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MCA Monthly Update
February 2010
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Lending Manuals
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Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, our newsletters contain underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.
MCA will be offering free monthly webinars to answer your compliance questions. February’s webinar will be about the new Good Faith Estimate.
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Get answers to your questions about the new GFE.
Join our free webinar on Thursday, Feburary 18 at 12:00 pm MST.
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We will be emailing invitations Friday 2/5/2010. If you are interested in joining the webinar, click the link in Friday’s invitation to register. If you do not receive an invitation but would like to join, please reply to this email, or email: info@mortgagecomplianceadvisors.com.
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There has been a lot of information about the new GFE, and we want to help you make sense of it all. Send us your questions and our professionals will answer the top five. Any questions that are not addressed in the call will be answered in next month’s newsletter.
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If you have any questions, simply reply to this email or call us at 877-226-3216.
For real time compliance news, you can now follow us on Twitter and Facebook.
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| Underwriting & Processing Tips |
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Early Payment Defaults (EPDs)
Don’t forget that for FHA files, you need to audit 100% of your EPDs:
“In addition to the loans selected for routine quality control reviews, mortgagees must review all loans going into default within the first six payments. As defined here, early payment defaults are loans that become 60 days past due.” (See HUD 4060.1 7-6 (D))
Furthermore, in HUD’s ML 10-03, HUD announced its authority to terminate DE underwriting authority if a mortgagee has particularly high default and claim rates.
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24 Month Period Ending Date
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Termination Threshold
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December 31, 2009
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300%
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June 30, 2010
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250%
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December 31, 2010
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200%
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*Make sure your compare ratio of defaults is below the termination threshold. You can check your compare ratio on HUD’s Neighborhood Watch.
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| FHA Update |
- Announces FHA policy changes:
- Increases mortgage insurance premium (MIP)
- Updates FICO scores and down payments
- Reduces allowable seller concessions from 6% to 3%
- Increases enforcement on FHA lenders
View the entire press release
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- Extends FHA’s authority to terminate DE underwriting authority in areas where the lender has a high rate of early defaults and claims. View the entire letter
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- Provides guidance on how to assist borrowers facing imminent default. “At this time FHA is limiting the loss mitigation options that may be used…to forbearance and FHA-HAMP.” View the entire letter
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ML 10-05: Announcement of the FHA Nonprofit Data Management System
– Announces newly developed Nonprofit Data Management Systems (NPDMS).
- “Effective immediately…organizations participating in OSFH programs will be required to use NPDMS to initiate and manage their FHA activities…” View the entire letter
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To view all HUD Mortgagee Letters for the year, visit HUD’s website.
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*We offer FHA, VA, and HECM reference manuals with regulations and policies updated quarterly. For more information, visit our website or call 877-226-3216.
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| Freddie Mac Update |
Bulletin 2010-1: Home Affordable Modification Program
- Announces changes to HAMP, mandates use of newly introduced Imminent Default Indicator (effective March 1, 2010), revises imminent default requirements, etc. View the entire bulletin
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Bulletin 2010-2: FHA-Approved Project Review for Condominiums
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- Revises guide so that “Sellers may only use FHA Condominium Project approval to determine that Mortgages secured by units in Condominium Projects are eligible for sale to Freddie Mac for the following Mortgage types:
- FHA Mortgages
- VA Mortgages
- Section 502 Guaranteed Rural Housing (GRH) Mortgages
- HUD Guaranteed Section 184 Native American Mortgages”
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| VA Update |
Circular 26-10-01
- Provides guidance on fees and charges, in response to new RESPA rule. Also announces new documentation requirements and elimination of a previously required disclosure statement. View the entire circular
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- Provides instructions for modifying VA loans in accordance with the Making Home Affordable (MHA) program. Effective 2/1/10. View the entire circular
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To view VA Circulars/News for 2010, visit the VA website.
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Feel free to call us with any questions at 877-226-3216.
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