It's good to know the jumbo market is alive and well! Alive and well for Tiger Woods who just got a residential construction loan for $54.5 million on Jupiter Island in Florida, which he agreed to pay back by January 2016. Of course, folks like pediatricians are having trouble finding an 80% loan for a few million, as are self-employed borrowers like architects, CPA's, or sail makers. But there is hope! (No, I don't know the lender or the terms)
OK, here goes, in no particular order, the very recent investor changes (skip to the bottom if uninterested). As always, readers should examine the bulletins themselves, but this will give you a flavor for what is happening:
Fannie Mae told servicers that it updated the allowable foreclosure time frames in the states of FL, MD, NV, and NY, is monitoring all delinquent loans in Fannie Mae's portfolio or MBS pools, and will begin notifying servicers of delays in delinquent loans, may begin conducting reviews of servicer loan files, processes, or procedures, is requiring accurate and timely reporting on the delinquency status of mortgage loans, and "will exercise our remedy to assess compensatory fees as deemed necessary following our review of selected loans." By September 15, servicers with mortgage loans secured by properties in Florida must provide Fannie Mae and all retained attorney firms in Florida with contact information for a primary liaison/team to whom all inquiries and documents should be directed for the mediation process.
Fannie also notified sellers that it is waiving the uniform security instrument prohibition against PACE loans with lien priority for whole loans purchased before July 6, 2010 and for loans in an MBS pool with an issue date on or before July 1, 2010, along with providing requirements for refinance of a loan that is owned or securitized by Fannie Mae and on which there is an outstanding PACE obligation obtained by the borrowers prior to July 6, 2010. Be sure to click on this link and page down to see the announcements in detail: https://www.efanniemae.com/sf/guides/ssg/2010annlenltr.jsp
GMAC updated its appraisal policies for all conforming and jumbo loan products. Starting earlier this week, as many other investors did, interior photographs are now required on all interior/exterior appraisal reports (interior/exterior and full are the same) when AU or a program requires an interior and exterior appraisal report. GMAC also alerted clients about the North Carolina General Assembly passing Senate Bill 1216, which amends the North Carolina Predatory Lending Act. "The term "points and fees" shall not include (i) the portion of the upfront fees collected and paid to FHA, VA, or USDA to insure or guarantee a home loan that exceeds 1.125% of the total loan amount or (ii) the portion of any upfront private mortgage insurance premium, charge or fee that exceeds 1.25% of the total loan amount, provided that private mortgage insurance premium, charge or fee is required to be refundable on a prorated basis, the refund is automatically issued upon notification of the satisfaction of the underlying mortgage loan, and the borrower has the right to request or receive a prorated refund in accordance with state or federal law. The total "points and fees" threshold is reduced from 5% to 4% of the "total loan amount" if the "total loan amount" is $20,000 or more."
Bank of America correspondents were told that BofA has adopted Fannie's appraisal policies which include interior photographs of the kitchen, all bathrooms, etc., and examples of physical deterioration, if present, along with examples of recent updates, restoration, remodeling or renovation, if present. "If Bank of America identifies any deficiencies within the appraisal as a result of a pre-purchase review, Clients may appeal with a LandSafe Field Review ONLY. Neither the External 2055 nor a full appraisal may be provided for the pre-purchase value appeal."
BofA also changed its FHA refinance CLTV limits, going to "the maximum LTV/CLTV on FHA rate and term (or No Cash Out) refinances with new or existing subordinate liens is 97.75%, and the maximum LTV/CLTV on FHA cash out transactions with existing subordinate liens is 85% CLTV (new subordinate liens currently have a maximum 85% CLTV)." Clients must manually overlay the new requirements - BofA's CLUES will be updated 9/7. Last but not least, on conventional loan programs, the final HUD-1 Settlement Statement (or HUD-1A if applicable) must be signed by all parties to the transaction at closing (i.e. both borrowers and sellers on a purchase transaction, or all borrowers on a refinance transaction), and an original or certified copy must be included in the loan file. In Escrow States, in lieu of a final HUD-1 (or HUD-1A if applicable) signed by borrowers/sellers, an estimated HUD-1, escrow instructions or other settlement statements that evidence the final fees and costs for the transaction may be used."
Recently SunTrust updated its FHA 203(b) to where secondary financing, including Community Second loans, will be eligible on FHA Jumbo purchase transactions. And temporary interest rate buydowns will be eligible on FHA Jumbo fixed rate transactions. SunTrust also rolled out information on revised credit card financing guidelines, eligibility of Freddie Mac LP Property Inspection Alternatives (PIAs) on Agency LP transactions with property values > $750,000, eligibility of gift funds to pay down and/or pay off debt, relaxed occupancy verification guidelines to eliminate requirement of letter from current servicer, allowance of written verifications of employment in lieu of paystubs and W2s, removal of maximum cash-out limitation and revised appraisal requirements for Agency Plus loans, revised requirement when the borrower is receiving more than $250 cash back at closing for DU Refi Plus loans, and revised guidelines for removing a borrower for DU Refi Plus loans. Lastly, SunTrust revised its maximum DTI ratio for Agency DU Refi Plus transactions to 50% DTI for STM to STM transactions, and 45% DTI for Non-STM to STM transactions.
