FHA STREAMLINE Training

Transcription

1 FHA STREAMLINE Training Offered by FIRST MORTGAGE CORPORATION March 10, 2015 Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Informationis accurate as of the date shown below and is subject to change without notice. 3/10/2015 AGENDA What is an FHA Streamline refinance? Purpose of the Program Overview and Basic Program Highlights What s new? FHA Streamline Refinance Program Eligibility Guidelines Program Guidelines Underwriting Guidelines Pricing Sample Steps, Tips, Hot Buttons, Additional Resources FMC Support 2 1

2 FHA Streamline Refinance What is an FHA Streamline Refinance? FHA Streamline Refinances are FHA-to-FHArate & term refinances designed to reduce the borrower s principal and interest payment. Purpose of an FHA Streamline Refinance To lower the monthly P&I on a current FHA insured mortgage. 3 FHA Streamline Refinance Overview The FHA Streamline refinance option is only available to FHA customers, who have demonstrated the ability to repay their mortgage, and have verified their income and assets as part of their original loan. As a result, these borrowers may qualify to refinance without reverifying their: Income(Verbal VOE only) Assets(only enough for funds to close if necessary) Credit Rating(Unless doing full credit qualify) 4 2

3 FHA Streamline Refinance Processing Types FHA offers the following types of processing: NO credit qualifying Streamline Credit qualifying Streamline Streamline without an appraisal Streamline with an appraisal 5 FHA Streamline Refinance What s New? Lowering of the MIP by.50% On January 9, 2015, FHA announced the reduction of the Annual Mortgage Insurance Premium (MIP) rates by.50%, on mortgages with terms greater than 15 years, effective with case # s issued on or after January 26,

4 FHA Streamline Refinance Benefits of the new change Borrower(s): Borrower s who purchased a home in the last 1-3 years using FHA financing, is a potential candidate to save money Originator: Re-connect with your prior customers / existing clientele Opportunity to increase pipelines 7 FHA Streamline Refinance ***IMPORTANT TO KNOW*** 1. Up-Front Mortgage Insurance Premium (UFMIP): Borrower will be paying a new up-front MIP, and will receive a credit that will range approximately around: 80% -if the original loan has one month seasoning 58% -after one year 34% -after two years 10% -in month 36 If there is little or no credit toward the UFMIP, the borrower will have a large sum to overcome 8 4

5 FHA Streamline Refinance ***IMPORTANT TO KNOW*** 2. Assessment Periods: A borrower with a closed loan case number that was issued prior to June 3, 2013, has an AMIP that will drop off when the Loan-to-Value-Ratio (LTV) hits 78% (and5 years). Borrowers with lower LTV s may be at a disadvantage to be put into the new cancellation provision where an LTV over 90% will never have the AMIP drop; this could be considered Unfair, Deceptive or Abusive Acts or Practices. Inform borrower of this provision don t put borrower s into financing that assumes they are getting out of the financing before any specific tipping point. 9 FHA Streamline Refinance ***IMPORTANT TO KNOW*** 3. Closing Costs: Closing costs may push the total amount of upfront costs to recoup beyond a reasonable time frame. What is reasonable? 3 Years or 5 Years? Do the math on the shortest time frame for the borrower s scenario 4. MIP: The FHA AMIP is based on the average unpaid principal balance throughout the year. If the LO uses the loan amount to calculate the MIP savings amounts, the amount will be over disclosed and may not reflect the correct savings, if any, to the borrower. 5. Lender Overlays: Many lenders have credit overlays for Streamline Refinances. Borrowers will still need to qualify and pass a credit check, and in some cases, they may want an appraisal. 10 5

6 Basic Eligibility Requirements FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it FHA Streamline Refinance Basic Requirements (ML ) 1. The mortgage must already be a 203(b) FHA-insured mortgage 2. At time of application, the borrower must have made at least 6 payments on the FHA-insured mortgage being refinanced (to offset additional risk) At least six full months must have passed since the first payment due date of the refinanced mortgage, AND At least 210 days have passed from the closing dateof the mortgage being refinanced (count actual # of days) Eg., If the FHA case number on the mortgage being refinanced was closed on or before December 1, and if the borrower s first payment on that mortgage was due on January 1, the lender may request assignment of an FHA case number for the refinancing mortgage no earlier than July

