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Sep
02
2010

MCA Monthly Compliance Update – September 2010

MCA Logo
Picture of autumn leaves
MCA Monthly Update
September 2010
In This Issue
Federal Reserve’s Final Rules
Webinar Q & A
HUD/FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links

Lending Manuals
Stay Updated
Connect with us:

View our profile on LinkedIn Follow us on Twitter Find us on Facebook
Join Our Mailing List!

Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

Join our free monthly webinar “Revisiting the GFE: How to Resolve Common Findings.”


We have posted the slides from last month’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.



Webinar

An in depth review of the  GFE and how to prevent common errors.



Join our webinar on Thursday, September 23 at 12:00 p.m. MDT.


Reserve your webinar seat now at:

Register Now





We continue to see GFE mistakes as one of the top findings in the quality control audits we perform. As a result of these continued findings, we felt further training on the GFE would be helpful. We will conduct an in-depth review of correctly completing the GFE. In addition, we will review the most common GFE mistakes we find and discuss how to proactively prevent these mistakes from occurring.



We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on Twitter and Facebook.


Federal Reserve’s Final Rules


The Federal Reserve published final rules to protect mortgage borrowers from various unfair practices that can arise from originator compensation practices. The rules go into effect April 1, 2011. Some of these changes include:


- Prohibiting payments to the loan originator that are based on the loan’s interest rate or other terms.
- Prohibiting a mortgage broker or loan officer from receiving payments directly from a consumer while also receiving compensation from the creditor or another person…


You can read the Federal Reserve’s press release here, which includes attachments to the highlights and the actual final rule.

Webinar Questions and Answers


We want to thank everyone who attended our webinar: “Understanding How the LQI Affects You.” As promised, we have posted the slides and answers to the questions asked.


We have included the first three questions below. *Please visit our website to read all the questions and answers.


Question 1 – We are a lender who funds our own loans and sells them to investors after closing.  Should the Pre funding audit take place PRIOR to closing and us funding the loan at the closing table or should that take place after closing prior to shipping to an investor?

  • Answer – The pre-funding audit can really occur at any time in the process. However, pre-funding is the best time, as you will have all the signed final documents to review. If you were to review the file prior to closing, you would be missing critical documents to review. While there are no rules against pre-closing audits, we do not recommend it.


Question 2 - Are SSA-89 the SSN validation required by FNMA or only if there are inconsistencies and flags?


Question 3 – We utilize a Mortgage Lock in Agreement as our intent to proceed.  Does this seem sufficient to you, or do you recommend some other means of intent?

  • Answer – HUD/RESPA does not give specific guidance on how to comply with this rule. However, MCA recommends a separate specific disclosure to make sure there are no questions regarding your borrower’s intentions.
HUD/FHA Update


- Provides guidance regarding enhancements to FHA’s refinance program for underwater borrowers. View the entire letter


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- Eliminates unlimited CLTV ratio and returns FHA to its former CLTV limit for case numbers assigned on or after September 7, 2010. View the entire letter


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- Provides processing instructions and guidance to issue Mortgage Insurance for refinancing Cooperative Housing Projects under Section 207 pursuant to Section 223 (f) of the National Housing Act. View the entire letter


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- For Multifamily Mortgagees: Provides guidance on ML 08-19 regarding deferring submission of final architectural plans… View the entire letter


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- For Multifamily Mortgagees: Renews policy for eligibility of projects where construction has started. View the entire letter


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- Raises annual FHA premium and lowers upfront premium, except for HECMs. Effective for case numbers assigned on or after October 4, 2010. View the entire letter


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- Introduces new minimum credit scores and LTV ratio requirements for FHA loans. Effective for case numbers assigned on or after October 4, 2010. View the entire letter


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To view all HUD Mortgagee Letters for the year, visit HUD’s website.
Fannie Mae Update


- Updates the Selling Guide regarding the following topics:


  • Mortgage loans secured by properties subject to unexpired redemption periods
  • Delivery of repurchased loans
  • General warranty of project eligibility
  • Seasoned mortgage loan requirements
  • Co-op share loan documentation
  • Termination of inactive document custodians
  • Title Insurance ALTA Endorsement 21-06
  • Miscellaneous Selling Guide updates


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- Updates requirements for undisclosed liabilities and re-underwriting.

