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Feb
04
2010

MCA Monthly Update – February 2010

MCA Logo

MCA Monthly Update
February 2010
In This Issue
Underwriting & Processing Tips
FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links
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Lending Manuals
Stay Updated
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Join Our Mailing List!

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.

Making sense of the new GFE

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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.
Underwriting & Processing Tips
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.

24 Month Period Ending Date

Termination Threshold

December 31, 2009

300%

June 30, 2010

250%

December 31, 2010

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.

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 special authority granted in ML 09-20 (Processing Pre-Application Firm Invitation and Firm Commitment Extension Requests) to January 11, 2011. View the entire letter

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ML 10-02: Increase in Upfront Premiums for FHA Mortgage Insurance

- Increases mortgage insurance premium to 2.25%. Effective for case numbers assigned on or after April 5, 2010. View the entire letter

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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.

Fannie Mae Update

LL-2010-01: Special Approval Designation for Established Florida Condominium Projects

- Implements a new “Special Approval” designation for condominium projects located in Florida.  View the entire announcement

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- Updates reporting and reconciliation requirements for reverse mortgages. Also sets fines for non-compliance of reporting. View the entire announcement

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SVC-2010-02: Update to Imminent Default Guidance for Mortgage Loans Evaluated for the Home Affordable Modification Program

- Introduces use of Imminent Default Indicator, requires use of verified income documentation before entering borrower into a trial period plan, changes max cash reserves allowed.

- Also requires imminent default evaluation for all borrowers that are either current or in default but less than 60 days delinquent.

View the entire announcement

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To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae’s website.
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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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
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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Circular 26-09-17, Change 1

- Extends rescission date of Circular 26-09-17 (Interim Process for Pre-Approval of Loan Modifications on Current Loans) from January 1, 2012 to January 1, 2014.  View the change

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- Extends rescission date of Circular 26-08-3 (Processing Transfers of Ownership Under VALERI) from January 1, 2010 to January 1, 2012.   View the change

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To view VA Circulars/News for 2010, visit the VA website.
Feel free to call us with any questions at 877-226-3216.
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Jan
07
2010

MCA Monthly Update – January 2010

MCA Logo
MCA Monthly Update
January 2010 
 
In This Issue
Underwriting & Processing Tips
FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links
 
 
 
 
 
Stay Updated

Twitter  

Facebook  

LinkedIn  
Join Our Mailing List!
 
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 has a new website!
 
Visit our newly redesigned website to find upcoming regulation deadlines, the latest compliance news, updated FAQs, and other helpful resources.
 
 Screenshot of MCA's New Website
 
 
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.
Underwriting & Processing Tips
 
1. The new RESPA regulations went into full effect 1/1/10. Visit HUD’s useful website for RESPA information. Some topics include:
 

2. “If a GFE is issued on the old form prior to January 1, 2010, then the old HUD-1 form must be used even if closing will occur after January 1, 2010. For GFEs issued on the old form, the loan originator has the option to reissue the GFE (with the same terms and charges) on the new form, in which case the settlement agent must complete the new HUD-1 form.” (from HUD’s FAQs for RESPA)  

3. A good practice is to make sure that your file always includes an underwriting loan approval from the lender.
 
4. To allow us to provide you with a quality audit, your submissions should contain the following:
 
  • Initial disclosures and application  
  • Credit, income and asset documentation (if applicable)
  • Signed underwriting package
  • Closing package (Collateral documents) 
  • *If possible, purge file of duplicates
 
FHA Update
 
 
- HUD proposes minimum standards that states must meet to comply with SAFE Act in licensing loan originators.  View the entire press release 
 
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 - Letter from the FHA Commissioner, which contains brief Q & A about recent policy changes, including FHA approval process and RESPA.  View the entire letter 
 
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- Provides guidance for borrower eligibility for short sales and short payoffs. Effective immediately.  View the entire letter 
 
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- Contains the latest updated version of Chapter 6 (Special Underwriting) of HUD Handbook 4155.1.  View the entire chapter
 
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- Contains the latest updated version of Chapter 4 (Property Valuation and Appraisals) of HUD Handbook 4155.2.  View the entire chapter 
 
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- Clarifies how fees must be disclosed on the new GFE and HUD-1, consistent with the RESPA changes.  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. 
 
Fannie Mae Update 
 Ann. 09-36: Updates to the Home Affordable Modification Program…  

- Updates HAMP, including requirements for tax returns, income documentation, and title endorsement and recordation. Effective date is 1/1/10.  View the entire announcement  

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- Updates policies for FHA-approved condo projects, credit score versions, DU Refi Plus and Refi Plus, etc.  View the entire announcement
 
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- Contains several updates and clarifications for various servicing policies, such as temporary review period for HAMP Trial Modifications, Risk Profiler, Quality Assurance Reviews for Acquired Properties, etc.  View the entire announcement  
 
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To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae’s website.
 
Freddie Mac Update 

 

Bulletin 2009-28: Home Affordable Modification Program 

- Provides information about the Treasury’s Mortgage Modification Conversion Drive, announces changes to HAMP, and changes capitalization threshold on all mortgages being modified. Effective immediately.  View the entire bulletin
 
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To view 2009 Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
 
VA Update 

 
 
- Extends rescission date of Circular 26-07-03 from 1/1/09 to 1/1/14.  View the entire circular

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To view VA Circulars/News from 2009, visit the VA website.

