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- RECORD-BREAKING WINTER CAN'T STOP MBS
- New RESPA FAQ
- Compliance
- Investor Updates
- Question of the Month
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| WINTER STORM DEBILITATES DC - No stopping MBS-ProClose |
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Record-breaking snowstorms ravaged the MidAtlantic Region this winter, closing the Federal government and even the MBA for several days. MBS-ProClose headquarters were hit hard in McLean, Virginia where more than 3 ft of snow fell; however, nothing prevents MBS from supporting our clients. Regardless of where the MBS staff holed up and dug out of, we were available to our clients through emergency phone lines and our new direct-dial phone numbers, making it easy to reach us, no matter where we worked. We continued to respond to emails, send information and updates and strive for our usual excellent service. Bad weather won't slow us down! |
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HUD released a new RESPA FAQ January 28, 2010. All new and updated items are listed in bold and are posted in our searchable ProClose Answers database. Updated and new topics include questions regarding document format, "changed circumstance," "important dates," appraisal fees and "written list" among others. Also entered into ProClose Answers are new questions and answers specifically on using the new HUD and GFE in our ProClose closing software. |
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Mortgagee Letters:
2010-02 January 21, 2010
FHA will collect an upfront mortgage insurance premium of 2.25% effective on FHA loans with a case number assigned on or after April 5, 2010. This increases premiums for purchase money and refinance transactions.
2010-03 January 21, 2010
HUD terminated a mortgagee's authorization to underwrite single-family loans in geographic areas where the lender has a high rate of early defaults and claims. Currently, HUD terminates only the loan origination approval authority of a mortgagee. Effective with this Mortgagee Letter, HUD will systematically review all Direct Endorsement (DE) underwriting mortgagee's defaults (loans 90 or more days delinquent) and claim rates on loans during the initial 24-months from the date of the commencement of the amortization. HUD, at its option, will exercise its authority to terminate the underwriting authority (authority) of DE mortgagees with excessive default and claim rates.
If a mortgagee's underwriting authorization with HUD is terminated, an appeals process with a 30-day deadline after receipt of the proposed termination notice exists. Any DE that is terminated may apply for a new authority no earlier than 6 months after the effective date of the termination, if the underlying causes for termination have been remedied.
VA provides RESPA and Fee Guidance
January 7, 2010, Veterans Affairs (VA) released Circular 26-10-01 providing guidance on the impact of RESPA and its rule on fees and charges for VA loans. The lender may charge the veteran a flat origination fee of up to one percent of the loan amount. The Interest Rate and Discount Disclosure Statement is no longer required as the new GFE and HUD-1 provide enough information to make this form unnecessary. See VA Circular 26-10-01 for more information on itemized fees and the origination statement.
New IDAHO Disclosure
According to Idaho Admin. Code §18.01.39, a "Notice of Financial Interest In Title Entity by Producer of Title Business" must be provided to the applicant at the time the sell and/or purchase contract is entered into. Per the code, a signed copy of the disclosure shall be maintained by the producer of title business and provided to the title entity prior to or simultaneously with, the placing or the order for a title insurance commitment or guarantee or escrow closing services. The title entity shall maintain a copy of said disclosure for a minimum period of five (5) years. MBS-ProClose added this form to our library as form ID4PC1.
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Numerous investors released follow up notices pertaining to VA Circular 26-09-19. Effective for loan approvals issued on or after January 1, 2010, the VA policy regarding acceptance of HUD/FHA approvals of condominium projects was rescinded and VA project review is required. Many are also following Fannie Mae's lead in no longer accepting FHA-approved condominium projects for conventional loans as posted in Fannie Mae's Announcement 09-37.
Bank of America
In a January 8, 2010 notice, Bank of America changed the maximum loan amount for non-conforming loan programs to $1,500,000 (previously eligible up to $3,000,000). The change was effective with locks taken on or after January 19, 2010. Loans locked prior to January 19, 2010 under previous guidelines will be honored through the lock expiration date.
CitiMortgage
Effective as of January 25, 2010 loan registrations, CitiMortgage discontinued their conventional 1-year LIBOR ARM product. The FHA 1-year ARM program is still in place.
CitiMortgage instilled some RESPA "check points" into their pre-purchase review process requiring correspondents to provide specific documents, without exception, in all loan packages for applications taken on or after January 1, 2010.
All such loan packages must include:
- The final GFE on the RESPA Rule's new form (initial GFE and any subsequent re-issued GFEs due to "changed circumstances");
- All documentation relating to any "changed circumstances" as defined in the RESPA Rule;
- The RESPA Rule's new version of the final HUD-1 Settlement Statement; and
- The final Itemization of Amount Financed (or a comparable document)
For more information, see CitiMortgage's 2010-02 Bulletin.
Flagstar Bank
In memo 10029, Flagstar reissued its policy of not funding or purchasing any loan that closes using a notary associated with the broker/correspondent. If a loan does close using a notary associated with the broker/correspondent, it must be re-closed with a non-associated notary before funding or purchase may occur. The exception to this policy applies for a Bank and Credit Union using a notary that is also an employee of their organization when closing an in-house loan.
SunTrust Mortgage
On or after April 1, 2010, all SunTrust Correspondents must be MERS members, able to register and transfer their loans through MERS. Use of the SunTrust MIN will not be acceptable, nor will the use of an assignment to SunTrust. If loans are closed using a non-MOM document, an assignment to MERS must be recorded and in the file before delivery for purchase.
SunTrust's Correspondent Closing Checklist Form COR 0013 (MBS Form ID AACER1) is updated with a MERS registration checkbox and is currently being revised in the MBS Forms Department. Our ProClose software is MERS ready with both MERS documents and ProMerge, our automated MERS loan registration direct connect. Visit the MERS website for more information on becoming a MERS member.
Wells Fargo
Beginning with loans delivered on and after February 22, 2010, a separate written itemization of fees from the HUD-1 settlement statement must be included in all files. This can be in the seller's own preferred format or as an Itemization of Amount Financed under Reg Z, Section 226.28c. Lenders are encouraged to include the form before the required February 22, 2010 date. Wells Fargo also updated their Loan Submission Summary (Form 1) (MBS Form ID AANFO1). This form is currently being modified in our MBS forms department.
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| Question of the Month (from HUD Letter): |
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Do I need to fill in the GFE Aggregation Type for each fee?
Answer
Yes. The type needs to be filled in for each fee so it will be represented in the proper section on the GFE and HUD-1 forms. Selecting the wrong type will lead to incorrect calculation of fee totals on both forms.
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