  • Also clarifies that lender is not required to obtain a new credit report to verify additional debt.


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- Identifies “Unique Hardships” that warrant use of relief provisions for borrowers impacted by unusual circumstances that create financial hardship.  View the entire announcement


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- Announces new requirements for lenders regarding borrowers who obtained Property Assessed Clean Energy (PACE) loans before July 6, 2010.  View the entire announcement


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- Revises foreclosure time frames for FL, MD, NV, and NY. Fannie Mae also reserves right to impose compensatory fees for breach of servicing obligations.  View the entire announcement


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- Announces that servicers must assign delinquent Florida mortgages to a FNMA attorney for mediation before initiating foreclosure proceedings.  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


- Makes changes to selling requirements, including providing guidance on 2010 median income changes, revising underwriting requirements regarding inquiries on borrower’s credit report, etc. View the entire bulletin


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- Provides guidance regarding Freddie Mac’s purchase of mortgages with a Property Assessed Clean Energy (PACE) obligation. View the entire bulletin


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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
VA Update


- Clarifies that breakout of charges should be attached to HUD-1, not on HUD-1 itself. View the entire change


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To view VA Circular/News for 2010, visit the VA website.

Feel free to call us with any questions at 877-226-3216.
No Comments »
Jul
09
2010

MCA Monthly Compliance Update – July 2010

MCA Logo

MCA Monthly Update

July 2010
In This Issue
Webinar Q & A
HUD/FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links
.
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Lending Manuals

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Stay Updated
Connect with us:

View our profile on LinkedIn Follow us on Twitter Find us on Facebook

Join Our Mailing List!

Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

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Join our free monthly webinar “Understanding How The LQI Affects You.”
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We have posted the slides from June’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.

LQI Webinar

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Learn about implications and timelines from Fannie Mae’s Loan Quality Initiative.

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Join our webinar on Thursday, July 22 at
12:00 pm MDT.

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Reserve your webinar seat now at:

Register Now

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Join our free webinar on July 22 for an in-depth discussion of Fannie Mae’s Loan Quality Initiative (LQI), including an overview of how it will affect brokers, lenders, wholesalers, and banks. Learn more about its implications and timelines, and ask our professionals your LQI questions.

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*Don’t forget that many Lender Quality Control Updates from the LQI became effective July 1, 2010.

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We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on Twitter and Facebook.
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Webinar Questions and Answers
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We want to thank everyone who attended our webinar: “Common Compliance Findings and How to Prevent Them.” As promised, we have posted the slides and answers to the questions asked.
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We have included the first three questions below. *Please visit our website to read all 17 questions and answers.
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Question 1 – If we purchased a QC manual from MCA, are updates available for new laws?

  • Answer - Yes, MCA does offer updates to your Quality Control Plan. You can contact us at your convenience so that we can discuss the specifics of your plan.

    • .

Question 2 – Do you have a suggestion on how much time before closing we should pull the FNMA comparison report?

  • Answer – If you are referring to the re-pulling of credit to check for undisclosed liabilities, we suggest you pull this as close to closing as possible.

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Question 3 – What is an example of proof of receipt?

  • Answer – An example of proof of receipt would be a confirmation email, delivery receipt, fax confirmation, etc. (See slide 32)

    • .

Question 4 – How do you address a GFE issued as a lender and a subsequent submission as a broker?  One will have YSP and one will not, and investors fees are different.  Can you give guidance on this when we are submitting to 2 different avenues?

  • Answer – Once you provide the GFE, you cannot change the amount in block 1. This includes your investor fees. However, when you lock the loan, you will then be required to state the credit (YSP) to the borrower.
HUD/FHA Update

- Provides overview of key provisions and guidance on implementation of Final Rule. View the entire letter

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- Revises underwriting policies for FHA Multifamily programs.  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

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- Servicers may request reimbursement for HOPE NOW Alliance counseled cases that were initiated on and after 7/1/10 through 6/30/11. View the entire notice
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- Under certain conditions, Fannie Mae will purchase mortgage loans secured by properties located in Special Flood Hazard Areas that do not have an active flood insurance policy. View the entire letter
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(*On July 2, the NFIP was extended through September 30, 2010.)
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- Removes 5 year option for borrowers with prior foreclosure, so that all borrowers must meet 7 year waiting period. Also updates eligibility requirements for borrowers with extenuating circumstances.  View the entire announcement
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-  ”Effective for all standard Fannie Mae mortgage loan modification solicitation offers on or after July 15, 2010, servicers must verify income, liabilities, and monthly expenses for all borrowers prior to granting a permanent standard Fannie Mae mortgage modification.” View the entire announcement
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Describes the following:

