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Monday Morning Mortgages>
Monday Morning Mortgages
September 21, 2009
Monday Morning Mortgages ~ Monday 9/21/2009
FHA Joins HVCC Ranks
Ouch! As recently as Aug 31, FHA was quoted as “not considering adopting the Home Valuation Code of Conduct appraisal system now in place at Fannie Mae and Freddie Mac” (“Inside Mortgage Finance” Aug 31, 2009). So Friday’s announcement came as a shocker. The FHA Commissioner announced in a series of 3 mortgagee letters (2009-28-30) that beginning January 1st, 2009, FHA will prohibit appraisals ordered by mortgage brokers or borrowers, in addition to the current restriction of real estate agents’ involvement in the appraisal order process.
Details in the Mortgagee Letter 2009-28 state that “FHA does not require the use of AMCs (Appriasal Management Companies) or other third party organizations for appraisal ordering…” but lenders are all using the dreaded AMCs to order appraisals, and there is no other outlet for placing appraisal orders around the nation since these AMC systems, however flawed, are already in place.
That said, not all AMCs are performing poorly. A local appraiser is more apt to show up at the home for inspection now that the AMCs have compiled ample stable of approved appraisers. Appraisal turntimes depend on the individual appraiser, but the AMCs seem willing to light a fire under the appraiser if they are dragging their feet. My biggest complaint is that the appraisers’ payment for service has been drastically reduced.
I don’t think HVCC hurts mortgage brokers as much as it hurts appraisers, but HUD is trying to ease the pain by requiring that appraisers “are compensated at a rate that is customary and reasonable for appraisal services performed in the market area of the property…”. It also states the “The fee for the actual completion of an FHA appraisal may not include a fee for management of the appraisal process...” Well that is an improvement over current HVCC where appraisers are getting paid as little as half fees from pre-HVCC. Let’s see if it actually transpires to protect HUD approved appraisers for fair payment for their services.
There are provisions for the portability of the appraisal if the borrower needs to change lenders during the process, with HUD requiring the lenders to be more supportive of appraisal portability. The time a HUD appraisal is valid has been reduced from 6 months to 4 months.
For complete mortgage letters, visit http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/
The Fast and Easy Rehab Loan
The FHA 203(k) rehabilitation loan is a bit complicated and expensive to use for the homebuyer who is not in the building trade, but the Fast and Easy version this program is quick, easy to use, with a minimal fee ($250). This is exciting because our biggest challenge in Sonoma County right now is inventory in the less than $350k range. In the past, many buyers don’t have the extra cash to be prepared to handle a fixer-upper as their dream home purchase. But this Fast and Easy Rehab Loan is just the tool to open up more inventories to your buyers and more buyers for your sellers.
Here are some highlights:
• Will fund improvements from $5k to $35k and can additionally fund $8k in Energy Efficient improvements
• 3.5% down payment of sale price plus improvements
• Can use for REO, short sales, incomplete remodels
• Owner occupied only
• 1-2 units
• Only 2 simple draws
• Does not require a contractor
• FICOs down to 620
• Up to $662,500 in Sonoma County
Repairs can include but not limited to:
• Appliances including stove, refrig, laundry, dishwasher
• Termite damage, mold remediation
• lead based paint stabilization
• Energy upgrades
• Kitchen and bath remodel
• Roof, HVAC, Plumbing, Electrical
• Carpet, flooring, paint, windows, doors, siding
• Exterior deck, porches, stairs, patios
• Septic/well work
• Some landscapi
This program is a benefit for both sellers and buyers, as REO fixer-uppers can be listed as being a candidate for this financing. Any issues that would get in the way of a standard FHA loan can now be mitigated with this buyer financing.
Mark Your Calendar!
I will have presentation on this financing with an FHA appraiser present to answer any and all FHA appraisal and improvement valuation questions:
Wednesday, September 30, 1pm- 2:30pm
First American Title Company
Mendocino Avenue
Educate Yourself. Space is limited. RSVP to me.
Rates
Rates continue to be excellent! With the stock market now sure which direction it is going, the 10 year Treasury Note is at 3.44% and rates are excellent. $112 billion of government debt going on sale this week will influence rates throughout the week.
Today's Rates (see current days throughout the day with APR calculations at
www.sonomacountyhomeloans.com
WITH ONE LOAN POINT
Conforming (<= $417,000)
30 Year 4.75%
5/1 ARM 3.875%
5/1 ARM IO 3.875%
Jumbo Agency ($417,001 - $662,500 in Sonoma County)
30 Year 5.125 %
FHA Conforming (<= $417,000)
5.0%
FHA Jumbo (to $520,950)
5.25%
Super Jumbo (<= $3 million)
30 year fixed 6.25%
3/1 ARM 5.0%
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