7 FHA Streamline Refinance Basic Requirements (ML ) 3. Borrower s must be current on the loan being refinanced for the month due PRIOR to the closing month Eg., If borrower is closing on February 25, they must have paid their January payment within the month of January. 30 vs 60 days Interest -Sample: Borrower has the option to make their February payment at the beginning of the month, or they can include it in the payoff amount at closing If they make their February payment, then finance only 30 days into new loan (March interest 1 st payment due April 1) If they do not make their February payment, it can be included in the new loan and will be made at closing Finance 60 days of interest into the new loan (February and March Interest 1 st payment due April 1) If loan is not closing in February, contact borrower immediately to make their Feb. payment otherwise they will be late and have to wait 90 days 1 3 FHA Streamline Refinance Basic Requirements 4. For mortgage histories with 6 months to less than 12 months, all payments must be made within the month due 5. For mortgage histories > 12 months, no more than 1x30 late in the preceding 12 months; 0x30 in the previous 3 months from date of application 6. Cash back to the borrower is not allowed Exception minor adjustments at closing and may not exceed $500 Only borrower funds can be refunded; any overage from rebate or loan amount will be done as a principal reduction 7. Occupancy of a former Investment Property: 12+ months or more prior to the loan application date, maximum financing allowed at the same level as an owner-occupant borrower < 12 months prior to loan application date o NOT ALLOWED as a Streamline Refinance; o Must be done as Rate and Term refinance to max 85% LTV 1 4 7

8 Ineligible Transactions Ineligible for Streamline Refinance Reducing the term of the mortgage Transactions that include a reduction in the mortgage term must be underwritten and closed as a rate & term refinance, and NOT as a Streamline refinance. Delinquent mortgages Delinquent mortgages are NOT eligible for Streamline refinancing until the loan is brought current. 15 Net Tangible Benefit FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 8

9 Net Tangible Benefit Definition NET TANGIBLE BENEFIT DEFINITION OLD Rule: A reduction to the PITI (Principal, Interest, Taxes, Hazard Insurance) NEW Rule: A reduction to the PIMI (Principal, Interest, Mortgage Insurance Premium) This allows borrowers who can reduce their P&I and MIP by 5% to do a Streamline Refinance, even if they have an increase in taxes and insurance, because borrowers must still pay taxes and insurance regardless of whether they refinance or not. This allows more borrowers to qualify for a streamline refinance, increasing their ability to repay their mortgages. 17 Net Tangible Benefit Topic Net Tangible Benefit Description Calculation of Net Tangible Benefit is based on the Principal and Interest (P&I) ~AND~ Mortgage Insurance Premium (MIP) Do notinclude Taxes and Insurance Net tangible benefit to the borrower is defined as: A 5% reduction to the P&I of the mortgage payment PLUS the Annual MIP OR Refinance from an ARM to a fixed mortgage Note: Reducing term of the loan in itself is NOT a tangible benefit. When refinancing to a HYBRID ARM, it may be considered a fixed rate mortgage *** See table on next page for clarification*** 18 9

10 19 Certifications and Verifications FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 10

11 FHA GUIDELINES (See next slide for FMC Overlays) FHA allows the use of the abbreviated version of the URLA on NON-CREDIT QUALIFYING refinances ONLY Sections IV, V, VI, VIII(a) VIII(k) are left blank Assets must be completed if needed to close see next slide for more on assets Additional changes: Borrower must be current on mortgage being refinanced 12 month mortgage history required Certifications and Verifications NO fico score required; if provided, must be entered into FHA Connection and/or may result in counter to full credit qualify Up to 60 days of interest can be included in the payoff at closing 21 Certifications and Verifications Cont d FMC OVERLAYS For FMC serviced loans, we will allow the use of the abbreviated version. For non-fmc serviced loans, we require Form 12122L 06/2011 which is a Certification of Employment addendum just to verify borrower is employed. Processor to certify employment; Funder will do final prior to funding Borrower employment information is required on 1003 Streamlines are allowed on manufactured homes with NO appraisal after one year seasoning of a payment history Property Inspections required for occupancy NON FMC NOO loans ONLY Property Inspection to verify property is occupied (not vacant) via a photo (only) from an outside agency, PLUS Two (2) Current utility bills required with ALL FHA Streamlines A water/trash bill is unacceptable as the main bill Property must be occupied; vacant properties are not allowed 22 11

