Recent FHA Changes & Updates

Written By: Stacey Sprain,
Certified Ambassador Loan Processor (CALP)

Mortgagee Letter 2008-15
As of the time of this writing, HUD hadn't officially notified their email list members of Mortgagee Letter 2008-15 but it was posted for viewing on HUD’s website last Wednesday morning. The date of the Mortgagee Letter shows May 22nd.

ML 2008-15 announces a new HUD 92900-LT form that is created to replace the existing Mortgage Credit Analysis forms- the HUD 92900-WS and HUD 92900-PUR. The new form mirrors Fannie Mae’s 1008 Loan Transmittal Summary.

The thing that I find interesting about this form is that it doesn’t include any of the calculations currently used to document maximum mortgage amount calculations like the existing MCAW forms do. Of course HUD is careful to mention in the Mortgagee Letter that “Lenders are reminded that they are still responsible for calculating the mortgage amount in accordance with existing FHA statutory requirements and documenting that calculation in the loan origination file.”

This should make for some good fun as I can tell you right now 80% of the MCAWs I see now aren’t correct and people cannot understand how to calculate max mortgages properly. Now what will they do? I don’t see a worksheet included with the Mortgagee Letter to demonstrate how the average Joe needs to calculate maximum mortgage amounts which would be a nice offering to coincide with the form change! HUD people- are you paying attention?

The new form HUD 92900-LT can be used starting June 9th and will be required for all loan applications dated on or after October 1st. Note that the current HUD 92900-WS will continue to be used for 203k maximum mortgage calculations.

In addition to the new HUD 92900-LT, HUD has also revised HUD form 92900-A which was a great idea. The form now includes clear signature lines for the borrowers on page two, section four which are often missed with the current format. The new form may be used effective immediately but will be required for use for all applications dated on or after October 1st.

To view a complete copy Mortgagee Letter 2008-15, the new HUD 92900-LT and the revised HUD 92900-a, go to: Click Here>>.

Mortgagee Letter 2008-13
HUD issued ML 2008-13 on May 7th. This Mortgagee Letter provided some much-needed expansion to the FHASecure program that is in effect temporarily until December 31st. The new expansion perimeters allow a bit more flexibility to borrowers who have suffered financial difficulties as the result of existing adjustable rate mortgage loans. Along with added credit flexibility, the expansion offers an up front mortgage insurance premium of 2.25% versus the current 1.5% and requires monthly mortgage insurance at a rate of .55% versus the current .50%. HUD has evaluated and determined that the increased risks of taking on these loans through FHASecure refinances warrants higher insurance premiums.

In addition, under the expanded criteria, borrowers may utilize write downs, new subordinate financing, re-subordinations and/or loan modifications to existing second liens, and may even make use of specific “rescue funding” offered through local or state non-profit organizations. The expanded criteria are not effective until July 14th.

To view a copy of Mortgagee Letter 2008-13 in its entirety, go to: Click Here>>.

About the Writer. As one of NAMP's volunteer writers, Stacey Sprain is currently a NAMP member in good standing and is a NAMP Certified Ambassador Loan Processor (CALP). If you would like to become a volunteer writer for NAMP, please email us at: blog@mortgageprocessor.org.