currently financed with an FHA loan?

·         What is the current balance on the loan?

·         What is the remaining term of the loan?

·         What is the monthly payment?

What is the interest rate on the loan?

We just got done telling you for the last 5 months that the only way we could do a VA loan on a condo was if the project was on the VA approved list.  This change is a big deal for the next 6 months and will open up the number of properties available to veteran buyers.

It’s good news, although it will only help us with VA condo loans on most FHA approved projects until December 7 of this year.  That’s because the majority of FHA approved projects (those approved prior to October 1, 2008) have to be recertified under the new guidelines (the ones that VA doesn’t like) by December 7.

So for now, it is possible to do a VA loan on a condo under one of the following circumstances:

1.      The project is on the VA approved list. http://condopudbuilder.vba.va.gov/2.2/frames.html]

2.      The project is on the FHA approved list and was approved before December 7, 2009.  : https://entp.hud.gov/idapp/html/condlook.cfm]

At least it may save a few deals between now and then.

HUD says “Hold Off” on your audited financials

(the rules are changing soon)

As proposed in a November 30, 2009, proposed rule (74 FR 62521), HUD is seeking to eliminate FHA approval for loan correspondents.  Because this rulemaking is still in process and a final rule has not yet been issued, FHA is extending the deadline for the submission of audited financial statements for loan correspondents seeking renewal of their FHA lender approval for 2010.  For loan correspondents with a fiscal year end of December 31, and that would ordinarily be required to renew their FHA approval by March 31, 2010, HUD is providing these lenders with an additional 30 days in which to submit their audited financial statements.  These loan correspondents must continue to comply with existing requirements for the submission of their Annual Certifications and renewal fees, but will be given until April 30, 2010, to submit audited financial statements.  Again, the deadline for the submission of the Annual Certification and renewal fee has not been changed.  Loan correspondents that do not complete their renewal in accordance with the deadlines as specified above will no longer be FHA-approved as of the effective date of the final rule that follows the November 30, 2009, proposed rule. 

Many loan correspondents will get caught in a timing fiasco as they won’t want to lose their ability to do FHA loans but will have to pay fees to retain the privilege.  A privilege that will be taken away from them in the near future.  Then they’ll be scrambling to find a lender to accept them into the “fold” (which may still require audited financials) in order to continue originating FHA loans.  Tough stuff. 

Maybe a more appropriate headline would be “Make Hay While the Sun Shines -

FHA just announced another delay to the implementation of the new Condo Approval Process to December 7, 2009.

They are claiming that within two weeks they will issue new guidance that will be a kinder, gentler version of the original condo approval process and offer more clarification.

But the really surprising news is that they’ve reversed their position (temporarily) on spot loans.  Mortgagee Letter 2009-19 eliminated the spot loan approval process as of June 12, 2009.  Now they are telling us that we can do them again until December 7!!  Could this be a hint of things to come???

Official Notice Released Today:

FHA notice on delay in FHA condominium changes: 

Implementation of FHA’s new policy guidance for condominium project approval and condo unit financing will be delayed until December 7^th  2009.  The new guidance, to be issued within the next two weeks, will:  1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.   

Until the new guidance takes effect on December 7^th, 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41.  Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.

HUD is touting it as “aren’t we great because we are now opening up the FHA opportunity to more brokers” when in fact they are creating a situation where the responsibility is passed to the lenders (which I understand) and the lenders could easily be more stringent than HUD on which brokers they are willing to take responsibility for. 

The new proposed rule says that there will be no more mini-eagles and brokers will not be approved by HUD-period.  They will work through an approved lender and the lender will have to take all the responsibility for them. I believe it squeezes the broker out even more,  (which again, I understand why) but they are trying to spin this as a positive thing for the brokers when it isn’t.  It’s another “stop the bleeding” move by HUD! 

Originally set to take effect on October 1, I think FHA finally realized that they did not allow enough time for companies to get their arms around the condo re-approvals as outlined in their recent mortgagee letter.  Tell your RE Agents that if they have condo listings, which are likely to sell using FHA financing, that a case number needs to be ordered by NOVEMBER 1 because November 2 IS the date that everything starts all over again. 

Nothing else has changed!  If you want to learn what needs to be done to get the condo projects approved in your area, Tracey Rumsey (FHA expert and one of the speakers at Mastermind) has an online seminar, with step-by-step details on what you need to do. 

here\’s the link
http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm

www.LoanOfficerSeminars.com - which inlcudes a Mortgage Talking Points Flyer/email notice for your real estate agents called Tough TImes Ahead for Condos!

FHA fired the warning shot in December of last year when they issued Mortgagee Letter 2008-39 Revised Eligibility Requirements for FHA Roster Appraisers.  They also gave us a reprieve and extended the deadline for these requirements to October 1, 2009.

Go through your approved appraiser lists now and verify that your FHA appraisers are CERTIFIED with the state, not just REGISTERED.  If they are not CERTIFIED you cannot use them for properties with case numbers issued on or after October 1, 2009.

Certified and uncertified appraisers alike will still be in the FHA system come October 1, 2009.  If you assign an appraisal to a non-certified appraiser the appraisal will be uninsurable.  You (the lender) then get to complete (at your expense) a new appraisal performed by a certified appraiser.  You MAY NOT charge a borrower for the second appraisal.

Keep in mind that you probably won’t catch this faux pas until FHA informs you that your loan is uninsurable. Then you could be faced with rate-lock expiration issues as you wait with your fingers crossed on the second appraisal, which may or may not come in at the same value with the same property condition requirements.  What a party!

Did you know that as of October 1, 2009, the FHA spot loan approval process for condo loans has been eliminated?  And that MOST condo project approvals will be invalid after that date too?

It’s gonna’ be UGLY–and the only projects that will remain on the list are those that have been approved after October 1, 2008.

If you have any FHA buyers on the fence, looking for just the right condo to purchase, they need to do something or they won’t be able to buy a condo - period - at least for a while.  Real estate agents need to advise condo sellers that FHA financing is going to be limited.

A new online seminar can now be viewed at www.LoanOfficerSeminars.com called “FHA Condo Approval Process: What You Need to Know” with audio, slides and all FHA supporting resources.

Mortgage Talking Points(tm) Flyer and email notice also included. 

Just when you thought things were getting better–the government takes it away!