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Our office will be closed Thursday & Friday, Oct. 22nd & 23rd  for a two-day VA seminar in San Antonio.

The House of Representatives has unanimously voted to extend the deadline for utilizing the $8000 first-time homebuyer credit for qualifying service members for one year. The bill now awaits the Senate to act on it.

The bill also waives repayment requirements for military families, intelligence agents, and Foreign Service officers who take advantage of first-time homebuyer tax credits, passed in the Recovery Act, but are required to sell their homes or move due to orders. The legislation also gives those serving outside the United States for at least 90 days in 2009 an additional year, through November 30, 2010, to take advantage of the tax credit.

Starting January 1, 2010. A new Good Faith Estimate and HUD-1 Settlement Statement will be required along with new guidelines and requirements, listed below.
GFE - View samples of new GFE
According to the new guidelines, the new good faith estimate cannot be completed until we have the following information from our borrowers:

• Borrower's Name
• Borrower's Monthly Income
• Borrower's Social Security number in order to obtain a credit report
• The property address you are purchasing or refinancing
• Estimate of the property's value, and
• Loan amount being sought.

HUD-1 - View samples of new HUD-1
The HUD-1 Settlement Statement has been revised with the goal of enabling borrowers to compare their final settlement charges to those disclosed on the most recent GFE.
Fee Changes

• Lender fees and mortgage broker compensation will now be listed on the GFE and HUD-1 as one, all-inclusive, Origination Charge.
• The GFE must contain a total of the "Adjusted Origination Charge" and charges for all settlement services. The "Adjusted Origination Charge" is one amount that includes all lender and broker fees/credits involved in the transaction.

Settlement charges disclosed on the GFE must be accurate (within tolerances), both initially and throughout the application process. Once the GFE is issued, the lender and mortgage broker are responsible for complying with HUD mandated tolerance limitations on settlement charges.
Tolerance Limitations
Unless there is a valid "Changed Circumstance," lenders and mortgage brokers are prohibited from exceeding certain fee tolerances listed on the GFE as compared to the HUD-1. Tolerances vary according to classes of fees or payments. Details will be provided in a future Newsflash.
Changed Circumstances

• A GFE may only be re-issued under certain Changed Circumstances.
• Changed Circumstances allow fees to increase beyond their tolerance limitations - only if a new GFE is re-issued.
• A list of valid Changed Circumstances will be published at a later date.

Due to these changes, starting 01/01/10, we will not be able to issue a good faith estimate when pre-qualifying you for a loan. You will need to submit your loan application for us to meet these new guidelines and provide you with an accurate GFE.

Starting August 1, 2009, VA appraisal fees will increase $50 to help offset the additional time required to complete the new MC1004 form, now required on all VA and conventional appraisals. The cost for a standard 1 unit single family home will be $400.

Starting July 30th, 2009, the HERA Mortgage Disclosure Improvement Act makes several new disclosure timing requirements. This regulation will cause delays in closings to satisfy these new review requirements.

The following is a list of these requirements:

• Upfront Fees, except a reasonable credit report fee, cannot be collect from the borrower(s) until they have received an initial Truth In Lending.
• The appraisal cannot be ordered until the borrower(s) have received the initial TIL.
• The completed appraisal must be mailed to the borrower(s) at least 6 business days prior to closing to allow the borrower(s) 3 business days to review the appraisal.
• An increase in the APR by more than 0.125% requires re-disclosure of the TIL to be provided to the borrower(s) at least 3 business days before closing. If TIL is mailed, an additional 3 days for mail delivery will be added to the 3 day review period.
• This regulation will require you to wait 7 days after the HUD1 Settlement statement is completed by the title company to close your loan.
• Required on all primary residences and second homes.

Starting July 1, 2009, VA Streamline Refinance Loans (VA IRRRL) may require an appraisal, depending on who is servicing your loan, the type of occupancy of the property and the new loan to value. This is a new lender requirement, not a VA requirement.

The following properties require an appraisal:

• Condominiums
• 2 - 4 units
• Second Homes
• Investment Properties
• Any VA loan not serviced by our lender and with a new loan to value greater than 95%, based on lenders AVM value.

Starting May 1, 2009, the HVCC (Home Valuation Code of Conduct) law requires appraisals to be ordered through a special Appraisal Management Company(AMC) for all conventional loans sold to Fannie Mae or Freddie Mac. We are not allowed to pick the appraiser or have any contact with the appraiser. All contact must go through the AMC. The AMC will randomly assign the appraiser. This, along with a new form(1004MC) that is now required, has driven the price of appraisals higher and made the appraisal process longer and less accurate. We are not pleased with the new system, but are bond by law to follow it.

Current Appraisal Prices

• A standard 1004 appraisal for a 1 unit home now costs $405.
• Appraisals for investment or multi-family properties are from $665 to $755.

The new law also requires the lender to send you a copy of the appraisal so that you receive it at least 3 business days prior to closing on your loan.

Starting April 6th, loans over 80% loan to value(LTV), requiring mortgage insurance, must meet the following requirements:

• Minimum middle credit scores = 720 or higher for all borrowers.
• Maximum debt to income ratio (DTI) = 41%
• Maximum LTV for condominiums/attached housing = 90%
• Maximum LTV for second homes = 80%
• Maximum LTV for 2 unit properties = 80%

Fannie Mae has changed the maximum number of financed properties owned for second homes and investment properties to allow you to own up to ten (10) financed properties, with restrictions.  None of our lenders have adopted these new guidelines, yet, so the current limit is still four (4) financed properties.
Click here for details

Veterans with Disabilities Discount has changed to 0.50% for VLB-qualified borrowers with a 30% or greater service-connected compensable disability, as verified by a VA award letter dated within the 12 month-period immediately preceding the date of closing.

Credit score requirements are increasing.

• Conventional loans now require a minimum middle credit score of 620 for all borrowers.
• Conventional loan credit score adjustments are increasing on 01/15/09
• VA loan credit score adjustments are increasing on 01/12/09. Minimum middle credit scores for VA loans will now need to be 620 for all borrowers. This now includes VA IRRRL loans.

See our interest rate sheet for applicable adjustments

As it stands now, mortgage insurance companies and financial institutions will no longer allow zero-down conventional loan programs. The minimum down payment is now 3% down and requires a minimum credit score of 680.
VA, Texas Vet and Rural Housing loans are the only loans we have that allow a zero down payment.

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