12 HOW TO COMPLETE THE 1003 THE FMC WAY Sections I, II, III Complete in its entirety Section IV (Employment Information) Complete only current employer information in its entirety Section V (Income Information) LEAVE BLANK Completing the 1003 Section VI( Asset Information) -Must complete assets section ONLY if assets are needed to close List on 1003 and provide verification of seasoned assets Source all large deposits Section VI(REO Section) List only the FHA loan being refinanced, and any other FHA financed property the borrower owns Section VIII (Declaration Section) Answer only questions (j) (m) 23 Loan Amount Calculation FMC to FMC Escrow Transfer Calculation FMC s FHA Streamline and NTB Calculator FHA MIP Matrix FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 12

13 Loan Amount Calculation MAXIMUM INSURABLE AMOUNT LOAN AMOUNT CALCULATION: + Unpaid Principal Balance (From Payoff Demand) + Accrued Interest (From Payoff Demand) - Unearned UFMIP (From Netting Authorization) = Base Loan Amount (Drop cents) + New UFMIP (See MIP Matrix currently at 1.75%) = Total NEW Loan Amount with UFMIP (Drop cents) 25 Loan Amount Calculation ** IMPORTANT TO NOTE ** No Credit Qualifying Streamlines Cannot add closing costs, discount items, prepaid items, or other financing costs to the new loan balance The new BASE loan amount CANNOT EXCEED the original loan amount with UFMIP OK to exceed the county loan limit as long as the total loan amount of the new Streamline (including UFMIP) does not exceed the original principal amount of the original loan. An Appraisal may no longer be obtained to finance additional costs into the new loan. Current loan may only be increased by the new MIP Exceptionallowed if doing a Full Credit qualify only Full Credit Qualifying Streamlines WITH a new Appraisal BOTH an Appraisal andfull Credit Qualifyingwill be required to increase the loan balance to include closing costs or prepaid items 26 13

14 Escrow Transfer Calculation ** IMPORTANT TO NOTE ** Escrow Refund SEE FMC ESCROW TRANSFER CALCULATOR Allowed only on FMC to FMC refinances During tax times, funds may not be available to transfer to new loan amount calculation. For FMC to FMC loans, Servicing is paying taxes first before issuing payoff demands so that gives an idea of what s remaining to be transferred FMC Servicing: Currently at 5 business days for payoff demands Communicate with your borrower; make sure borrower has enough money to cover any escrow shortage and close the loan. If funds are needed, must document and source large deposits Transfer cannot result in impound account being negative 27 FHA Streamline & NTB Calculator FMC to FMC Escrow Transfer Calculator FHA STREAMLINE NTB CALCULATOR FMC TO FMC ESCROW TRANSFER CALCULATOR 28 14

15 FHA MIP MATRIX 29 Basic Underwriting Guidelines Additional Requirements FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 15

16 Underwriting Method Use of TOTAL Scorecard DO NOT use TOTAL Scorecard or DU on Streamline Refinances TOTAL was never intended to be used for Streamlines and the results are not considered valid. If TOTAL Scorecard (DU) was inadvertentlyused, do not enter ZFHA as the underwriter in FHA Connection; instead submit to UW for a manual underwrite The UW must use his/her CHUMS ID on page 3 of the HUD92900-A, and on page 1 of the FHA Loan Underwriting and Transmittal Summary (LT) If not, the loan must be underwritten and closed as a rate & term (no cash out) refinance transaction 31 Basic Underwriting Guidelines CREDIT Minimum Credit Score Program 07: None Required (See HUD Chapter 6 Section C and ML ) No Pricing Adjustments Program FG: Minimum 620 Pricing Adjustments apply Credit Report FMC does NOTrequire a credit report Full credit qualifying streamlines require a full credit report If a credit report was pulled, available credit scores must be entered in FHA Connection. If more than one score is available, you must enter ALL available credit scores 32 16

17 Basic Underwriting Guidelines SUBORDINATE LIENS Subordinate Liens Max CLTV In instances where there is a subordinate lien, the entire secondary lien amount must be included for the calculation of the CLTV. o For closed end seconds, use the original balance. o For HELOCs, the full line amount must be considered for maximum financing. o EIN # required on LT from existing lien holder of 2 nd. If subordinate financing is to remain in place, the Maximum CLTV allowed is capped at 125% For Streamline refinance transactions WITHOUT an appraisal: CLTV is based on the original appraised value of the property. For Streamline refinance transactions WITH an appraisal: CLTV is based on the new appraised value 33 Chapter 13 Streamline transactions are not permissible while in a Chapter 13 OK provided it meets certain requirements: Basic UW Guidelines DEROGATORY CREDIT 1. Must show history of payments as agreed for a minimum 12 months PLUS 2. Letter from Court stating borrower is OK to enter into a new Mortgage Obligation Be careful watch for code 7 on Mortgage Rating as that indicates loan is in BK Modifications Loans with partial claims such or a Mortgage Modification is NOT ELIGIBLE for an FHA Streamline refinance May be OK if there s a clean pay history and principal balance did not go up -cannot exceed original loan amount 34 17

