-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
1/19
Recent Changes in The Mortgage Industry
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
2/19
HVCCHVCC (Home Valuation Code of Conduct)(Home Valuation Code of Conduct)
MDIAMDIA (Mortgage Disclosure Improvement Act)(Mortgage Disclosure Improvement Act)
FHA Condo ApprovalsFHA Condo Approvals FNMA Condo ApprovalsFNMA Condo Approvals
New GFE/RESPA ReformNew GFE/RESPA Reform
Good Funds Statute (IL only)Good Funds Statute (IL only)
Topics
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
3/19
HVCCHVCC(Home Valuation Code of Conduct(Home Valuation Code of Conduct-- Effective 5/1/09)Effective 5/1/09)
HVCC
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
4/19
Appraisals must be ordered through an independentAppraisals must be ordered through an independentappraisal company or department.appraisal company or department.
On appraisal orders, or value disputes, the loanOn appraisal orders, or value disputes, the loan
officer can contact the appraiser directly.officer can contact the appraiser directly. Additional comps can be provided for valueAdditional comps can be provided for value
rebuttals, but they must be provided thru therebuttals, but they must be provided thru theappraisal desk.appraisal desk.
Borrower(s) must be provided with a copy of theBorrower(s) must be provided with a copy of theappraisal at least 3 business days before closing.appraisal at least 3 business days before closing.
HVCC
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
5/19
3 closed comps within 90 days required.3 closed comps within 90 days required.
If no comps are available within 90 days, then comps withinIf no comps are available within 90 days, then comps within6 months can be used with a time adjustment for value.6 months can be used with a time adjustment for value.
Comps need to be within mile radius of subject property,Comps need to be within mile radius of subject property,and for condos, one comp from subject project is required.and for condos, one comp from subject project is required.
1 active listing, and 1 pending sale are required.1 active listing, and 1 pending sale are required.
Be aware that foreclosure sales are used as comps, and canBe aware that foreclosure sales are used as comps, and can
impact value.impact value.
Appraisal criteria in
todays market
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
6/19
MDIAMDIA(Mortgage Disclosure Improvement Act(Mortgage Disclosure Improvement Act Effective 7/30/09)Effective 7/30/09)
MDIA
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
7/19
Upfront fees can not be collected by the lender until initialUpfront fees can not be collected by the lender until initialdisclosuresdisclosures are receivedare received by borrower(s).by borrower(s).
Change in Annual Percentage Rate (APR) by more thanChange in Annual Percentage Rate (APR) by more than.125% will require the lender to send a revised Truth in.125% will require the lender to send a revised Truth inLending (TIL) disclosure to the borrower(s) at least 3Lending (TIL) disclosure to the borrower(s) at least 3business days prior to closing> Written verification of receiptbusiness days prior to closing> Written verification of receiptmust be in the file.must be in the file.
Closing date must be a minimum of 7 business days fromClosing date must be a minimum of 7 business days fromdate disclosuresdate disclosures are sentare sent to borrower(s). Signing can occurto borrower(s). Signing can occuron the 7on the 7thth business day)business day)
MDIA
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
8/19
WHATCAN IMPACTTHEAPR?WHATCAN IMPACTTHEAPR?
Any changes to the rateAny changes to the rate
Change in the loan amountChange in the loan amount Product changeProduct change
Change in closing dateChange in closing date
Changes to fees, inclusive of settlement agent feesChanges to fees, inclusive of settlement agent fees
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
9/19
FHA Condo Approval ChangesFHA Condo Approval Changes
on o pprova s
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
10/19
Effective February 1st, 2010 FHA will be eliminating
the Spot Loan approval process.
Lenders will have (2) condo approval options:(1) HUD Review Approval Process (HRAP)
(2) Direct Endorsement Approval Process (DELRAP)
*** Guaranteed Rate offers the DELRAP method,
meaning we have a dedicated & qualified staff for
reviewing and approving Condo projects ***
on o
Approvals
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
11/19
FANNIE MAE CONDO
APPROVALS
FNMACondos
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
12/19
All condo projects will require approval through
Fannie Mae Project Approval (CPM)
Lenders are requiring full approval on newconstruction, conversions, and existing condos
Full Review consists of Appraisal, Decs, By-laws,
Budget, Questionnaire, Insurance, Architect or
Engineers report (for Conversions)
FANNIEMAECONDO
APPROVALS
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
13/19
General Requirements for Condo Approval 70% of the projects units must be sold or under contract
70% of the projects units must be conveyed to owner
occupant principle residence or second home purchases
1 entity can not own more than 10% of the condo project
More than 15% of the condo fee payments can be 2 or moremonths delinquent.
