The purpose of the memo is to clarify the documentation requirements in
circumstances where the borrower is required to bring funds to closing for
payoff of liens, closing costs, down payment, short-pays, etc.
All required funds for the borrower’s investment in the property, either to
purchase a new property or to payoff existing liens and closing costs on
current residence, must be verified and documented.
Prospective mortgagors must use their own money (money obtained from
sale of assets, and/or sale of current home) or gift for the required monetary
investment.
Documentation Requirements:
The documentation requirements are as follows:
A. Borrower providing funds:
1. Checking/Savings Account
The following may be used to verify savings and checking accounts1:
• Purchase - An original verification of deposit, along with the most
recent bank statement (all pages, stamped certified true copy) OR
the three most recent and consecutive original bank statement(s) (all
pages, stamped certified true copy), belonging to the borrower, which
cover the most recent three-month period and previous month’s
balance. Cash on hand is not allowed.
• Refinance - The most recent bank statement (all pages, stamped
certified true copy) , belonging to the borrower, which covers the
most recent one-month period and previous month’s balance. Cash
on hand is not allowed.
If there is a large increase in an account, or the account was opened recently,
the lender must obtain a credible explanation of the source of those funds. A
large deposit is defined as a deposit that exceeds borrower’s monthly income
or customary monthly deposits.
2. 401K
If the borrower is obtaining money from their 401K, the following documents
are required:
• Most recent quarterly statement (all pages).
• Proof of withdrawal from 401K.
• Copy of the Cashiers check at closing.
3. Stocks, Bonds and Mutual Funds
Verify existence of stock/bond/mutual fund via
• Current statement from stockbroker or financial institution, OR
• Photocopies of stock/bond certificate with updated newspaper stock
list.
• Stock/bond certificate must be reduced in size when photocopied and
the word "COPY" must be written or stamped across the face of the
copied certificate.
• Verify receipt of funds realized from sale/liquidation.
4. Proceeds from Sale of Existing Home
• A copy of the HUD-1, Purchase Contract executed by all parties and
cashiers or certified check bearing the name of the borrower can be
used to verify funds from the sale of a home.
• A wire transfer statement showing Settlement Agent as sender and
Borrower as recipient can also be used.
B. Borrower receiving partial or total funds as a Gift:
1. Copy of donor check made out to our borrower. If the donor makes check out
to the Closing Agent (which is not recommended), a copy of the gift check is
required and funds should be certified.
2. Proof that funds were deposited into our borrower’s account
3. Proof that borrower has the required additional funds, if applicable. (if partial
gift received)
4. Gift Letter/Affidavit from donor containing the following information:
a) The dollar amount of the gift
b) Name of the donor
c) The donor's signature
d) The donor’s address
e) The donor’s telephone number,
f) The donor’s relationship to the borrower (must be a family member)
g) The name of the borrower
h) The borrower's signature(s)
i) The letter must state that no repayment is required.
j) Language asserting that the funds were not made available to the donor from
any person or entity with an interest in the sale of the property.
k) Statement from donor that funds were gifted to our borrower to go towards
this Reverse Mortgage transaction.
Note: Gifts of Equity are not permitted.
Friday, July 31, 2009
New Disclosure Rules on Fixed HECM's
There are changes to the disclosure rules on fixed rates products. Since WSB provides you with the required documents we will take care of this but you need to let your clients know they will be getting disclosures several times between the time you take the application and the time we close the loan.
Here are some of the issues:
The questions and answers below have been compiled to help you better understand the Mortgage Disclosure Improvement ACT (MDIA).
Q. When do the MDIA rules go into effect?
A. The new rules are effective for applications dated on or after July 30, 2009.
Q. How does the new Mortgage Disclosure Improvement Act impact applications taken/received prior to July 30, 2009?
A. Applications with a property address taken/received prior to July 30, 2009 are not impacted by MDIA.
Q. What is the effective date for wholesale applications?
A. The effective date is the date of broker’s application. MLHL will not be required to provide the initial TIL for MDIA compliance for applications received by brokers prior to 07/30/09. However, all applications received prior to 07/30/09 by the broker must close on or before 09/30/09.