18 Basic UW Guidelines DEROGATORY CREDIT Properties Included in a Bankruptcy Provide page of Bankruptcy that validates BK was discharged and that the property was reaffirmed. If not Mortgage Credit Rating must show that the credit agency contacted a party at the current lender for the mortgage being refinanced and verified that the Property was included in a BK and the secured debt was reaffirmed to the lender by the debtor Show the phone number and person who verified the information printed on the mortgage credit rating. Borrower to provide, along with the mortgage rating, a most recent 12 month payment history print-out showing all payments were made within the required timeframe. 35 No Credit Qualifying Credit Qualifying FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 18

19 NO Credit Qualifying Streamline A borrower is eligible for a Streamline Refinance without credit qualifying if: He/Shehas owned the property for at least 6 months, and, The previous borrower(s) received a release of liability at the time of the assumption Applies to mortgages that do not contain restrictions limiting assumptions only to creditworthy borrowers. A Mortgage/Credit only supplement is acceptable to document mortgage history. A full tri-merge credit report is not requiredand should not be in the file. These transactions must be manually underwritten. Submission through an AU system (DU/LSC) is prohibited and will result in Full Credit Qualify or ineligible with some investors. Program Codes: Use program ending with 07 Program FG: A minimum 620 credit scoreapplies -use a credit supplement to document the credit score only 37 Credit qualifying must be considered when: A change in the mortgage term will result in an increase in the mortgage payment by more than 20% When deletion of a borrower(s) will trigger the due-on-sale clause Following the assumption of a mortgage that Occurred less than 6 months previously, and Does notcontain restrictions (i.e. the due-on-sale clause) limiting assumptions only to a creditworthy borrower(s) Following an assumption of a mortgage that Occurred less than 6 months previously, and Credit Qualifying Streamline Did nottrigger the transferability restriction (the due-on-sale clause) such as in a property transfer resulting from a divorce decree, or by devise or descent 38 19

20 Credit Qualifying Streamline The following documentation is needed to determine the borrower is an acceptable risk: 1. Verify the borrower s income and credit report Verify stable monthly income Provide a full/tri-merged credit report on all borrowers 2. Compute the debt-to-income ratios 3. Determine that the remaining borrower(s) will continue to make the mortgage payments 4. Additional documentation may be needed as required by the DE underwriter 39 Credit Qualifying Streamline NOTE: The use of a credit qualifying streamline refinance for situations in which the change in mortgage term will result in an increase in the mortgage payment is onlypermissible for: Owner Occupied primary residences 2 nd home meeting HUD B.3, and Investment properties owned by government agencies and eligible nonprofit organizations 40 20

21 Without an Appraisal With an Appraisal FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it Streamline Refinance WITHOUT appraisal Maximum insurable mortgage amount cannot exceed: The outstanding principal balance plusup to 60 days of interest minus the applicable refund of UFMIP WITHOUT an Appraisal plusthe new UFMIP that will be charged on the refinance Calculation above applies only to owner occupiedproperties. New BASE loan amount cannot exceed the original TOTAL loan amount of the previous loan (which includes UFMIP) NON-OWNER occupant properties (includes 2 nd Homes),regardless of how it was originally acquired may only be refinanced for the OUTSTANDING PRINCIPAL BALANCE ONLY!!! 42 21

