Home Affordable Refinance Program Expanded to Up to 125% LTV
On July 1, Secretary of Housing and Urban Development, Shaun Donovan, announced expansion of the Home Affordable Refinance Program to permit refinancing of existing Fannie Mae and Freddie Mac loans with LTVs up to 125 percent (up from the current LTV limit of 105 percent). The goal of the refinance effort, as announced by the President, is "to provide access to low-cost refinancing for responsible homeowners suffering from falling home prices." http://www.fanniemae.com/homeowners/refinance-or-modify.html
Friday, July 31, 2009
Friday, July 24, 2009
Revised Truth in Lending Act (TILA) Disclosure Requirements Take Effect on July 30, 2009
Lenders will be subject to new disclosure requirements for mortgage loans under the Federal Reserve Board Truth in Lending Regulation (Reg Z). The new requirements apply to loan applications filed on or after July 30, 2009. The new rules are complex and compliance will be a challenge for lenders. Here are key highlights of the changes:
· The new requirements apply to all mortgages secured by a borrower's home, including primary and second homes and refinancings. Investor loans continue to be exempt.
· Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
· The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
· If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.
· The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.
· The new requirements apply to all mortgages secured by a borrower's home, including primary and second homes and refinancings. Investor loans continue to be exempt.
· Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
· The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
· If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.
· The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.
Thursday, July 2, 2009
Update on PMI Changes effective 7/1/09
A two family home in either Norfolk, Plymouth or Suffolk counties where the borrower is NOT getting an FHA loan either because of the condition of the property or because the rates are better with a conventional mortgage; BEWARE, MGIC one the larger PMI companies available has just made a guideline change regarding two family homes in restricted markets and Norfolk, Plymouth and Suffolk are considered restricted markets with MGIC.The change is that MGIC will NO longer offer PMI to anyone in those markets on two family properties. They will still offer PMI on three family and single family homes they have just decided not to offer it on two family homes. In closing double check any of your pre approvals on two family homes in those areas where the client is need of PMI and make sure the mortgage broker is up to date on the change and has an alternative mortgage available. Stay tuned for up to the minute updates. Your source for breaking mortgage news, Paul Winquist, CMPS
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