Q. Does MDIA apply to purchases and refinance transactions?
A. Yes, the same rules apply to both.
Q. Does MDIA apply to a HECM ARM?
A. No. MDIA is only applicable to Closed-End transactions. Currently, the HECM Fixed is the only Closed-End product offered by MLHL.
Q. Who has to receive the initial or corrected Truth-in-Lending Disclosure Statement?
A. The initial Truth In Lending Disclosure Statement must be provided to all buyers(s) (purchase transaction) AND all owner(s) of record in title to the subject property (refinance transaction) at each individual applicant/owner's mailing address, (delivered or placed in the mail).
Q. If owners of record are transferring interest of property, are they required by MDIA to receive initial and re-disclosed TIL’s?
A. No.
Q. If a party to the transaction is relinquishing ownership to the property, must a Truth-in-Lending disclosure be provided to them?
A. No.
Q. How do you determine when a borrower has actually received the Initial or corrected Truth-in-Lending?
A. A TIL is considered to be received by the borrower (3) three business days after delivery regardless of the method of delivery with the exception of face-to-face hand delivery. (Regular mail, overnight mail, courier, electronic transmission all use (3) business days.) The TIL is considered received the same day it is delivered for face- to- face hand delivery as long as a copy of the signed disclosure dated the same day as delivery is in the file.
Q. How do you determine when the (3) business day waiting period begins?
A. For all delivery methods, except face-to-face hand delivery, the waiting period begins three business days after delivery. Face- to- face delivery is only allowed on an exception basis and in these cases, the waiting period begins immediately as long as a copy of the signed disclosure dated the same day as delivery is in the file.
Q. How long after receipt of the initial TIL (early disclosures) do we have to wait to close a loan?
A. MDIA requires a (7) seven business day waiting period after the early disclosures are delivered or placed in the mail before a closing can occur. Therefore, closing may occur on the seventh business day, as long as there are no changes to the loan terms that effect the APR by .125% or more.
Q. How do I determine if a corrected TIL is required?
A. To determine if a corrected TIL is required
· Compare the APR on the last TIL provided to the borrower to the APR now – or-
· Complete the Truth-In-Lending Compliance Worksheet (completion of this form is mandatory prior to closing)
If the APR is over or under by .125% (1/8th of 1%), a corrected TIL is required. If the corrected TIL is mailed, the closing can occur on or after the 6th business day after the corrected TIL is mailed to all borrowers. If the corrected TIL is delivered in person, the closing may occur on or after the 3rd business day after delivery.
Q. Should I re-disclose a corrected TIL more than once?
A. A corrected TIL is required when the APR changes by more than .125% (1/8 of 1%). The closing may occur on or after the 6th business day after the corrected TIL is mailed to all borrowers.
Q. What things can cause the APR to change?
A. If fees change (up or down) or the initial rate used to disclose the loan is different than the locked rate at closing or the loan amount changes, the APR will be impacted. However, a corrected TIL is only required if the APR changes by more than 1/8th of 1% or more.
Q. How much of a change to the GFE Fees does it take to effect the APR by more than 1/8 of 1%?
A. It depends on the loan amount. For instance, on a $300,000 value it takes about a $3,500 increase or decrease in fees to change the APR. On a $150,000 value, it takes about $1,600.
Q. If a corrected TIL is required, how long after receipt of the corrected TIL do we have to wait to close a loan?
A. MDIA requires a (3) three business day waiting period after borrower receipt of the corrected TIL before a closing can occur. Therefore, closing may occur anytime on the third business day after receipt, as long as the (7) seven business days waiting period has also expired.
Q. Can a corrected TIL be sent with-in the (7) seven business day waiting period from when the initial disclosures are issued?
A. Yes, the required re-disclosure can be sent within the first (7) seven day waiting period.
Q. What is considered a business day?
A. A business day is considered “All days except Sundays and designated federal holidays.”
Q. Can loan documents be printed prior to the expiration of the mandatory waiting periods?
A. Yes, but the closing date must be after waiting period has expired. The date closing documents are executed is the key.
Q. Is the (3) three business day right of rescission still in effect?
A. Yes, the right of rescission is still in effect for refinances and certain purchase transactions. The loan can close (7) seven business days after any TIL re-disclosure is issued, then the right of rescission period begins. The loan can fund after the rescission period expires.