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- Appraisal-related policies that update the Selling Guide

  • Inclusion of interior photographs in the appraisal report
  • Lender changes to the appraised value and guidance on addressing appraisal deficiencies
  • Appraiser selection criteria
  • Sources of comparable market data
  • Selection of comparable sales
  • Communication under the HVCC
  • Seller concessions
  • Treatment of personal property
  • Market Conditions Addendum to the Appraisal Report (Form 1004MC)

- Miscellaneous appraisal-related guidance (no impact on the Selling Guide)

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- Miscellaneous Selling Guide updates

- Updates to Special Feature Codes

- Updates to Mortgage Insurance Codes

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To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae’s website.
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Freddie Mac Update

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- Amends Guide related to PUDs, Relief Refinance Mortgages, interested party contributions. View the entire bulletin
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- Revises certain eligibility, solicitation and reporting requirements for HAMP Backup Modifications. Also revises settlement timeline…  View the entire bulletin

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-  Provides guidance and forbearance options for problem drywall. View the entire letter
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-  Announces publication of Freddie Mac Implementation Guide for Loan Delivery Data. Requirements effective for all loans delivered to Freddie Mac on or after September 1, 2011. View the entire letter
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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
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VA Update

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- Describes measures VA urges mortgage servicers to employ in providing relief to distressed borrowers affected by Gulf Oil Crisis. View the entire circular
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To view VA Circular/News for 2010, visit the VA website.
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Feel free to call us with any questions at 877-226-3216.
No Comments »
May
07
2010

MCA Monthly Update – May 2010

MCA Logo

MCA Monthly Update
May 2010

In This Issue
Underwriting & Processing Tips
HUD/FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links

Lending Manuals
Stay Updated
Connect with us:
View our profile on LinkedIn Follow us on Twitter Find us on Facebook
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.

Join our free monthly webinar “Red Flags of Fraud.”
We have posted the slides from April’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.

Red Flags of Fraud Webinar

Be prepared for the FTC’s Red Flags Rule effective 6/1/10, and recognize the red flags of mortgage fraud.

Join our webinar on Thursday, May 20 at
12:00 pm MDT.
Reserve your webinar seat now at:
Register Now



Don’t allow yourself to become a victim of mortgage fraud. Join us for our free “Red Flags of Fraud” Webinar hosted May 20th, where we will be providing you the tools you need to recognize the red flags of mortgage loan fraud. We will also provide invaluable information on the Federal Trade Commission’s Red Flag Policy effective June 1, 2010. This is a webinar you can’t afford to miss!

We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on Twitter and Facebook.

Underwriting & Processing Tips

*Don’t forget that the FTC’s Red Flags Rule enforcement date is June 1, 2010.

We want to thank everyone who attended our webinar: “Managing Your Early Payment Default Risk.” As promised, we have posted the slides and answers to the questions asked.

We have included the first three questions below. *Please visit our website to read all the questions and answers.



Question 1 – HUD just eliminated the Correspondent level of FHA approval.  Will only DE’s apply to market watch?

  • Answer – The market watch will now (once the regulation takes effect) only apply to the Sponsor (DE) lender. HUD no longer puts out a market watch list; however, they still do keep track of the lenders (sponsors) they have concerns about.


Question 2 – Are there other reports besides the Neighborhood watch, we the lender need to be reviewing?

  • Answer – Outside of Neighborhood Watch, we suggest you practice effective communication with your lenders to determine how the loans you originate are performing.


Question 3 – A.) Is Sponsor responsible for tracking and if so How do they find out about EPD’s for 100% review, or  B.) Is the investor responsible for reviewing the loan they purchased?

  • Answer – The Sponsor is responsible for finding out about the EPD through Neighborhood Watch HUD  website. The investor is not the one that would be responsible to HUD for the EPD.
HUD/FHA Update

HUD published the Final Rule on April 20. HUD has implemented some changes to strengthen its risk management through its approved FHA-approved lenders. There are many changes, but we wanted to make special note of three.