22 Mortgage Term ( C.2.b) Mortgage term is the lesser of 30 years, or The remaining term of the mortgage plus 12 years Appraisal At the time the case number is assigned, the original value must be obtained from FHA Connection or ECHO systems for a Streamline Refinance without an appraisal. If FHA does not provide the original value then the LTV ratio must be considered to be less than 90% for the purpose of determining the term of the annual premium. 2 nd Homes & NOO Properties ( C.2.e) WITHOUT an Appraisal 2 nd Homes and NOO properties may only be refinanced without an appraisal. NOO properties may only be refinanced as a No Credit Qualifying refinance 43 WITH an Appraisal (Full Credit Qualify Only) Streamline refinance WITH appraisal (must be FULL Credit Qualifying) This program is used when the borrower has built up equity through an increase in the appraised value and needs to roll in closing costs and pre-paids. Maximum loan amount is the LESSER OF (ML ): The existing principal balance (from the Payoff Demand) o may not include delinquent interest, late charges or escrow shortages minus the applicable refund of UFMIP plusclosing costs, prepaid items to establish the escrow account and the new UFMIPthat will be charge on the refinance OR 97.75% of the appraised value of the property plusthe new UFMIP that will be charged on the refinance 44 22

23 WITH an Appraisal (Full Credit Qualify Only) Closing costs and pre-paids can be rolled into the loan amount Prepaid expenses may include Per diem interest to the end of the month on the new loan Hazard insurance premium deposits Monthly mortgage insurance premiums, and Any real estate tax deposits needed to establish the escrow account Discount points may not be included in the new mortgage. If the borrower has agreed to pay discount points, verify the borrower has the assets to pay them along with any other financing costs not included in the new mortgage amount) 45 Payoff Calculation Cash Back Adding/Deleting Borrowers Manufactured Homes FHA STREAMLINE REFINANCE Understanding FHA Streamline How we do it 23

24 PAYOFF Calculation Items that can be included in a Streamline Refinance are: The existing unpaid principal balance Interest (allowed up to 60 days with FMC) Items that cannot be included in a Streamline Refinance are: 1. Delinquent Interest 2. Late Charges 3. Escrow shortages 4. Fax fees or other miscellaneous fees shown on the payoff 5. Any other debt including seasoned subordinate liens or money due an exspouse (these should be processed through a regular refinance) 6. Escrow refund see next slide for exception 47 Cash Back Cash Back The borrower can not receive more than $500 cash back on any type of Streamline Refinance The borrower can receive cash back above $500 if the exact amount of the coverage is a refund of the mortgage fee paid in advance of closing Eg., Appraisal fee; documentation is needed to support the borrower paid the fee from his/her own funds 48 24

25 Individuals may be ADDED to title without A credit worthiness review, AND Triggering the due-on-sale clause Adding/Deleting Borrower(s) Adding or Deleting Borrowers Individuals may be DELETED from title, only When deletion of a borrower(s) will trigger the due-on-sale clause When An assumption of a mortgage notcontaining a due-on-sale clause occurred more than 6 months previously, and The assumptor can document that he/she has made the mortgage payments during this interim period, OR Following an assumption of a mortgage in which The transferability restriction (due-on-sale clause) was nottriggered, such as in a property transfer resulting from a divorce decree, by devise or descent The assumption or quit-claim of interest occurred more than 6 months previously, and The remaining owner-occupant can demonstrate that he/she has made the mortgage payments during this time 6-Mos cancelled checks required to verify remaining borrower made payments on their own 49 Must always be same borrowers as original FHA loan Only exceptions are in cases of death or divorce Adding/Deleting Borrower(s) Cont d Divorce Remaining spouse must have been on title by themselves for at least 6 months Provide a copy of the final Divorce Decree Provide 6 months cancelled checks proving they ve been making the payments on their own Death We must have an original death certificate at doc signing Provide 6 months cancelled checks proving they ve been making the payments on their own In a case where Mom and Dad were co-borrowers with son or daughter and now want off the loan, a few rules must be observed. Son or Daughter must income and credit qualify. A fully completed, standard 1003/URLA will be required for this scenario, along with applicable income documentation (pay stubs, 2 years W2 s, etc.) 50 25

26 Adding/Deleting Borrower(s) Cont d Additional Information regarding Title: When a person gets married and they have a name change, the married name MUST be validated with a PASS through FHA Connection. This alerts us that the SSA has been notified of the change and has been updated on their system. A copy of their SS Card reflecting their married name will also be required Vesting from the old loan MUST transfer in the same order on the new FHA Streamline loan. Eg., John Smith and Mary Smith, Husband and Wife as Joint Tenants New loan must remain in the same order Make sure the LT, 1003 and FHA Connection ALL MATCH 51 Manufactured Homes Minimum 640 Fico Score required on Program FG; NO FICO on Program 07 No appraisal required with one year seasoning andsatisfactory payments for the 12 months prior. An AVM is no longer required on FHA Streamlines Underwriter s discretion based on NTB and overall file/property profile An appraisal is required if less than one year seasoning to a max 96.50% Maximum LTV/CLTV with a 660 fico(see Manufactured Matrix for more variations) Maximum 2 acres (up to 5 allowed with no more than 40% max Land Value Ratio) No flood zones, No dirt roads Non-occupying co-borrower not allowed Credit supplement with most recent 12 months paid as agreed No late pays 52 26