Q. What if the broker collects an appraisal fee prior to the mandatory waiting period on an application taken by the broker after 07/30/09?
A. In order for the loan to close, any fee collected prior to the mandatory waiting period cannot be collected from the borrower or charged to the borrower in any form of a fee on the HUD.
Q. Can the broker pay for the appraisal prior to the mandatory waiting period?
A. No, the broker cannot pay for the appraisal until after the mandatory waiting period.
Q. For wholesale transactions, if the application is dated on or after July 30th, but the appraisal was ordered prior to July 30th, do MDIA mandatory waiting periods apply?
A. If the appraisal was ordered prior to July 30th and the loan closes on or before September 2, 2009, MDIA mandatory waiting periods do not apply.
Note
And, the term, ‘business days,’ excludes Sundays and federal holidays.
Thursday, July 30, 2009
Interest Rates for 7-30-2009
30 year fixed conventional 5.0 with 1 point origination
30 year fixed conventional 5.25 with no origination
15 year fixed conventional 4.50 with 1 point origination
15 year fixed conventional 4. 75 with no origination
30 year fixed FHA 5.00 with 1 point origination
30 year fixed FHA 5.375 with no origination
“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an
advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home, a maximum loan amount of $417,000 and establishing an impound/escrow account."
Monday, July 27, 2009
Manufactured Home Checklist
Manufactured Home Checklist for Reverse Mortgages
All of the following items MUST be satisfied prior to loan funding:
Built after June 15, 1976.No exceptions are allowed.
Engineer’s Certification Report. Must state property meets the guidelines published in the Permanent Foundations Guide for Manufactured Housing, dated September 1996.
Structural modifications or additions. Engineer’s report indicating that the structural changes or additions to the property were made in accordance with the HUD Manufactured Home Construction and Safety Standards
The home has never moved off original site. The manufactured unit must not have been installed or occupied previously at any other site or location. Manufactured units may be moved only from the manufacturer’s or dealer’s lot to the site on which the unit will be insured.
All HUD tags are indicated. All manufactured homes must have an affixed HUD label (tag) located on the outside of the home. If the home is a multi-wide unit, each unit must have a label. For assistance in obtaining information for a request of label verification, contact Pam Billhart at (703) 481-2010 or fax at (703) 437-6432 for help on finding HUD tags. See IBTS form attached.
Taxed as Real Property. The manufactured home must be taxed as real property. Also Title should provide the manufactured home endorsement applicable to subject property’s state: CLTA 116.5, ALTA 7, FL 7, TX T-31.
If the title reflects title elimination has been recorded on the manufactured home and the tax section of title verifies it as being taxed as real property, no additional conditions are required.
However, if the manufactured home is not taxed as real property the Title Company must provide the recorded title elimination, evidence property is being taxed as real property and applicable endorsement. In some states, title may not be purged prior to paying off the lien attached to it. In this case please provide copy of front and back of title to be purged at closing to verify liens attached.
Home is in a Flood Zone. The finished grade elevation beneath the manufactured home, or if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100 year return frequency flood elevation. A LOMA/LOMR or elevation certification showing finished grade elevation below the manufactured home is at or above the established 100 year flood plain will need to be provided. *NOTE- Flood insurance is still required regardless if property is above the 100 year Flood plain.
Condominium Project. All manufactured homes located in condominium complexes must be approved by HUD’s Review and Approval (HRAP) process. Appraisal form 1073 should be used for these properties. For more information for this approval process, please see Handbook 4150.1 Chapter 11.
New Construction Manufactured Housing. New Construction Manufactured homes are required to meet all of these guidelines, and are subject to additional guidelines. For properties delivered to a site within the past 1 year the following additional documentation will be required:
o NPCA 99a and 99b Soil Treatment
o Certificate of Occupancy
o Manufacturer’s Warranty
o Document purchase price and delivery/setup expense (sales contract)
o Additional documentation may be required at UW discretion.
All of the following items MUST be satisfied prior to loan funding:
Built after June 15, 1976.No exceptions are allowed.
Engineer’s Certification Report. Must state property meets the guidelines published in the Permanent Foundations Guide for Manufactured Housing, dated September 1996.
