FHA News :: This Week’s Hot Topics

About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: blog@mortgageprocessor.org.

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Two items in particular stand out this week. As being the commonly asked questions I’ve had to jump in and answer.

1. Where can I get hard copies of the HUD Settlement Cost Booklet?

2. What will lenders require in regards to tax transcripts after the April 15th filing deadline date?

To answer the first question, HUD Settlement Cost Booklets (recently updated on 3/25/2010) are available for download at the RESPA website at
http://www.hud.gov/offices/hsg/ramh/res/settlement-cost-booklet03252010.cfm.

HUD has not made the booklets available for order from their online distribution center this year. However, I’m told that you may still call and order up to 100 booklets at no charge by calling HUD Customer Service at 1-800-767-7468. Beware however, that shipments may be delayed due to the recent booklet update. Be sure to ask for the approximate shipping time.

In regards to question number two, I don’t know about anyone else but I am just sick to death of even hearing mention of the “T word.” (transcripts). I don’t understand why everyone in mortgage land is having such a difficult time with these new requirements. It all comes down to common sense which should be no different than any other underwriting situation!

Within the past day, I’ve researched and contacted a number of the largest lenders and the consensus among them was this: If the borrower’s 2009 earnings were significantly higher than in previous years and the 2009 income is required for the borrower to qualify for the mortgage, transcripts are expected to accompany all other documentation to substantiate the income. If the borrower’s 2009 income is used to qualify and no transcripts are in the file when it goes to the lender for purchase, the lender may downgrade your income qualifications by tossing out the 2009 figures to go off of 2008 transcript income. This can cause non-saleable loan issues and significant purchasing delays.

So, what’s the trick to making the judgment calls on these situations? Use conservative qualifying, meaning the worst possible case qualifying you can in order to avoid the requirement for the 2009 transcript if it’s not yet available.

For borrower’s, who do not need the 2009 income increase to qualify, simply obtain copies of the 2009 W2s, a copy of the 2009 filed return or extension to file, evidence that IRS transcript is not yet available and substitute the 2008 transcript instead.

For you originators out there - If you send out email alerts or marketing communications to past customers, be sure to inform them of the need for their transcripts in most loan situations. Give them the heads up that they should not delay filing their 2009 returns if their intent is to refinance or purchase a home within the coming months. Make sure they are prepared and can be certain that their transcripts will be available from the IRS at the time of application or shortly thereafter. You’ll be saving them a world of frustration and potential closing date delays but giving them the information ahead of time!

Be sure to inform your realtor, builder and financial planning partners about the tax transcript requirements as well so that they can assist in preparing potential applicants for the tax transcript requirements! Your business partners will appreciate you keeping them informed and up-to-date on the underwriting policies and requirements that can affect your mutual interest clients!

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SOURCE: Published by NAMP® Publishing Group, a division of the National Association of Mortgage Processors (NAMP) (http://www.mortgageprocessor.org)