So HVCC is Over? – Nope, it Still Lives On – Fannie Mae’s Appraisal Policy Broken Down

Breaking Down Fannie Mae’s Appraisal Rules Have you heard of the Home Valuation Code of Conduct (HVCC)? If you are a lender or Realtor, of course you have. What I wanted to do with this post is breakdown Fannie Mae’s policy now that HVCC has expired. Basically the Code lives on and has been slightly rewritten from the original. Unlike HVCC, Fannie’s policy has the force of law behind it. This new policy is clearly illustrated in Fannie Mae’s Appraiser Independence Requirements, Fannie, Freddie Mac, the Federal Housing Finance Agency and others developed this specifically to replace HVCC. So whether …

Short Sales DO NOT Require a Delinquent Mortgage – “Imminent Danger of Default”

Clearly, many if not most short sales involve a loan presently in default. As well, many times a short sale might involve a current borrower who can currently afford the payment. In several other situations, a seller may be “just hanging on” and the smallest thing could put them irreparably behind on their loan. Welcome to “eminent danger of default.” In a hardship letter for a short sale (also known as short payoff), if a borrower/seller is currently not in default but can justifiably make the case that it is nearly unavoidable despite their willingness if circumstances were otherwise, they …

Do’s and Dont’s with Credit During the Home Buying Process

When buying your next home, changes to your credit (additional accounts, closing accounts, fluctuating credit card balances) can result in the lowering of your credit score. If your credit score changes, that can affect your interest rate and even the loan approval itself. Therefore, it is imperative that there are no major changes to your credit and information provided, during this process. In order for your loan to reach final approval and fund, you’ll want to adhere to the following: DO NOT charge any new items on your charge cards (higher balances will lower credit scores). DO NOT apply for …

FHA Premium Rate Increase Makes PMI a Better Option for Many Borrowers

The Federal Housing Administration (FHA) implemented a 25 bps increase to its annual premium rates on April 18, resulting in a payment increase for FHA borrowers. With this change, RMIC (an iLoan preferred mortgage insurer) offers equal or lower monthly premium rates on all LTVs with no upfront premium. RMIC Monthy PMI vs. FHA MIP · Lower Total MI Premiums 30-Year Fixed · Purchase1 Unit Primary Residence Loan Amount £ $417,000 > 95% LTV · 35% Coverage 95% LTV · 30% Coverage FICO 720+ FICO 700+ RMIC FHA RMIC FHA Upfront — 1.00% — 1.00% Year 1 1.15% 1.15% 0.94% …

10 Home Renovations That Don’t Necessarily Add Value

Some people assume that all renovations done to the home will add value.   As a matter of fact most people spend thousands of dollars on expensive upgrades and renovations over a period of time. What these people forget is that the next owner may not like the renovations.  Everybody needs to remember that your home is only worth that of homes of comparable size are appraised at, not necessarily by the characteristics of your home.  Yes, some qualities are highly sought after like garages, finished basements, enclosed yards or large kitchens but you need that certain buyer to appreciate them. …

Do’s and Don’ts with Credit During the Home Buying Process

When buying your next home, changes to your credit (additional accounts, closing accounts, fluctuating credit card balances) can result in the lowering of your credit score. If your credit score changes, that can affect your interest rate and even the loan approval itself. Therefore, it is imperative that there are no major changes to your credit and information provided, during this process. In order for your loan to reach final approval and fund, you’ll want to adhere to the following: DO NOT charge any new items on your charge cards (higher balances will lower credit scores). DO NOT apply for …

Who Is Going To Write These Loans?

The mortgage industry has seen much blood shed in the last 2 years, particularly in the last year.  After reading a very interesting magazine article, I began to think about the future…the eminent future and a big question arose, “Who the heck is going to write these loans”?  What is the MN Mortgage Mom rambling about now?  Well, let me take a step back a few years first. In the early to mid-2000’s, loan officers were a dime a dozen.  We were in offices, working out of our garages and in the comforts of our living rooms.  We were dressed in …

Fannie Mae Guideline Changes – Gifts, 97% Financing and Mortgage Insurance

There has been some recent excitement about Fannie Mae (FNMA) changing her guidelines on down payments and allowing gift funds as an acceptable form of down payment in lieu of a borrower’s own funds. Before we all get excited about FNMA getting a little FHA in her with respect to gift funds, we need to realize that the guidelines for mortgage insurance and FNMA are not aligned. So long as they aren’t, this change will only have minimal effect. This chart outlines the new accepted forms of down payment from FNMA’s perspective: Here’s the Fannie definition of acceptable donors for …

It’s High Noon on Shadow Inventory as Banks Halt Foreclosures

So Ally’s GMAC, Bank of America and J.P. Morgan Chase are halting foreclosures in 23 states. More importantly, Fannie Mae and Freddie Mac have stepped in to outline correct foreclosure processes and are demanding lenders adhere to them. What’s more, many more lenders are sure to follow the big 3’s changes. That’s great but what does it mean for us?

Unsolicited Advice for a Loan Officer’s Evolution – Learn to Underwrite

Since mid 2007, the mortgage originator as we know it has ceased to be. The requirements for technical knowledge, industry awareness and precision have skyrocketed to the extent that a modern day loan originator is more of an “Under-iginator.”He/she must be 50% loan officer, 15% customer service/sales rep, 5% appraisal reviewer and 30% underwriter to have any business talking to a customer about a mortgage. As well, the role of a processor has too changed. Some repetition-based duties have been replaced with technological automation. While those responsibilities have gone to the wayside, the secondary mortgage market has forced the job …