Structural modifications or additions. Engineer’s report indicating that the structural changes or additions to the property were made in accordance with the HUD Manufactured Home Construction and Safety Standards
The home has never moved off original site. The manufactured unit must not have been installed or occupied previously at any other site or location. Manufactured units may be moved only from the manufacturer’s or dealer’s lot to the site on which the unit will be insured.
All HUD tags are indicated. All manufactured homes must have an affixed HUD label (tag) located on the outside of the home. If the home is a multi-wide unit, each unit must have a label. For assistance in obtaining information for a request of label verification, contact Pam Billhart at (703) 481-2010 or fax at (703) 437-6432 for help on finding HUD tags. See IBTS form attached.
Taxed as Real Property. The manufactured home must be taxed as real property. Also Title should provide the manufactured home endorsement applicable to subject property’s state: CLTA 116.5, ALTA 7, FL 7, TX T-31.
If the title reflects title elimination has been recorded on the manufactured home and the tax section of title verifies it as being taxed as real property, no additional conditions are required.
However, if the manufactured home is not taxed as real property the Title Company must provide the recorded title elimination, evidence property is being taxed as real property and applicable endorsement. In some states, title may not be purged prior to paying off the lien attached to it. In this case please provide copy of front and back of title to be purged at closing to verify liens attached.
Home is in a Flood Zone. The finished grade elevation beneath the manufactured home, or if a basement is used, the lowest finished exterior grade adjacent to the perimeter enclosure, shall be at or above the 100 year return frequency flood elevation. A LOMA/LOMR or elevation certification showing finished grade elevation below the manufactured home is at or above the established 100 year flood plain will need to be provided. *NOTE- Flood insurance is still required regardless if property is above the 100 year Flood plain.
Condominium Project. All manufactured homes located in condominium complexes must be approved by HUD’s Review and Approval (HRAP) process. Appraisal form 1073 should be used for these properties. For more information for this approval process, please see Handbook 4150.1 Chapter 11.
New Construction Manufactured Housing. New Construction Manufactured homes are required to meet all of these guidelines, and are subject to additional guidelines. For properties delivered to a site within the past 1 year the following additional documentation will be required:
o NPCA 99a and 99b Soil Treatment
o Certificate of Occupancy
o Manufacturer’s Warranty
o Document purchase price and delivery/setup expense (sales contract)
o Additional documentation may be required at UW discretion.
Sunday, July 26, 2009
Service is the Key to Success
"The people who receive the most are the ones who give the most. This is true of individuals, but also for businesses. If the focus is on how we can give the absolute best service, then the profits will follow. If a company is only focused on profits, they miss the big picture and will always be scurrying for business instead of having clients chasing them."
Susan Bagyura, Author of The Visionary Leader: How To Inspire Success From The Top Down
This is so true for the Reverse Mortgage Business!
Susan Bagyura, Author of The Visionary Leader: How To Inspire Success From The Top Down
This is so true for the Reverse Mortgage Business!
Thursday, July 23, 2009
Thank Ed Wood for this one
A New Orleans lawyer sought an FHA loan for a client who lost his house inHurricane Katrina and wanted to rebuild. He was told the loan would begranted if he could prove satisfactory title to the parcel of property beingoffered as collateral. The title to the property dated back to 1803, whichtook the Lawyer three months to track down.After sending the information to the FHA, he received the following reply.
(Actual letter)"Upon review of your letter adjoining your client's loan application, wenote that the request is supported by an Abstract of Title. While wecompliment the able manner in which you have prepared and presented theapplication, we must point out that you have only cleared title to theproposed collateral property back to 1803. Before final approval can beaccorded, it will be necessary to clear the title back to its origin."Annoyed, the lawyer responded as follows.
