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New “Quality” Guidelines for Fannie Mae Mortgages

I recently received the following doc from William Raveis Mortgage Company* regarding the new guidelines that went into effect on 6/1/20.

As you’ll see there are some new pieces of documentation that will be required for all FNMA loans. These are being adopted by Secondary Market Investors.

This does not necessarily mean that it will be harder to get through the mortgage process.  It does mean that you should be very vigilant in discussing ALL aspects of getting your loan with your lender.   Being prepared lessens the chances of last-minute surprises.

*William Raveis Mortgage Company is an affiliated company owned by the brokerage I work for – William Raveis Real Estate.

——

Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

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Home Valuation Code of Conduct

May 6, 2009 1 comment

Effective on May 1, 2009 there is yet a new wrinkle involved in buying a home – specifically in the process of acquiring a mortgage. It is the HOME VALUATION CODE OF CONDUCT.   Although just now put into effect, the plan was developed in March and April of 2008.

The rationale behind this is to protect consumers and to help prevent inaccurate home appraisals that could over value a home which some believe to have been a factor in the current housing slump. Not everyone agrees that this will be of value, in fact, many believe it could slow down the process, and could even prevent some folks from getting loans that they otherwise might qualify for.

The code has a number of components but the big “new” thing is that in a lender’s organization the “Loan Production Staff” will not be involved in the selection of an appraiser. Basically it is creating a stronger division between the lender and the appraiser.  The appraisal will be ordered and the appraiser selected by a new entity called an Appraisal Management Company  – AMC.   Your loan officer, will have to pick up the phone and contact the AMC who will then select and order an appraisal.  Prior to HVCC, the  loan officer would order the appraisal directly from a local appraisal company.

The fear (isn’t everything based on fear these days) is that the appraiser, who is an independently licensed professional, could, in theory, be influenced by a lender to place a value on a home that is higher than it should be in order to match the selling price – thus making for a smoother loan approval process but, if this happened, could put a home buyer into a home that he purchased higher than the market value.

There is no evidence of any widespread fraud in the marketplace – this is just one of the new pieces of tighter control of the mortgage market being put in play. Whether we agree with it or not, it is now a factor in the process. You can read the details of the HVCC by clicking here.

Loan Modification for People NOT behind on their payments

Is there such a thing?  Can you get some assistance on your mortgage simply because the value of your house has depreciated to a level that is less than what you owe?

The answer is a definitive “maybe!” – and might be worth checking out. There are two avenues that might prove fruitful. Both of these can researched by contacting your lender.

Here’s the scoop.

If your mortgage is backed by Fannie Mae or Freddie Mac, there is a program available to lenders enabling them to work with borrowers on loan modifications that will bring the principal amount of the mortgage within the confines of the current market value of the home. It is up to the individual lenders to utilize this program or not and to set the basic eligibility. There is no assurance that your lender will do this but – some are doing it and it could be worth your time to contact your lender to find out how this might apply to you.

The second option that could come into play depends on whether or not you have PMI (Private Mortgage Insurance) on your loan. It also depends on which PMI company your lender uses.  Some PMI companies are offering homeowners a program that will help them out in a situation where they owe more than the value of their home.  There are a few different ways they can help but – again, it will depend on the specific PMI company that you have.  You can find this information out by contacting your lender.

I have to reiterate again that the availability of both of these avenues is dependent on who your lender and your PMI company is and what their policy dictates.  The thing to keep in mind is that you don’t necessarily have to be behind to get help.  The theory is that the lenders and the insurance companies sometimes feel that it is in their best interest to help the home owner a little bit now, rather than incur the cost of a possible foreclosure down the line.

NAR Urges Passage of 4-Point Housing Stimulus Plan and Return of Congress for Lame-Duck Session

October 16, 2008 Leave a comment

The National Association of Realtors® will offer a four-point legislative plan to reinvigorate the housing market, calling on Congress to act during a lame-duck session. NAR believes the plan will give a boost to the economy and help to calm jittery potential homebuyers.

The plan features such consumer-driven provisions as eliminating the repayment of the first-time homebuyer tax credit and expanding it to all homebuyers, making higher mortgage loan limits permanent, pushing banks to extend credit to Main Street, and prohibiting banks from entering into real estate.

“Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible,” said NAR President Richard F. Gaylord. “It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans. We are asking Congress to act right away.”

Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said NAR, as the leading advocate for homeownership and private property rights, believes it is important for Congress to address the concerns and fears of America’s families, much in the way it has addressed Wall Street turbulence. “Housing is and has always been a good, long-term investment and a family’s primary step towards accumulating wealth,” Gaylord said.

NAR recommends Congress pass new housing stimulus legislation that includes the following priorities:

1. Remove the requirement in the current law that first-time homebuyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.

2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for homebuyers in high cost areas.

3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:

• Extend credit down to Main Street, making credit more available to consumers and small businesses;

• Expedite the process for short sales;

• Expedite the resolution of banks’ real estate owned (REOs) properties.

4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

Gaylord said that NAR will strongly pursue those proposals and is calling on Congress to return to enact housing stimulus legislation in a lame-duck session after the national elections in November.

Copyright National Association of REALTORS®, Reprinted with permission.