Starting yesterday Wells wholesale will no longer accept incomplete GFEs. "Wells Fargo will immediately cancel a registration for the following GFE errors effective Sept. 1: The Originator section is incomplete. The Important Dates section is incomplete. The "Summary of your loan section" is incomplete. Etc. Wells is also adopting the FHA's CLTV changes for requirements on No Cash-Out Rate/Term Refinance transactions. Lastly, and with a nod toward PACE loans, Wells' wholesale Wells Fargo Home Mortgage does not allow origination of loans that will be subordinate to other liens, with the exception of specific liens created by taxing authorities. "Acceptable senior liens include: Liens for real estate tax or other property related taxes that are not yet due. Special assessments paid through real estate taxes on properties that benefit from municipal improvement."
RMIC announced that it is restoring eligibility for 2 Unit Properties after 11/1 and announcing upcoming premium rate changes. "Loans that meet the following criteria will be eligible: Level 1 Markets only, maximum 90% LTV/CLTV, minimum 700 FICO, maximum $533,850 loan amount, purchase and rate/term refinance, minimum six (6) months reserves, retail only; HFA/Affordable Housing, A-Minus, condo, co-op, second home, and construction-permanent loans are ineligible. A new rate adjustment will apply to all 2 Unit Properties: 0.25% for monthly and annual premium loans and 1.25% for most single premium loans. RMIC is increasing its Monthlies/ZIP Monthlies premium rates for 95.01-97% LTV loans and for 90.01-95% LTV loans with FICO scores from 680-699.
Optimal Blue reported that Flagstar Correspondent has posted an update to its guidelines which applies to their Agency LIBOR ARMs product line(s).
Astoria Federal, eliminated its IO loans, but it revised some other guidelines in a positive manner, such as lower reserve requirements and increased cash-out LTV's on a national level, along with increased LTV and higher loan limits that apply to selected counties in NY, CT, and MA. For example, in some counties Astoria will lend as high as $2.5 million and go to 60% LTV/CLTV Purchase and Rate/Term Refinance, 50% LTV/CLTV Cash Out Refinance - (Reduce LTV/CLTV by 10% for Condo Units). In some areas it will go to $1.5 million and 75% LTV/CLTV Purchase and Rate/Term Refinance, 80% for $1 million (70% for cash out refi's). Astoria "Cash Out LTV and Limits (all states up to $1,000,000), maximum LTV is now 70%, maximum cash out of $250,000 at 60% LTV or less, maximum cash out of $100,000 at 61% - 70% LTV." Astoria also tweaked its reserve requirements along with its co-op LTV's in New York. Astoria's a little off the beaten correspondent investor path, so contact Randy Plankey at email@example.com for more information.
AmTrust reminded their broker clients that AmTrust expects them to conform to the licensing laws of the states they're originating loans in. "Consequently, any loan registered in a state where your company is either not licensed or improperly licensed will not be funded by AmTrust. We will not allow de minius exemptions to be used on any loans funded by AmTrust. You represent and warrant that your company 'is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and is duly licensed, qualified and in good standing in each Mortgaged Property State in which Mortgaged Property securing a Mortgage Loan Registered by your company is located."
BB&T has suspended its FHA and VA ARM product lines.
Silvergate Bank in California reminds lenders nationwide that it is welcoming warehouse clients. Contact Elaine at firstname.lastname@example.org.
U.S. Bank Home Mortgage Wholesale Division is making changes to the Condominium Policies and Questionnaires following the changes Freddie made. For condos, USB instituted "The removal of Right of First Refusal for Established and Streamline Review. "Please note that any Established project that was declined strictly for Right of First Refusal may be submitted to Project Approval Department again for reconsideration" with required documents. "The Right of First Refusal still applies to all 2-4 unit projects, Detached Projects, and New projects or if the unit (regardless of project type) is being financed is an investment property."
Can one day of data really change the trend in interest rates? Probably not, but yesterday fixed income prices fell as we saw some surprisingly strong U.S. and Chinese manufacturing data (the ISM and China PMI reports) and ignored the weak ADP and Construction Spending news. 30-yr Treasury bonds dropped about 2.5 points, the 10-yr worsened by almost a point moving up to 258%, and stocks improved. MBS prices on the $3.5 billion that were sold closed lower from .5 to .125, depending on coupon, and investor rate changes were flying.
One evening a husband, thinking he was being funny, said to his wife, "Perhaps we should start washing your clothes in 'Slim Fast'. Maybe it would take a few inches off of your rump."
His wife was not amused, and decided that she simply couldn't let such a comment go unrewarded.
The next morning the husband took a pair of underwear out of his drawer.
"What the heck is this?" he said to himself as a little "dust' cloud appeared when he shook them out.
"April", he hollered into the bathroom, "Why did you put talcum powder in my underwear?"
She replied with a snicker. "It's not talcum powder - it's 'Miracle Grow'!"