(Actual Letter)"Your letter regarding title in Case No. 189156 has been received. I notethat you wish to have title extended further than the 194 years covered bythe present application. I was unaware that any educated person in thiscountry, particularly those working in the property area, would not knowthat Louisiana was purchased, by the U.S., from France in 1803, the year oforigin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the landprior to U.S. ownership was obtained from France, which had acquired it byRight of Conquest from Spain. The land came into the possession of Spain byRight of Discovery made in the year 1492 by a sea captain named ChristopherColumbus, who had been granted the privilege of seeking a new route to Indiaby the Spanish monarch, Isabella. The good queen, Isabella, being a piouswoman and almost as careful about titles as the FHA, took the precaution ofsecuring the blessing of the Pope before she sold her jewels to financeColumbus' expedition.Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, theSon of God, and God, it is commonly accepted, created this world. Therefore,I believe it is safe to presume that God also made that part of the worldcalled Louisiana. God, therefore, would be the owner of origin and Hisorigins date back to before the beginning of time, the world as we know itand the FHA.I hope you find God's original claim to be satisfactory.Now, may we have our damn loan?"
He got the loan!
(Actual letter)"Upon review of your letter adjoining your client's loan application, wenote that the request is supported by an Abstract of Title. While wecompliment the able manner in which you have prepared and presented theapplication, we must point out that you have only cleared title to theproposed collateral property back to 1803. Before final approval can beaccorded, it will be necessary to clear the title back to its origin."Annoyed, the lawyer responded as follows.
(Actual Letter)"Your letter regarding title in Case No. 189156 has been received. I notethat you wish to have title extended further than the 194 years covered bythe present application. I was unaware that any educated person in thiscountry, particularly those working in the property area, would not knowthat Louisiana was purchased, by the U.S., from France in 1803, the year oforigin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the landprior to U.S. ownership was obtained from France, which had acquired it byRight of Conquest from Spain. The land came into the possession of Spain byRight of Discovery made in the year 1492 by a sea captain named ChristopherColumbus, who had been granted the privilege of seeking a new route to Indiaby the Spanish monarch, Isabella. The good queen, Isabella, being a piouswoman and almost as careful about titles as the FHA, took the precaution ofsecuring the blessing of the Pope before she sold her jewels to financeColumbus' expedition.Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, theSon of God, and God, it is commonly accepted, created this world. Therefore,I believe it is safe to presume that God also made that part of the worldcalled Louisiana. God, therefore, would be the owner of origin and Hisorigins date back to before the beginning of time, the world as we know itand the FHA.I hope you find God's original claim to be satisfactory.Now, may we have our damn loan?"
He got the loan!
Tuesday, July 21, 2009
Interest Rates for 7-21-2009
30 year fixed conventional 5.0 with 1 point origination
30 year fixed conventional 5.25 with no origination
15 year fixed conventional 4.50 with 1 point origination
15 year fixed conventional 4. 75 with no origination
30 year fixed FHA 5.00 with 1 point origination
30 year fixed FHA 5.375 with no origination
Monday, July 20, 2009
Interest Rates for 7-20-2009
30 year fixed conventional 5.125 with 1 point origination
“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."
30 year fixed conventional 5.375 with no origination
15 year fixed conventional 4.675 with 1.25 point origination
15 year fixed conventional 4.875 with no origination
30 year fixed FHA 5.25 with 1 point origination
30 year fixed FHA 5.50 with no origination
“All rates and programs are subject to change without notice. This information is intended for mortgage professionals only and is not an advertisement to extend consumer credit as defined by REGZ. The above rate represents a consumer on a rate and term refinance transaction with a credit score above 720 with 40% or more equity in their home and establishing an impound/escrow account."
Friday, July 17, 2009
FREE LEADS!
WSB Mortgage Services, Inc. is giving away Lead Lists!
Here is how it works:
For every complete Loan you submit from July 16th 2009 to August 14th 2009 we will give you a Lead List of up to 500 prospects in your area. The Loan must be a complete package including HUD Counseling Certificate on Reverse Mortgages.
For every Direct Mail order you purchase from July 16th 2009 to August 14th we will give you a Lead List of up to 500 prospects as well.
You could have thousands of prospects to call at no cost to you!
Congratulations to Barry Fine for writing 12 Reverse Mortgages in just over 30 days from calling his list of 1,000 seniors.
Even if we look the least amount of money you can make on Reverse Mortgages Barry would make around $12,000.00, not a bad month. Those of you in higher home value areas would make over $32,000 for those 12 deals.
The Lead Lists are 15 cents per name and we can get you a list in a day. Are you ready to get making some money? Get a list today and earn some free lists for your production.
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