Reserves must be 10% of the operating income
FANNIEMAECONDO
APPROVALS
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
14/19
General Requirements for Condo Approval
If 20% of the total square footage is commercial space, then
the property will not be approved by Fannie Mae
All common elements must be 100% complete, and noadditional phasing can take place.
No pending litigation
FANNIEMAECONDO
APPROVALS
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
15/19
If Pending Litigation, The Following is Needed: Copy of the law suit
Letter from the homeowners association attorney explaining
the lawsuit A time frame for resolution for the law suit
Notation if the master liability insurance coverage issufficient to cover potential losses
Letter must state estimate of the amount of the HOA will
need to pay in special assessments*** Supplying this documentation does not guarantee approval ***
FANNIEMAECONDO
APPROVALS
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
16/19
NEW GFE RULESNEW GFE RULES
GFE must be disclosed within 3 days once an Application is takenGFE must be disclosed within 3 days once an Application is taken
An Application is defined by: Name, SS#, Income, Property Address,An Application is defined by: Name, SS#, Income, Property Address,Loan amount, Purchase price or Appraised valueLoan amount, Purchase price or Appraised value
New GFE is 3 pages long but does not include and estimate of fundsNew GFE is 3 pages long but does not include and estimate of fundsdue at closingdue at closing
3 different buckets for estimated costs and the variance by which3 different buckets for estimated costs and the variance by whichthey can tolerably changethey can tolerably change
Buyer must receive a Service Provider list with vendors from localBuyer must receive a Service Provider list with vendors from localmarketmarket
If buyer selects a Service Provider listed, Guaranteed Rate is boundIf buyer selects a Service Provider listed, Guaranteed Rate is boundto the fees estimated and must cure the difference paid by buyersto the fees estimated and must cure the difference paid by buyerswithin 30 dayswithin 30 days
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
17/19
Good Funds StatuteGood Funds Statute
Good Funds statute will change the procedure for submitting fundsGood Funds statute will change the procedure for submitting fundsto a title insurance company/agent/to a title insurance company/agent/escroweeescrowee for a real estate closingfor a real estate closing
Any funds in the aggregate amount of $50,000 or more received fromAny funds in the aggregate amount of $50,000 or more received fromany single party to the transaction must be Good Funds or Collectedany single party to the transaction must be Good Funds or CollectedFundsFunds
*** Title companies are interpreting this in various ways ****** Title companies are interpreting this in various ways ***
Good Funds = Wired funds to the fiduciary trust account of titleGood Funds = Wired funds to the fiduciary trust account of titleinsuranceinsurance
Funds < $50,000 must also be Good Funds, i.e. Cashiers checks,Funds < $50,000 must also be Good Funds, i.e. Cashiers checks,certified checks, bank money orders, official bank checks, or tellerscertified checks, bank money orders, official bank checks, or tellerschecks from a chartered financial institutionchecks from a chartered financial institution
Purchase orPurchase or RefiRefi: A personal check or checks in an aggregate amount: A personal check or checks in an aggregate amountnot exceeding $5,000 per closingnot exceeding $5,000 per closing
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
18/19
Plan for no less than a 30 day close
Try and lock loan at least 10 days prior to close
Understand that any change in mortgage product could impact the APR,and therefore the close date
Provide the settlement agent info to the lender as early in the process aspossible
It is critical that any third party fees that impact the APR are accurate(.125% change requires re-disclosure)
Allow for a longer Mortgage Contingency period to avoid extensions
Prepare clients putting down more than $50k (including earnest money)that theyll need to wire funds to the Title co prior to closing
How Do These Changes
Impact The Realtor and
Home Buyer / Seller?
-
8/9/2019 @properties State of the Lending Market Presentation - via Guaranteed Rate Mortgage
19/19
QUESTIONS?