Written By: Joel Palmer, Op-Ed Writer
In a move that could help mortgage processors and underwriters assist more first-time homebuyers, Fannie Mae is allowing lenders to fund closing cost and prepaid fees.
Written By: Joel Palmer, Op-Ed Writer
Less than a year after enabling higher debt-to-income (DTI) ratios for certain mortgage borrowers, Fannie Mae is adjusting its underwriting standards to address the risk associated with many of these loans.
Written By: Joel Palmer, Op-Ed Writer
More than a year into the Trump presidency, a rollback of Obama era mortgage lending regulations is gaining momentum. With encouragement from the mortgage and financial services industries, many in Congress are hoping to reduce the impact of regulations meant to combat conditions that lead to the 2008 financial crisis.
Written By: Joel Palmer, Op-Ed Writer
Freddie Mac and Fannie Mae recently released their 2017 full-year and fourth quarter financial results. Here are some of the highlights: The recently passed Tax Cuts and Jobs Act led to a sizable fourth-quarter net loss for both GSEs.
Written By: Joel Palmer, Op-Ed Writer
Things are heating up in the world of GSE reform. From Congress, to the Federal Housing Finance Agency, to groups representing lenders and consumers, measures are being pushed and debated in hopes of ending federal government control of Fannie Mae and Freddie Mac.
Written By: Joel Palmer, Op-Ed Writer
Multiple efforts are underway that could make it easier to purchase and finance manufactured housing. Last week, the U.S. Department of Housing and Urban Development (HUD) announced a “top-to-bottom review” of rules governing manufactured housing.
Written By: Joel Palmer, Op-Ed Writer
Mortgage processors, mortgage underwriters and other industry stakeholders have another month to submit input to the Federal Housing Finance Agency (FHFA) regarding potential changes to Fannie Mae and Freddie Mac’s credit score requirements.
Written By: Joel Palmer, Op-Ed Writer
With a new presidential administration, a number of regulatory developments, and a strong housing market, 2017 was an eventful year for the mortgage industry. A number of these developments will carry over into the new year. Here are five things that could impact mortgage processors, mortgage underwriters and the rest of the industry in 2018.
Written By: Joel Palmer, Op-Ed Writer
The Federal Housing Finance Agency (FHFA) recently reported that nearly half of the almost 70,000 non-performing loans (NPLs) sold through last year had been resolved.
Written By: Joel Palmer, Op-Ed Writer
Enjoy it while it lasts.It’s been a better-than-expected year for mortgage processors and underwriters. While there isn’t concern about a repeat of 2007-2008, the mortgage and housing industries are preparing for an eventual slowdown in activity.
Written By: Joel Palmer, Op-Ed Writer
When Donald Trump was elected president of the United States a year ago, the mortgage industry was hopeful his administration would alleviate the regulatory burden that intensified under the Obama Administration.
Written By: Joel Palmer, Op-Ed Writer
The mortgage market was already expected to decline in 2017 because of rising mortgage rates. Then homeowners collectively decided not to put their properties up for sale, tightening inventory.
Written By: Joel Palmer, Op-Ed Writer
Mortgage underwriters and processors should be extra vigilant during the lending process due to the increased potential of mortgage fraud.
Written By: Joel Palmer, Op-Ed Writer
Mortgage processors and underwriters can expect 2018 to bring a slight increase in purchase loan volume, a considerable reduction in refinance activity, and an influx of home equity loan applications.
Written By: Joel Palmer, Op-Ed Writer
The National Flood Insurance Program (NFIP), set to expire in the coming weeks, was extended by President Trump earlier this month. But its future is as challenging to forecast as the path of an Atlantic hurricane.
Written By: Joel Palmer, Op-Ed Writer
Mortgage refinance activity is expected to drop off considerably this year and next due to rising mortgage rates. But a new program set to launch could create refinance opportunities for certain homeowners.
Written By: Joel Palmer, Op-Ed Writer
Some people buy the latest versions of products and technology the day they launch. Others are content using outdated models.
Written By: Joel Palmer, Op-Ed Writer
Last month, the Consumer Financial Protection Bureau (CFPB) finalized amendments to the “Know Before You Owe” mortgage disclosure rule. Formally known as the as the TILA-RESPA Integrated Disclosure rule (TRID), the regulation requires mandatory compliance beginning Oct. 1, 2018, about three years after it first took effect.
Written By: Joel Palmer, Op-Ed Writer
The economic atmosphere remains calm…for now.But clouds are forming. The wind is picking up a little bit. A few warning signs have emerged for the mortgage industry to heed.
Written By: Joel Palmer, Op-Ed Writer
It passed the House along party lines last month. The likelihood it gets through the Senate is dicey at best. But key parts of the Financial CHOICE Act may be enacted after they were included in the House Appropriations Committee’s Financial Services Subcommittee’s appropriations bill at the end of June.
