Written By: Stacey Sprain, Op-Ed Writer
I don’t know about anyone else but these past two weeks have been exhausting not only in dealing with extremely heavy loan volume due to the expiration of the Homebuyer Tax Credit Incentive but also because it seems the lenders are once again cracking down and changing policies left and right. We’re receiving so many announcements and bulletins it’s hard to keep up with them all! On that note, be sure to pay close attention to lender and agency announcements in regards to Fannie Mae’s Loan Quality Initiative. Many lenders are finally getting their arms around policies and expectations so announcements are coming fast and furious on requirements regarding LQI.
As we move toward the July 4th holiday weekend, there are also a number of outstanding industry-related issues seemingly held up in Washington. It’s not looking as if we will necessarily have final decisions passed on the two most critical hiatus issues:
1. The National Flood Insurance Program remains on hiatus since expiring for a second time on May 31st
2. The Rural Housing Loan Program funding remains on hiatus since funds were exhausted in May.
Until we receive news from Washington on either of these pending issues, you may wish to refer to my prior articles from the month of May which addressed both of these very important subjects.
Another item of interest was Fannie Mae’s decision to increase the waiting period that must elapse before a borrower is eligible for a new mortgage loan after a foreclosure. The current waiting period is three to five years, dependent upon whether or not the borrower can document extenuating circumstances. The new waiting period will be extended to seven years but will remain at three years if the borrower can indeed document extenuating circumstances. My thought is that it is Fannie Mae’s way of encouraging troubled homeowners to participate in the various assistance programs and counseling that is available to them. They actually open their Announcement SEL-2010-08 by referring to the variety of foreclosure alternatives that are available.
Freddie Mac recently launched a new section on their website called the Purchase Market Resource Center which has some great resources and information for first-time homebuyer marketing, short sales, underwriting tips and fraud resources. Visit the new site at http://www.freddiemac.com/purchasemarket/index.html?attr=PMRCEMC.
HUD finally issued an official Mortgagee Letter to implement the long talked about Strengthening of Risk Management. Mortgagee Letter 2010-20 discusses the changes to the current structure of FHA-approved lenders and the increased net worth requirements that are being phased in over the next few years.
In addition, HUD also released a helpful Cover Sheet for condominium project submissions. I urge everyone to utilize this checklist when gathering documents and preparing project packages for submissions to the HUD Homeownership Centers. Refer to http://www.hud.gov/offices/hsg/sfh/condo/initialchecklist.doc to access the new document.
Many are not aware but HUD also issued a temporary Waiver of HO-6 condominium insurance requirements for condominium units. The waiver can be referenced athttp://www.hud.gov/offices/hsg/sfh/condo/waiver-HO-6.pdf.
VA recently issued Circular 26-10-7 in regards to forbearance options for borrowers whose homes are affected by problem drywall. In addition they’ve also already addressed the issue of VA-guaranteed homeowners who may experience difficulties due to the oil spill in the Gulf of Mexico in their Circular 26-10-8 . These are two significant issues affecting existing homeowners and it’s great to see VA taking a proactive approach on communications in regards to forbearance options.
Be sure to take a look back at any of the important communications you may have missed while working so hard through the month of June and have a wonderful, safe and joyous holiday weekend! We can all use the breather!
About The Author
Stacey Sprain - As an op-ed writer, Ms. Stacey Sprain is currently a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution.