27 Other Information No Cost Refinances No cost refinances, in which the lender charges a premium interest rate to defray borrower s closing costs and/or prepaid items, are permitted Withdrawn Condominium Approvals If approval of a condominium project has been withdrawn, FHA will insure only Streamline refinances WITHOUT appraisals for that condominium project Seven Unit Exemptions An eligible investor that has a financial interest in more than seven rental units may only refinance WITHOUT appraisals 203(k) Loans All 203(k) funds must have been disbursed Buy-down Loans All funds must be used or applied to principal balance at time of pay-off 53 Pricing an FHA Streamline Sample Steps, TIPS, Additional Information Hot Buttons Resources PRICING Understanding FHA Streamline How we do it 27

28 PRICING an FHA Streamline Interest Rates for the FHA Streamline programs are available on Page 2 of the FMC rate sheet. Available Programs are: 1. Program Program.FG For Retail: Go to the FMC website or contact Secondary Marketing For Wholesale: Contact your FMC Account Executive or go to your AE s website for rates For Correspondent Lenders: Contact your internal Secondary Marketing Department for pricing 55 The following steps ARE required for streamline refinances: A copy of the original note should be obtained to verify the new loan will have the same borrowers LDP/GSA lists must be checkedto verify all parties associated with the transaction are not listed. A CAIVRS is not required. A streamline authorization number must be obtained from FHA Connection (if credit scores are available, they must be entered in FHA Connection) Verify that the loan is current at time of closing Obtain a 12 month mortgage payment history Sample Steps The URLA and HUD addendumto the URLA should be signed by the borrower as part of the application. Case assignment must include the Netting Authorization on the existing loan If Netting Authorization reflects a MIP credit, include in your calculation of new loan Est. HUD-1 on the new loan must also reflect the MIP Credit 56 28

29 We require that the current month s payment be made prior to funding, and not brought to escrow Any large deposits on Bank Statements/VODs have to be sourced Borrowers with pension/retirement income must provide award letter TIPS Additional Information We will NOTgive the borrower any impound credit shown on the demand as credit towards pay off If the demand shows an impound credit, we will require a revised demand without the impound credit. Any credit from the borrower s existing impound account must be refunded to the borrower via check by the existing lien holder in the form of a check; a credit to the loan amount will not be allowed at closing Exception allowed for FMC serviced loans NOO Streamline Refinance Transactions for outside payoff s will require 2 utility bills FMC has amended the Insurance Policy Requirements on refinance transactions to allow for a letter from the current insurance carrier in the event that the coverage is sufficient for our transaction - Minimum 3 mos remaining on policy is required or renewal is required. 57 Input the subject property in the REO screen of FirstBase. Input the lien holder and complete the OTMIP Refund Screen including old and new case numbers. This screen affects the Insuring Department and MIP remittance Department. If there is HOA and additional liens on subject property, indicate that in the existing payment on the 1003 page 2, as well as the proposed. Regardless, these additional costs to live there are not included in the qualifying. Use the property taxes on the prelim as they are the actual taxes. No need to calculate 1.25% or 2% for new construction. Review the credit supplement and demand to be sure the next payment due date match Get a VOD instead of bank statements if they require funds to close TIPS Additional Information Include an estimated HUD with the submission package; it s hard to calculate funds to close without it in the file Confirm the original endorsement date on the refiauthorization to be sure you re using the correct factors 58 29