Written By: Joel Palmer, Op-Ed Writer
Midway through its 120-page annual Report to Congress, the Federal Housing Finance Agency dedicated one page to making three legislative recommendations. One of those recommendations drew a strong objection from the Mortgage Bankers Association (MBA).
Written By: Joel Palmer, Op-Ed Writer
It started three years ago with a hefty, nine-figure fine.The agency that imposed the fine was called unconstitutional by the mortgage giant it sought to punish for an alleged violation.
Written By: Joel Palmer, Op-Ed Writer
Economists at both Fannie Mae and Freddie Mac forecast housing market growth in 2017 from last year. But the rate of growth will be slower this year and it will moderate even more in 2018, according to those forecasts.
Written By: Joel Palmer, Op-Ed Writer
While regulators and legislators debate the current and future structure of Fannie Mae, the agency has been spending much of 2017 talking about its focus on customers. In the last month, executives from Executive VP Andrew Bon Salle to Chief Financial Officer David Benson have given interviews on the subject of Fannie’s customer-centric initiatives.
Written By: Joel Palmer, Op-Ed Writer
The Consumer Financial Protection Bureau (CFPB) will be increasing its focus in the next year on ensuring that certain mortgage borrowers don’t face credit discrimination. The CFPB recently released its fifth Fair Lending Report, which summarizes its supervision and enforcement activity in the past year as well as its priorities for the coming year.
Written By: Joel Palmer, Op-Ed Writer
The future of the two government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac has become the mortgage industry’s version of the classic chicken-and-egg dilemma.
Written By: Joel Palmer, Op-Ed Writer
The Consumer Financial Protection Bureau (CFPB) wants to give mortgage lenders more flexibility in complying with the Equal Credit Opportunity Act (ECOA) while also clarifying their obligations under the law.
Written By: Joel Palmer, Op-Ed Writer
Mortgage underwriters and processors may have to be more diligent in combatting fraud. A mortgage market that encourages more purchases than refinances and enables higher loan-to-value (LTV) ratios will lead to higher incidence of mortgage fraud, according to industry analysts.
Written By: Joel Palmer, Op-Ed Writer
One of the most significant operational changes of the government-sponsored enterprises of Fannie Mae and Freddie Mac since the federal government assumed ownership is the strategic transfer of credit risk.
A program that started five years ago has quickly evolved into a significant market for credit risk transfer securities.
Written By: Joel Palmer, Op-Ed Writer
The news from Fannie Mae’s fourth-quarter and full-year results for 2016 was mostly positive. But the mortgage giant’s earnings report released last week indicated that several risks could prevent it from paying future dividends to the U.S. Treasury.
Written By: NAMP® Staff Writer
2016 has seen numerous changes in guidelines for reviewing student loan qualifying payments. In this two part series, N.A.M.P. and N.A.M.U. will provide tools for processors and underwriters to use when determining which calculation should be used for qualifying student loan payments. Part I reviewed Fannie Mae and Freddie Mac’s guidelines. We continue this series by exploring USDA, FHA and VA rules.
Written By: NAMP® Op-Ed Ghost Writer
2016 has seen numerous changes in guidelines for reviewing student loan qualifying payments. In this two part series, N.A.M.P. and N.A.M.U. will provide tools for processors and underwriters to use when determining which calculation should be used for qualifying student loan payments. We will begin with Fannie Mae and Freddie Mac’s rules on this topic. Part II will explore USDA, FHA, and VA rules.
Written By: Carlette Emperator
There’s been several times that reimbursement from employee business expenses have been used against the borrower for mortgage qualification. This has caused the borrowers monthly income to be reduced based on the information noted in the two most current tax returns on schedule A or form 2106.
Written By: Carlotta Emperator, Op-Ed Writer
In recent year, FHA has published updates to the rules that affect how to process a FHA Reverse Mortgage or Home Equity Conversation Mortgage. This process is completed through what is a “Financial Assessment” that was added to the Reverse Mortgage effective date April 27, 2015. FHA required each lender to process a prospective mortgagor on all HECM transaction type.
Written By: Angelique Jackson, Op-Ed Ghost Writer
On March 29, 2016 Fannie Mae issued an updated regarding DU 10.0 and Multiple Financed Properties. Previously, we lenders had to manually calculate the reserve requirements because DU did not provide that information. Well, that will all change the weekend of June 25, 2016. DU will now calculate the number of financed properties the borrower has and calculate the reserves for both the subject property and the “Other financed properties.” But before we get into the calculations for the total number of financed properties and reserves, let’s talk about the multiple finance property rule and when it applies.
Written By: NAMP® Op-Ed Ghost Writer
Although the automated underwriting system provides guidance on loan analysis, it is critical to hone your guideline reviewing skills. Underwriting guidelines contain critical definitions, clarifications, and rules that must be applied on all loans. In some cases, the AUS will refer to the guidelines for the full list of requirements to address a particular loan characteristic. As a result, let’s review some best practices for using guidelines.