1. Increasing Net Worth Requirements.  HUD has increased the net worth requirements for current FHA-approved mortgagees and applicants from $250,000 to $2.5 million over a three year period… Click here to read the full article




View the entire rule in the Federal Register

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- Announces that FHA will accept electronic signatures on third party documents.  View the entire letter


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ML 10-15: FHA Case Number and FHA Roster Appraiser Assignments

- Provides guidance on ordering FHA case numbers and selecting FHA Roster appraisers. View the entire letter

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- Describes FHA’s centralizing of mortgagee compliance under one contractor.
View the entire letter

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- Announces that HUD “will only order a lead-based paint evaluation for HUD REO properties constructed before 1978, and purchased with FHA-insured financing.” Effective date June 1, 2010. 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


- Adjusts underwriting criteria for borrowers who have experienced a prior “preforeclosure event.” Reduces waiting period. View the entire letter


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- Updates two sections of the Servicing Guide: Part VII “Delinquency Management and Default Prevention” and Part VIII “Foreclosures, Conveyances and Claims, and Acquired Properties.” View the entire announcement


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- The Selling Guide is being updated to include changes to the following topics:

  • ARM qualifying rate
  • Interest-only eligibility requirements
  • Retirement of balloon mortgage loans as a standard product
  • Prior preforeclosure sale or deed-in-lieu of foreclosure
  • Multiple financed properties
  • Miscellaneous updates and clarifications
  • Loan-Level Price Adjustment (LLPA) Matrix and Adverse Market Delivery Charge (AMDC) Information

View the entire announcement

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-  Property Assessed Clean Energy (PACE) loans “generally have automatic first lien priority over previously recorded mortgages. The terms of the Fannie Mae/Freddie Mac Uniform Security Instruments prohibit loans that have senior lien status to a mortgage…” 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


- Amends both selling and servicing requirements, such as max LTV for Rural Housing, revised requirements for Servicing Released Sales Process (effective May 1, 2010), etc.  View the entire bulletin


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- Announces new Reimbursement System for submitting expense reimbursement requests.  View the entire bulletin


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-  Reminds “Seller/Servicers that an energy-related lien may not be senior to any Mortgage delivered to Freddie Mac. Seller/Servicers should determine whether a state or locality in which they originate mortgages has an energy loan program, and whether a first priority lien is permitted…” View the entire announcement


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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
VA Update


- Extends rescission date of Circular 26-08-8 to October 1, 2011.  View the entire change


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- Extends rescission date of Circular 26-08-14 to January 1, 2012.  View the entire change



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

No Comments »
Mar
04
2010

MCA Monthly Update – March 2010

MCA Logo

MCA Monthly Update
March 2010
In This Issue
Underwriting & Processing Tips
FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Quick Links

Lending Manuals
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.

MCA now offers compliance services to help you verify income, compliance, and identity.

  • 4506-T Income Verification – Order your 1, 2, 3, or 4 year tax transcripts through MCA, and you will receive them in 1-2 business days.
  • Focus Reviews – Get quick pre- or post-closing compliance checks, which include our professionals’ advice on how to correct any issues.
  • Identity Verification – Comply with Fannie Mae’s new announcement SEL-2010-01 and the Patriot Act, which reqiure financial institutions to verify the identity of borrowers.

Join our free monthly webinar “Continuing to make sense of the new GFE: A more in depth look.”

We want to thank those who attended our first webinar: Making Sense of the New GFE. We have posted the slides from February’s webinar on our website. March’s webinar will be a more in depth look at the new Good Faith Estimate.

Continuing to make sense of the new GFE: A more in depth lookGet more detail about fee disclosure and changed circumstance as they relate to the GFE.

Join our webinar on Thursday, March 18 at 12:00 pm MST.
Reserve your webinar seat now at:
Register Now

After last month’s webinar that gave a basic overview of the 2010 Good Faith Estimate,  we received requests for a more interactive and in-depth training. This month’s webinar will consist of a brief, yet comprehensive, presentation on fee disclosure and changed circumstance as they relate to the Good Faith Estimate, followed by a panel discussion featuring several experienced mortgage professionals.

We are always happy to hear from you and encourage you to submit your questions to info@mortgagecomplianceadvisors.com.