 
 

 Get reference manuals for FHA, VA, and HECM.

Feel free to call us with any questions at 877-226-3216.

 
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Dec
15
2009

MCA Monthly Update – December 2009

MCA Logo

MCA Monthly Update
December 2009 
 
In This Issue
Underwriting & Processing Tips
FHA Update
Fannie Mae Update
Freddie Mac Update
Quick Links
Stay Updated
Join Our Mailing List!
 
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. 
 
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.
Underwriting & Processing Tips
 
Based on some common findings from quality control audits, we have compiled a list of five tips from the month of November.
 
1. Remember that the effective date on the HVCC disclosure(conventional loans only) is 5/1/09.
 
2. Make sure to disclose fees correctly on the GFE. Also make sure that fees are itemized correctly to ensure accurate APR disclosure.
 
3. Remember that initial disclosures must be signed within three business days of initial application date, or an initial disclosure letter must be evident in the file showing that the disclosures were sent to the borrower within three business days.
 
4. The final signed underwriting and closing packages should be obtained from the lender and retained in the file.
 
5. As of 7/30/09, the initial and final TIL must contain the verbiage, “You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.”
 
FHA Update
 
PR 09-215: HUD Announces Restraint in RESPA Enforcement for First Four Months of New Rule
 

 - HUD will exercise restraint in RESPA enforcement for the first four months, for lenders who are showing a good faith effort to comply with the new RESPA requirements. The new RESPA requirements are due to take full effect January 1, 2010. View the entire press release 

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PR 09-216: FHA Proposes New Rules to Strengthen Risk Management
 
Two main parts of proposed rule:
 
 - Strengthen and Streamline Lender Approval. “While loan correspondents (mortgage brokers) will continue to be able to originate FHA-insured loans through their relationships with approved mortgagees, they will no longer receive independent approval for origination eligibility.”
 
- Strengthen the Capacity of FHA-Approved Mortgagees. Mortgagees must “maintain a minimum of $1 million in net worth within the first year and at least $2.5 million of net worth within three years of the effective date of the rule.” View the entire press release
 
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PR 09-218: HUD Announces New RESPA Outreach Campaign
 
- Announces series of live online presentations to explore RESPA’s new requirements. View the entire press release
  
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 ML 09-46b: Condominium Approval Process for Single Family Housing

 - Replaces ML 09-19, which implements new approval process for condominium projects. Effective for case numbers assigned on or after December 7, 2009. View the entire letter
 

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ML 09-46a: Temporary Guidance for Condominium Policy
 
- Waives five provisions of ML 09-46b and provides temporary guidance for condominium project eligibility, for case numbers assigned on or after December 7, 2009 through December 31, 2010. View the entire letter
 
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ML 09-47: Home Equity Conversion Mortgage (HECM) Counseling Standardization and Roster Final Rule 
 
- Provides guidance to counselors and lenders regarding the HECM Counselor Roster final regulation, which establishes:
 
  • Testing standards to qualify individuals as HECM counselors eligible to provide HECM counseling, and
  • A roster of eligible HECM counselors View the entire letter 

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ML 09-48: Second Appraisal Reporting Requirements

- Eliminates need for a second appraisal on high balance loans in declining markets. Effective immediately. View the entire letter
 
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ML 09-49: Home Equity Conversion Mortgage Program: Subordinate Liens 
 

- Addresses FHA requirements for secured subordinate financing under the HECM Program. View the entire letter  

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ML 09-50: 2010 FHA Maximum Loan Limits
 
- Discusses maximum loan limits for 2010. Conforming limit and FHA floor remain the same as in 2009. View the entire letter
  
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ML 09-51: Adoption of the Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005)

- FHA adopts Appraisal Update and/or Completion Report. Effective for case number assignments on/after 1/1/10. 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. 
Fannie Mae Update 
 
Ann. 09-34: Confirmation of Conventional Loan Limits for 2010
  
- General loan limits for 2010 remain unchanged from 2009. View the entire announcement
  
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Notice, dated 11/20/09: Form Updates: Revisions to Forms 1013, 1014, and 1072

- Revises Forms 1013, 1014, and 1072. Effective date to use updated forms is 1/1/10. View the entire notice
 
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Ann. 09-35: Updates to the Home Affordable Modification Program – MBS Mortgage Loans

- Announces updates to policies for reclassification and removal of MBS mortgage loans from MBS pools. View the entire announcement
 
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To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae’s website.  
Freddie Mac Update 
 
Bulletin 2009-27: Loan Limits, Origination Data and Credit 
 
 - Announces 2010 loan limits. Temporary loan limits in designated high-cost areas and base conforming loan limits remain at 2009 levels.  View the entire bulletin
 
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To view 2009 Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
Get reference manuals for FHA, VA, and HECM.

 
Feel free to call us with any questions, at 877-226-3216. 
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Nov
16
2009

Quality Control Guidelines Summarized for Fannie Mae, Freddie Mac, and FHA

Many investors and agencies, such as Fannie Mae, Freddie Mac, and FHA, require its lenders to have an active quality control plan in place. We wanted to help make the regulations more understandable for you, so we published an article summarizing basic quality control guidelines for Fannie Mae, Freddie Mac, and FHA. We hope you find the information useful — and we are always happy to answer your questions.

Read the full article summarizing QC guidelines for Fannie Mae, Freddi Mac, and FHA.

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