2,3 or 4 unit FHA

Wanna purchase a 2,3, or 4 Unit property FHA... Not a Shot... At least not any more... If an Investor can't verify Income, doesn't matter if it's personal income, Non - owner income, and now...Rental Income... If it is not claimed on Tax Returns and verifiable thru a 4506T... your done! Believe it or not you can do a refi, but not a purchase... Proposed leases are not acceptable anymore.

Only way to use rental income is if it has been claimed by the borrower on their tax returns for the past 2 yrs now... (and this income is of course... verifiable thru a 4506T...

FICO scores and the FHA

The aftermath of the credit crisis is going to have some serious implications on the FICO scores of those getting FHA insured loans. These changes are expected to come in to force in the summer of 2010 and could mean different things to different people as it relates to the cost and affordability of mortgages and most important as it relates to this post - the credit worthiness of the borrower.

• Higher insurance requirements – this change requires that an upfront mortgage insurance premium required of a borrower would be raised from 1.75% to 2.25%.
• Larger down payment – only those borrowers with FICO scores about 580 would qualify for the low 3.5% down payment. Those borrowers with a score lower than 580 would need a down payment of at least 10%.
• Lower seller concessions – this is the money returned to a borrower in exchange for agreeing to a higher home sales price. This seller concession would drop from 6% to 3%.
• Higher minimum FICO score requirements – in addition to needing a minimum FICO score to qualify for the lower down payment option, it may be difficult for a borrower to even begin the process with FICO scores below 600. This higher FICO score requirement is not limited to FHA loans, but is being adopted throughout the mortgage industry; what was once a fair FICO score may now only be considered a poor score.

PrivoCorp (www.privocorp.com) is a large (and fast) processor of FHA loans - but we have not seen a whole lot of scores around the 580's. Probably an indicator of the type of clients we work with. Anyway, these are steps in the right direction - to get loans to deserving people at lower costs. Am sure these new changes will effect some genuine folks who have seen their credit score go down due to the down turn in the economy and consequent unemployment, but unfortunately, that's the way the world works.

Top FHA Lenders - Q3, 2009

With TBW out of the picture, there is a gaping hole at the top of the market share pie for FHA mortgages originated by mortgage brokers. According to Inside Mortgage Finance's new special report "FHA Market Profile: First Half 2009," TBW was by far the largest wholesale purchaser of FHA mortgages in the first six months of this year with $5.37 billion in volume.

Wells Fargo was the second largest with $4.24 billion in FHA mortgages purchased from brokers. In third place was Flagstar Bank with $3.07 billion in FHA broker business, followed by MetLife Bank in fourth place with $2.37 billion in volume. Rounding out the top five FHA wholesalers in the first half was Bank of America with $1.92 billion in business.

PrivoCorp has processed loans for all the above lenders having done the maximum work with TBW, followed by MetLife, Wells Fargo, Bank of America and finally Flagstar in that order.

MBA: Mortgage applications rise as interest rates fall

According to the Mortgage Bankers Association of America, a decrease in interest rates boosted mortgage applications during the week ended July 31.

<< Here is some information from the Nashville Business Journal >>

With the average 30-year fixed rate falling to 5.17 percent, the number of total loan applications rose 4.4 percent over the previous week, according to the Mortgage Bankers Association.

The number of people refinancing grew by 7.2 percent over the previous week, and is up 35 percent above its recent low at the end of June.

Overall, the number of people refinancing loans made up 54.2 percent of total mortgage applications, up from 52.6 in the previous week. However, the percentage of adjustable-rate loans refinanced dipped to 5.4 percent from 5.5 percent of the total activity.

The average interest rate for 15-year fixed-rate mortgages decreased to 4.6 percent from 4.75 percent, with points decreasing to 1 from 1.14.

The average interest rate for one-year ARMs increased to 6.67 percent from 6.66 percent, with points remaining unchanged, at 0.09.

>>

Its been a while since PrivoCorp has worked on ARMs for customers. It is not difficult to understand that given the rates mentioned above. PrivoCorp is one of the fastest processors of Conventional and FHA mortgages in the country.

Flash: FHA suspends TBW

According to an article in the Wall Street Journal, the Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures.

Also, BoA just released that they were @ 5 days on FHA refis and 3 days on FHA purchases. I guess it would not be too difficult to see where all the TBW loans are going to go!

We can only hope that TBW is able to extricate itself from this situation and continue to lend, or else the consequences may be far reaching as TBW was the 12th largest FHA lender in Q1 and Q2 of 2009.

Update on Underwriting Guidelines (Recently listed FHA/VA Properties)

Properties currently listed for sale are not eligible for FHA or VA refinances, whether fully qualifying rate/term, streamline, or cash out. Properties previously listed and then canceled, are eligible for refinance with the following loan-to-value guidance:

• Refinances, including fully qualifying rate/term and streamline: Maximum loan-to-value allowed.
• Cash out transactions: Maximum 70% loan-to-value if the listing was canceled within six months preceding the application date.

The following evidence must be provided to verify cancellation of the listing:

• The property’s listing history must be shown in the subject section of the appraisal;
• Documentation of canceled listing agreement;
• Evidence a search was made of the Multiple Listing Service (MLS); and
• The borrower’s confirmation of their intent to continue to occupy the subject property as their primary residence and a reasonable explanation for removing the house from the market.