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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.

www.MortgageComplianceAdvisors.com

Underwriting & Processing Tips

We received many excellent and challenging questions during our webinar “Making Sense of the New GFE,” hosted in the month of February. As promised, we have posted the slides from the webinar on our website, as well as answers to all 33 questions we received about the new GFE. We have included the first four questions below.

*Please visit our website to read all 33 questions and answers.

Question 1 - We understand two circumstances in which the compensation to the originator can change: the loan amount changes and a portion of the origination charges are dependent on the loan amount; the loan program changes.  If a loan is floating and is later locked, we understand that the credit or charge to the borrower may change, but “Our Origination Charges” may not change and the originator’s comp (even if the YSP or rebate changes) will not change.  Correct?

  • Answer: According to our interpretation of the resources we have utilized, that is correct.   HUD FAQ’s #19, page 8, states the following- If a borrower locks the interest rate after the GFE has been issued, a revised GFE must be issued within 3 days of the interest rate lock reflecting the date that the rate lock is good through.  Any interest rate-dependent charges (specifically Block 2, Line A and Block 10 on the GFE) and terms that changed must also be updated on the revised GFE.

Question 2 – We have seen several large lenders consider a change in pricing to be a changed circumstance that permits redisclosure and a change to Our Origination Charges and the broker’s comp.  Is this permitted?  If so, what is the rationale under the rule?

  • Answer: This is not permitted once a rate has been locked.  HUD FAQ’s 1/28/10 states market fluctuations do not constitute a changed circumstance and a GFE may not be revised to reflect market fluctuations.

Question 3 – If I change the loan amount, does a new 1003, TIL and GFE need to be signed?

  • Answer: These documents will need to be re-disclosed to the borrower within 3 days and evidence of re-disclosure or re-issue will need to be maintained in the file.

Question 4 – If the Buyer is paying a 1% commission of the contract amount to the seller (in this case a bank).  The transaction is a short sale.  Should this be disclosed as a closing cost on the GFE for the buyer?

  • Answer: No.This charge is considered real estate commission and will not need to be disclosed on the GFE. [...Q&A continued on our website.]
FHA Update

- Extends deadline to February 17, 2011 for temporary authority from ML 2009-22 (Revised Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223(f) Apartments).

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


- Announces four new mortgage insurers.  View the entire letter

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- Introduces Loan Quality Initiative (LQI), which makes several changes to be announced over the next few months. LQI focuses on several areas, including:

  • Policies that confirm the identity and occupancy of the borrower, validation of qualified parties to the transaction, and policies that address the borrower’s credit profile
  • Updated quality control requirements
  • Delivery of additional information about property and appraisal
  • Loan delivery enhancements
  • Reporting and validation of mortgage insurance coverage data  

Loan Quality Initiative Resources (FAQs, summary with key dates, live web seminars, etc.)
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- Describes some changes impacting Selling Guide as result of Loan Quality Initiative (LQI).

- “The change to the Potential Red Flag messages will be effective the weekend of April 17, 2010.”
- Policies effective June 1, 2010:

  • “Lenders will be required to confirm the identity of each borrower whose credit is used for the purpose of determining ability to meet Fannie Mae’s underwriting and eligibility standards prior to the extension of credit.”
  • All borrowers are required to have a Social Security number or ITIN.
  • Lenders must confirm that companies involved in origination, underwriting, or servicing are not on GSA Excluded Party List or HUD LDP List prior to delivery of loan.
  • “Lenders [must] determine that all debts of the borrower incurred or closed up to and concurrent with the closing of the subject mortgage are disclosed on the final loan application and included in the qualification for the subject mortgage loan.”
  • “If the subject property is a condo or other property type that is identified by a unit number, the unit number must be included in the property address on the note.”

- Effective January 3, 2011, “LTV ratio calculation [must] be truncated (shortened) to two decimal places, then rounded up to the next whole percent.”  View the entire announcement

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- Announces that the Selling Guide has been updated to incorporate several miscellaneous clarifications or omissions. View the entire announcement
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- FHFA extends Home Affordable Refinance Program (HARP) to June 30, 2011.

- ”Accordingly, lenders may continue to apply the HARP flexibilities to loans originated under Refi Plus™ and DU Refi Plus™ provided the note date is on or before June 30, 2011 and the loans are delivered to Fannie Mae no later than October 31, 2011.”

