About the Author
Karen Deis is publisher of www.MortgageCurrentcy.com, the only e-zine that explains the mortgage rules and regulation changes in plain language so you can easily understand how they affect you and your loan files.
The big news is the three changes to the FHA Annual and Up Front mortgage insurance. FHA issued Mortgagee letter 2012-4 and it was out there for few days until they realized that they had some incorrect LTV’s listed on the chart. They pulled the old mortgagee letter and issued another one with the new LTV’s, but never changed the date or the ml number. So, be sure that you have the right mortgage letter.
Speaking of dates, there are two different “effective” dates that come into play here, and each date goes into effect when the FHA case numbers are assigned.
The MIP updates go into effect for loan amounts $624,999 and lower. That date is April 9. For loan amounts $625,000 and higher, the increased MIP date is June 11, 2012.
Mortgagee letter 2012-4 also covers the decrease in MIP for streamlined refis for existing FHA loans that have been endorsed on or before May 31, 2009. It’s not the closing date, and it could take anywhere from 2 weeks to 2 months to get an FHA endorsement. This goes into effect for all case number assigned on or after June 11, 2012.
I know, I know, you’re probably asking where the heck did they come up with that date? Well, it just so happens that up-front MIP refunds are made during the first 36 months of the loan, right? So any loans endorsed prior to June, 2009 are not entitled to a refund. Why give back money that has already been spent?
So, just to keep piling it on, FHA issued mortgagee letter 2012-3 which is not only going to kick some homebuyers to the curb, it’s going to have a residual effect that I’ll discuss in a minute.
Oh, and this one goes into effect for all case numbers issues on April 1, 2012.
The elephants in the room here are collections and judgments—which fall into different categories.
- Disputed accounts in excess of $1000
- Disputed account lower than $1000
- Collections equal or greater than $1000, which also includes medical accounts
- Public records and judgments
- Disputed collections or judgments due to identify theft, or unauthorized use.
Each category has its own set of rules—which were confirmed in a telephone conference call with HUD officials. Read the article and you’ll learn that there is more to it than what’s in the mortgagee letter.
So the big problem with all of this? My friend Edie Webber, Clean Slate Credit, says that paying off these collections will actually tank a client’s score.
It’s best to leave it alone and try to get it removed via credit repair. If it is removed, it is no longer an issue. Check out her website: www.640orfree.com.
Oh, two other things that came out of this HUD letter—self-employed borrowers will need to provide either signed quarterly tax returns—or an audited, yes I said audited, P&L statement.
The other is in regard to Identity of Interest and includes the definition of a family member. It includes a lot more people than before.
One last thing, which has nothing to do with the mortgage rules – we got our hands on the latest NMLS stats. As of December 2011, there were 226,000 mortgage loan originators and 375,000 plus registered originators.
I think you’ll also be interested in knowing how many mortgage loan originators, companies and branches are licensed in your state!
And, if you aren’t a subscriber, what are you waiting for? To learn the news on Facebook?—which does not always give you the fine details you need to get loans approved.
Here’s a link to read all 11 articles for the next 7 days for a buck! www.MortgageCurrentcy.com
Why Mortgage Currentcy? Because getting a loan approved these days IS rocket science.