Written By: NAMP® Op-Ed Writer
In the age of green technology the mortgage industry is beginning to see more properties with Solar Photovoltaic (SPV) systems, more commonly known as Solar Panels. In this 2-part article we will cover what solar energy is, how it works, the types of financing available and the documentation requirements. What are some of the benefits of using solar energy? It helps conserve our fossil fuel resources and reduces our reliance on imported fuels.
Written By: Angelique Jackson, Op-Ed Writer
Last week we covered the different types of financing available for solar panels such as a Solar Lease, Power Purchase Agreement (PPA), a Solar Loan and the Property Assessed Clean Energy (PACE) program. With a Solar Lease or Solar Loan, the lease/loan payments are included in the DTI (a solar loan payment is added to the PITI as subordinate financing),while payments for a PPA are excluded from the DTI since the homeowner only pays for the energy that was produced.
Written By: NAMP® SOp-Ed Ghost Writer
Underwriters and processors that work for non-delegated lenders must submit loan packages for review. Those packages are subsequently reviewed by the MI or investor underwriting team. These packages may also be reviewed by management, sales professionals, and auditors. As a result, it is important to put your best foot forward and present as clean and transparent a package as possible.
Written By: NAMP® Op-Ed Ghost Writer
We have seen frequent changes in the requirements for including student loans over the last year. There was a time where student loans could be excluded from the qualifying ratios if the borrower was able to verify certain terms of deferment. In addition, income-based repayment plans and other temporary reduction plans were permitted. However, the agencies have recently released lender updates that are changing the student loan game.
SOURCE: Mortgage News Feed
GUS, or Guaranteed Underwriting System, is USDA’s automated underwriting engine. GUS can take some getting used to if you are most familiar with Desktop Underwriter or Loan Prospector. Here are some tips to help you navigate GUS and get the most accurate findings for submission to USDA.
Written By: NAMP® Op-Ed Ghost Writer
As the weather warms and the housing market gains steam, volume will increase. Production standards will be revisited by management and rush requests will become the new normal. The pressure to get loans out of the underwriting queue will increase. As a result, we must tighten up our process flow and put some best practices in place. One of the most fundamentally important best practices is the validation of the findings.
Written By: Angelique Jackson
On March 9, 2016 the final rule published in the Federal Register in February is now in effect. We have been working under the interim final rule since December 1, 2014. There are a few new items in the handbook along with the restructuring of the handbook similar to FHA’s 4000.1 where all information is gathered in one single source and divided in sections for Manual Underwriting and GUS Accept. Chapters 5-16 were updated with new guidance and/or clarifications to old guidance. I am not going to go over all of the changes but I will talk about some of the more pertinent changes and clarifications that were done.
Written By: NAMP® Op-Ed Ghost Writer
USDA introduced several changes on December 1, 2014. These were the interim rules that became effective with the introduction of the new guaranteed loan program regulations 7 CFR Part 3555. Since then, USDA has finalized these rules. Those final changes became effective March 9, 2016.The first highly anticipated change is that discount points may now be financed for all applicants.
Written By: NAMP® Op-Ed Ghost Writer
Recently Fannie Mae has issued communication regarding some upcoming changes with Desktop Underwriter (DU), the Single Family Selling Guide, and Collateral Underwriter (CU).
Written By: NAMP® Op-Ed Ghost Writer
The busy season in the mortgage industry is fast approaching! Soon, the weather will break and homebuyers will come out of hibernation to begin searching for their next home. As a result, this is a good time to think about some best practices for maximizing productivity and efficiency. Time management is one of the most critical of these practices.
Written By: NAMP® Op-Ed Ghost Writer
Most underwriters and processors have the basics of calculating income down to a science. The hourly, bi-weekly, semi-monthly, and annual calculations are second nature to those of us who calculate income every day. As a result, many processors and underwriters will manually execute their calculations on an underwriting or processing worksheet. Many underwriters will also type their calculation on their underwriting transmittal. However, there are some drawbacks to manual calculations that an income calculation worksheet can overcome.
Written By: NAMP® Op-Ed Ghost Writer
The past year has seen sweeping changes in almost every area of loan origination, underwriting guidelines, and loan disclosures. USDA and FHA have both created new handbooks that came with completely new guidelines. The CFPB introduced the Loan Estimate and Closing Disclosures which replaced the Good Faith Estimate, TIL, and HUD-1. Fannie Mae and Freddie Mac introduced new guidelines for many topics including review of Schedule-A Unreimbursed Expenses and required reserves for borrowers retaining their home as a secondary or rental property.
Written By: Carlotta Emperator, Op-Ed Writer
Many borrowers have deferred student loans. A deferment, like forbearance is a temporary suspension of the obligation to repay a federal student or parent education loan. In order to qualify for a home mortgage, these obligations were being “omitted” or calculated incorrectly. Therefore, the borrower’s ratio would be affected based on the mortgage product.