View the entire notice

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- Describes the following:

  • Reclassifying HAMP Program MBS Mortgage Loans
  • Expedited Reimbursements of Servicer Advances for Reclassified MBS Mortgage Loans
  • Executing Modification Agreements

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

- Provides guidance on HAMP, including requirement for full verification of borrower eligibility after servicer receives “Initial Package.”  View the entire bulletin

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  • Requires Sellers to take out separate fixed-rate Cash contracts for Relief Refis with specified higher LTVs (effective February 22, 2010)
  • Corrects deadline for submission of Guide Form 996E
  • Provides guidance on Form 16SF

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Bulletin 2010-5: Selling and Servicing

- Announces enhancing Loan Prospector to provide a point value estimate from HVE for a property address. Also announces changes to Guide related to this enhancement:

  • Sellers must have copy of entire Note in file
  • Sellers may not delegate endorsement of Notes via power of attorney
  • Guide reflects a few updates for various states (IL, NH, RI, CA, GA, NC)

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Bulletin 2010-6: Freddie Mac Relief Refinance Mortgage Offering Extended

- Extends offering of Relief Refinance Mortgages–must have Note Dates on or before June 30, 2011.

View the entire bulletin

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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.
VA Update

[No new circulars]
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To view VA Circular/News for 2010, visit the VA website.
Feel free to call us with any questions at 877-226-3216.

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Mortgage Compliance Advisors | 5505 South 900 East | Suite 110 | Salt Lake City | UT | 84117

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Nov
04
2009

MCA Monthly Update – November 2009

Mortgage Compliance Advisors helps you stay compliant.



MCA Monthly Update
November 2009
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.

Update: The FTC recently extended the enforcement date for the Red Flags Rule to June 1, 2010.* Implement your Red Flag Policy to comply.

*(See http://www.ftc.gov/opa/2009/10/redflags.shtm.)

Underwriting & Processing Tips

Based on some common findings from quality control audits, we have compiled a list of four tips from the month of October.

1. If the final TIL APR varies from the intial TIL by more than .125%, it must be redisclosed (as of July 30, 2009).

2. One of our most common problems is the duplication of documents throughout the file, which can make the file much larger than it should be. Please make sure to review your files to prevent excessive duplication.

3. The underwriting approval is required in your package. Make sure to retain and include a copy of the underwriting decision in your file.

4. For quality control audits, be sure to include only final AUS findings in the file.

FHA Update


ML 09-38: Update on Eligibility Requirements for Nonprofit Instrumentalities (115 Waiver).

- “Expand[s] eligibility requirements for nonprofit instrumentalities of government to include entities the income of which is excluded from Federal taxation under § 115 of the Internal Revenue Code of 1986 (IRC).



- [They can be approved] for placement on the FHA Nonprofit Organization Roster (Roster) and …participate in single-family housing programs as providers of secondary financing.” (View the entire letter.)

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ML 09-39: Updated Claim Filing and Delinquency/Default Reporting Requirements For FHA’s Making Home Affordable Modification Program (FHA-HAMP).

- “Updated claim filing and delinquency/default reporting requirements for the FHA Home Affordable Modification Program (FHA-HAMP).



- Mortgagees must begin reporting the updated status codes beginning with the January 2010 reporting cycle.”

(View the entire letter.)

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ML 09-40: Policy and Procedures on Multifamily Mortgage Insurance Applications Involving Master Lease Structuring to facilitate the use of Tax Credits.



- “Represents the Department’s final policy and procedures for Master Lease applications…

- A Master Lease, also known as a Sandwich Lease or Credit Pass Through, is used by developers of multifamily projects to maximize the realization of tax credit equity and distribute benefits among various investors.” (View the entire letter.)

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ML 09-41: Appraisal performance standards and sanctions.



- “Reminds mortgagees and appraisers of [FHA] appraisal performance standards… and FHA enforcement standards and sanctions that can be imposed by the Department upon appraisers who do not comply.” (View the entire letter.)

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ML 09-42: Sub-Servicing of FHA-insured Mortgages.

- “To meet the increased need for loss mitigation, the Department has no objection to mortgagees entering into subservicing agreements with other FHA-approved servicers to perform loss mitigation functions.” (View the entire letter.)

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ML 09-43: HOPE for Homeowners Program – Comprehensive Guidance.