30 FMC TO FMC FHA STREAMLINE TIPS FMC TO FMC -TIP SHEET on WHAT YOU NEED TO KNOW!!! PAYOFF DEMANDS, VOM'S or PAYMENT HISTORIES: When requesting payoff demands, VOM's or payment histories, please supply to the Loan Servicing department the complete 10-digit loan number of the loan that will be paid off; not the new loan number. All requests must be sent via toterri Sandoval AND Veronica Herrera. Demands will be issued by Terri "AFTER" county taxes have been paid. Veronica is on the for internal tracking purposes. Assign ordering of demand to ONE (1) personat each Branch/Office. The Processor and Loan Officer and AE's need to co-ordinate this at each office. Multiple requestsfrom the same office for the same loan causes unnecessary work and delays (causes 50% of the back up) andwill NOT be acceptable. 59 FMC TO FMC FHA STREAMLINE TIPS IMPOUND TRANSFERS and POSTED PAYMENTS: Impound transfer is only allowed for the actual amount needed to set up the impound account on the new loan. Any remaining impound balance will be refunded to the borrower AFTER payoff. An impound transfer worksheet is required in the file lis ng how much money will/can be transferred to the new loan. The impound worksheet must be itemized listing all escrow items. Refund of posted loan payments will be handled AFTER payoff, with any remaining impound balance. This is on a case by case basis and will only happen AFTER the loan payment has been posted to the loan. The payment will be applied to the impound account first, and refunded back to the borrower only after payoff

31 FMC TO FMC FHA STREAMLINE TIPS Supplemental taxes need to be paid. TAXES including SUPPLEMENTAL TAXES: Supplemental taxes can be paid from any excess impound balance. If so, take action ASAP and Jeanette Chavez and Nancy Waken to request payment of the supplemental taxes so you can get a new updated demand right away. County taxes. Review the type of loan being refinanced. Refinance -Chances are it may be OK to use the tax amount from the Prelim. Purchase in the last months -Look at the payment breakdown from when that loan funded, If the taxes on the Prelim are not close to the taxes included with their original payment, then don't use the tax figure from the Prelim; use the original calculation. 61 FMC TO FMC FHA STREAMLINE TIPS If County Taxes were paid in an amount less than what was calculated at the close of the loan, then paid supplemental taxes, add the two figures together to reach an estimated amount for their next tax bill. For example: Taxes estimated during closing of 1st loan... $ County taxes paid $ Supplemental taxes paid $ Take... $ $ = $ Use $ for the annual tax amount for the new loan 62 31

32 FMC TO FMC FHA STREAMLINE TIPS MISCELLANEOUS: Subordination Agreement's need to be prepared, signed and notarized in advance and submitted to Capital Markets prior to going to docs As noted above -the impound transfer is credited to impound expenses only, not towards closing costs Obtain an updated Insurance Policy with a minimum of 3 months remaining -do not use the policy from the original submission When the taxes or insurance are due next month, they need to be deducted from the impound balance When ordering docs there must be a minimum of 4 business days left in the lock in order to meet the rescission periodfmcto FMC refinance transactions cannot fund the last day of the month -funds need to go to title and we do not receive the payoff in time to avoid the per diem interest charge earned by the investor *** Tax files came*** P ayoffquotes will not be issued until after these disbursements have completed. If we paid taxes manually in the last few weeks we will issue that demand. We will advise when the mass disbursement of taxes has been completed and the issuing of payoff quotes will resume. 63 RESOURCES Mortgagee Letters: ML Other Mortgagee letters -go to the HUD website Handbooks, go to the HUD website For information on U.S. Department of Housing and Urban Development, visit: - For area median home prices: Forms: ws Mortgage Credit Analysis Worksheet FHA Stacking Order FHA Streamline No Cost Form FHA Streamline Employment and Income Certification 64 32

33 FMC SUPPORT WEB SITE Go to our FMC websites: 1. RATE SHEETS 2. TRAINING MATERIALS 3. GUIDELINES 4. FORMS 5. CALCULATORS 6. TOOLS 7. MARKETING TRAININGS First Mortgage offers FREE Weekly ONLINE Trainings See the FMC website for the March 2015 Training schedule Trainings for March 2015: 3/3 FMC Product Overview Presentation 3/5 ACCESS/FIRSTDOWN Program 3/10 FHA Streamline Training 3/12 NEW: FK Program Training 3/17 Sapphire Program Training 3/19 EB Product Training SUPPORT Retail: Loan Help Wholesale/Correspondent: Your FMC Account Executive For help with your: Scenarios Pricing / Fees Guidelines Loan Submissions Trainings 65 THANK YOU FOR YOUR BUSINESS On behalf of First Mortgage, thank you for joining today s training and we hope the information provided will help you build your business! The main purpose of First Mortgage Corporation s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs. While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources. FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material. While the information contained in FMC s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice.all non-legal professionals are urged to seek legal advice from a lawyer