Mortgage Processing News in Mortgage Underwriting

Monday, October 13, 2014 - 2:30pm
Frankie Lacy
Calculating qualifying rental income is one of the more complex income calculations an underwriter can perform. This is particularly true when the borrower owns multiple investment properties. The challenge is determining when rental income can be used to qualify and, once income is calculated, reconciling the total debt ratio. Need Mortgage Training? CLICK HERE to Download Brochure --->> Rental...
Friday, September 19, 2014 - 2:33pm
Glenn Michaels
When underwriting FHA loans HUD reserves the rights to audit each and every loan file. If HUD believes that the underwriting of a loan file was not performed in accordance to their guidelines or if they see a material misrepresentation in a loan file they can and will require your company to indemnify against loss for that particular loan file. When HUD requests your company to indemnify against...
Friday, September 12, 2014 - 2:18pm
Frankie Lacy
There are several forms of credit documentation that underwriters examine to determine creditworthiness of the applicant. The most frequently discussed is the credit report. However, supplementary documentation can be just as illuminating as the primary report when reviewing the borrower’s credit profile. Need Mortgage Training? CLICK HERE to Download Brochure --->> Many times, the credit report...
Tuesday, September 2, 2014 - 6:30pm
Frankie Lacy
Fannie Mae, Freddie Mac, and USDA Rural Housing have all made extensive strides in 2014 to update and strengthen their automated underwriting engines. Much of this was in response to the finalized Ability to Repay and Qualified Mortgage rules from the CFPB (Consumer Financial Protection Bureau). The engines have been enhanced to identify more risk scenarios and assist underwriters with more...
Thursday, August 21, 2014 - 1:20pm
Glenn Michaels
As a mortgage underwriter, licensed mortgage loan originator and as a housing counselor it is amazing how many people do not understand the reverse mortgage program, HUD calls it the Home Equity Conversion Mortgage (HECM). Need Mortgage Training? CLICK HERE to Download Brochure --->> The senior citizens have their view point. The children of the senior citizens have their view point and even...
Friday, August 8, 2014 - 12:08pm
Glenn Michaels
Since the mortgage melt down the big push has been the Qualifying Mortgage (QM). Loans that fit the QM were most government mortgage programs (FHA, VA, and USDA) and most agency loans provided by Fannie Mae and by Freddie Mac. Unfortunately not every borrower can qualify easily under the QM lending rules, especially many self – employed borrowers, jumbo loan borrowers, investment property owners...
Friday, July 25, 2014 - 1:57pm
Glenn Michaels
Three states have an unusually high inventory of foreclosures. They are New Jersey, New York and Florida. In the United States during the month of May 2014 there were 47,000 homes where the foreclosures were completed. This figure is down from a year ago where we had 52,000 homes foreclosed. Nationally there is a back log of foreclosures totaling 660,000 homes. Nationally foreclosures are up 3....
Friday, June 20, 2014 - 1:27pm
Frankie Lacy
Underwriters that work for mortgage shops that are non-delegated with private mortgage insurance (PMI) vendors must submit loan packages for review. Those packages are subsequently reviewed by the PMI company’s underwriting team. These packages may also be reviewed by PMI management, sales professionals, and auditors. As a result, it is important to put your best foot forward and present as clean...
Friday, May 23, 2014 - 11:17am
Frankie Lacy
Appraisal rebuttals occur when the appraised value comes in lower than expected. The low appraised value has a negative impact on the LTV causing the loan to require mortgage insurance, or the loan becomes a decline. In an effort to avoid this, loan originators will often seek out additional comparable sales data from realtors and the Multiple Listing Service (MLS). This data can then be...
Friday, May 9, 2014 - 2:13pm
Frankie Lacy
There are several forms of credit documentation that underwriters examine to determine creditworthiness of the applicant. The most frequently discussed is the credit report. However, supplementary documentation can be just as illuminating as the primary report when reviewing the borrower’s credit profile. Many times, the credit report has erroneous or incomplete information reporting. For example...
Friday, May 2, 2014 - 2:05pm
Glenn Michaels
Every year millions of American tax payers must file their federal and state tax return forms by April 15. As I look at my calendar tax filers have two more weeks to file unless they go on extension. Over the years my home has been my cash cow to enable my wife and I to get back a bundle of dollars from both the Internal Revenue Service and from the state (New York) where I reside. In fact my...
Friday, April 18, 2014 - 4:02pm
Glenn Michaels
Typically mortgage payments are calculated on a monthly basis and a borrower is scheduled to make twelve (12) mortgage payments a year. However, borrowers that sign up for a Bi – weekly mortgage are scheduled to make thirteen (13) mortgage payments a year. Every mortgage has a specified interest rate that has a corresponding interest rate factor. The interest rate factor is always multiplied...
Saturday, March 29, 2014 - 8:23am
Glenn Michaels
Borrowers who reside in expensive markets may desire an Adjustable Rate Mortgage and/or an Interest Only Mortgage. Borrowers who obtained an Adjustable Rate Mortgage saw an interest rate and monthly payment reduction. In some cases the payments was 3o – 35% less than borrowers that obtained a fixed rate mortgage. Need Mortgage Training? CLICK HERE to Download Brochure --->> In the high value...
Saturday, March 22, 2014 - 6:13am
Frankie Lacy
Automated Underwriting System (AUS) findings have become more sophisticated as the mortgage industry has turned its focus to lending quality, transparency, and regulatory compliance. As a result, some are left wondering, do I still need to look things up in my guidelines? The answer is, YES! Now, more than ever, a heavy dependence on underwriting guidelines is appropriate for mortgage...
Saturday, March 15, 2014 - 9:55am
Glenn Michaels
The mortgage industry ended 2013 with no change in loan limits beginning in 2014. On January 10, 2014 Qualifying Mortgages begin, but there are still lenders out there that will do non – Qualifying Mortgages. The more things look like they change the more they do not. In 2013 HUD announced several different scenarios where the borrower now has to be qualified manually instead of utilizing Desk...


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