“Key changes to the HOPE for Homeowners (H4H) Program:



- Borrowers are ineligible if their net worth exceeds one million dollars,

- Borrowers must not have defaulted on any substantial debt in the last 5 years,

- The age of appraisal now follows standard FHA guidance,

- Reduced mortgage insurance premiums,

- Revised loan-to-value and debt-to-income ratios,

- Maximum loan-to-value excludes the Upfront Mortgage Insurance Premium,

- Eliminated requirement for obtaining most recent two year tax returns,

- Eliminated special lender and underwriter certification,

- Exit Premium replaces Shared Equity,

- Shared Appreciation feature eliminated,

- New note and mortgage replaces previous shared equity and shared appreciation notes and mortgages, and

- Lenders must submit 5 test cases for pre-closing review by FHA.” (View the entire letter.)

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ML 09-44: Home Equity Conversion Mortgage (HECM) Program — Clarification of Debenture Interest Calculation for HECM Claim Type 21; Claim Filing Instructions for HECM Claim Types 21 and 24.


“Items addressed in this Mortgagee Letter:

-

Clarification of the term “due date” as it relates to HECM Claim Type 21.

- Identification of the additional information that must be provided for Claim Type 21, to ensure the proper calculation of debenture interest. (View the entire letter.)

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ML 09-45: Introduction of HUD’s Web-Based Training Application: Electronic Class (EClass) on Loss Mitigation and Servicing System.

- Announces that HUD’s on-line, web-based training application, EClass, is now available. It will provide additional training on FHA’s Loss Mitigation Programs, including FHA-HAMP, and other industry questions.

- The web-based application may be accessed at the following address: https://eclass.hud-nsctraining.com. (View the entire letter.)


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To view all HUD Mortgagee Letters for the year, visit the official website.

*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


Update, dated 10/6/09: Mortgage Loan Data Requirements

- “Effective date for the requirement to deliver the loan origination identifiers and appraiser data elements has been extended to July 1, 2010.

- For mortgage loan applications taken on or after July 1, 2010, Fannie Mae will require the use of the updated Form 1003.” (View the entire notice.)



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Announcement 09-30: Retirement of the HomeSaver Forbearance™ and Conversion to the Payment Reduction Plan™.

- “Payment Reduction Plan™ (PRP) will replace the HomeSaver Forbearance™ (HSF) program.

- The purpose of a PRP is to provide a borrower with temporary payment relief while the servicer and the borrower work together to find the appropriate permanent foreclosure prevention solution.” (View the entire announcement.)

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Announcement 09-31: Updates and Clarifications to the Home Affordable Modification Program.



Contains updates and clarifications to the following topics:

- Updates to Standard HAMP Documents

- Changes to Eligibility Determination Based on Net Present Value Evaluation

- Principal Forbearance Thresholds

- Verifying Borrower Income and Occupancy Status

- Modification Process

- Reporting

- Clarification of Reimbursement of Administrative Costs (View the entire announcement.)


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Announcement 09-32: Selling Guide Update – October 2009.


- Announces the release of the first update to the April 2009 Selling Guide, which will replace the April 2009 Selling Guide. (View the entire announcement.)

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Selling Notice, dated 11/4/09: Electronic Appraisal Delivery Update.

- Announces deadline change from March 1, 2010 to July 1, 2010 for requirement to submit electronic appraisal reports in an acceptable XML format. (View the entire notice.)





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Announcement 09-33: New Deed-for-Lease Program.

- Introduces Deed-for-Lease Program (D4L), designed to minimize bad effects caused by vandalism and theft to vacant homes.

- “D4L allows qualifying borrowers of properties transferred through deed-in-lieu of foreclosure (DIL) to remain in their home and community by executing a lease of up to 12 months in conjunction with a DIL.” (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 2009-24: Credit and Property Eligibility.

- Revises certain credit and property eligibility requirements, including changes to requirements for Freddie Mac-owned streamlined refinance mortgages and Freddie Mac Relief Refinance Mortgages.

- Also announces that certain higher-risk mortgages will no longer be eligible for purchase. (View the entire bulletin.)

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Bulletin 2009-25: Multiple Subjects.

- Makes multiple changes to selling and servicing requirements, such as document custodial operations, uniform instruments, attorney fees and title expenses, etc. (View the entire bulletin.)

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Bulletin 2009-26: Home Affordable Modification Program.

- Reminds of changes to HAMP made in Supplemental Directive 09-07.

- Revises partial principal forbearance and NPV requirements

- Reminds of new HAMP tool available soon – Imminent Default Indicator (IDI)

- Reminds that Data Collector is being retired and replaced with the new HAMP Reporting Tool (View the entire bulletin.)

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To view Freddie Mac news, visit Freddie Mac’s website.

Get reference manuals for FHA, VA, and HECM.
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Sep
04
2009

MCA Monthly Update – September 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains 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.

Additionally, 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 three tips from the month of August.

1. We are seeing TIL Disclosures on FHA loan files with conventional parameters. Remember on the initial TIL disclosure, the FHA late fee is 4% (not 5%) and the loan is assumable with conditions.

2. The Servicing Disclosure dated January 16, 2009, is now mandatory–any older version is unacceptable. Make sure it is properly completed with appropriate boxes checked.

3. We continually have problems determining compliance with the advance disclosures for TIL and RESPA. Remember, if the application and all disclosures are not completed in a face-to-face interview with signatures, use a date stamp showing “documents mailed to applicant(s) on September 3, 2009.” The date stamp should be on both the original as mailed and the file copy. When the original is returned by the applicant, the processor should remove the file copies to eliminate duplicate copies in the file.

FHA UPDATE

• Electronic Annual Certification to Replace Title II Yearly Verification Report: Letter 09-25. “Effective September 1, 2009, all program participants seeking renewal as an FHA-approved mortgagee must complete the electronic Annual Certification as a component of the renewal process [which replaces the paper Yearly Verification Report].” (View the entire letter.)

• Eligibility of Projects for Mortgage Insurance where Construction has Started: Letter 09-26.. This letter “temporarily authorizes and establishes policy for Section 220, 221(d) and 231 mortgage insurance programs for multi-family proposals that were unable to complete construction due to a loss of funding..” (View the entire letter.)

To view all HUD Mortgagee Letters for the year, visit the official website http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm.

For information about our FHA, VA, or HECM reference manuals with regulations and policies updated quarterly, visit our website.

FANNIE MAE UPDATE

• Retirement of HomeStyle® Construction-to-Permanent: Announcement 09-28.. “Fannie Mae will be retiring the HomeStyle Construction-to-Permanent mortgage product… Effective immediately, lender applications for HomeStyle Construction-to-Permanent approval will no longer be accepted. Closed HomeStyle Construction-to-Permanent loans must be purchased by Fannie Mae from existing approved lenders by November 30, 2009.” (View the entire announcement.)

• Reminder: From Announcement 09-19, dated June 8, 2009: “Form 4506-T Lender Tips.”. On or after September 1, 2009, “Fannie Mae’s updated policy regarding use of IRS Form 4506-T to validate borrower income documentation (Announcement 09-19) requires the lender to:

- have all borrowers (regardless of income source) complete and sign Form 4506-T at both application and closing

- add the execution of Form 4506-T with the IRS (directly or through an authorized vendor) to their written quality control (QC) plan (refer to the Selling Guide, Subpart D1, Lender QC Process, for details about lender QC requirements)” (View the entire announcement.) If you need help complying with this rule, give us a call.

To view all Fannie Mae Announcements and Letters for the year, visit https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp?referrer=frpromo.

FREDDIE MAC UPDATE

• Single-Family Seller/Servicer Guide: Bulletin 2009-22.. This bulletin makes several changes to selling requirements, including guidance regarding area median income changes, amending appraisal requirements for super conforming mortgages, and updates for several forms and exhibits. (View the entire bulletin.)

• Off-cycle Update to Exclusionary List: Industry Letter dated August 21, 2009.. The Freddie Mac Exclusionary List has been updated and may now be accessed via the Freddie Mac Selling System, MIDANET, MultiSuite, and Loan Prospector.

“As a reminder…Seller/Servicers [are required] to represent and warrant that they have not employed and will not employ any person listed on the Freddie Mac Exclusionary List as a Principal in connection with any Mortgage sold to Freddie Mac or in connection with any function related to such a sale.” (View the entire industry letter.)

To view Freddie Mac news, visit http://www.freddiemac.com/singlefamily/.

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