Title: What do NMLS, FHA Condos, HARP and USDA have in common?
By: Karen Deis, Publisher, MortgageCurrentcy.com
What do NMLS, FHA Condos, HARP and USDA have in common?
All of them have had rule changes within the last 30 days!
So, let’s start by talking about what’s supposed to happen when NMLS updates their website on October 22…
They are updating their “credit flags” and “credit scoring thresholds” within the reporting features. So what does this mean to you? When it’s time to renew your license, if you have at least one derogatory credit issue or change from the previous year, or you have a decrease in your credit score, your state’s licensing board will be notified and they will determine whether or not your license will be renewed.
They have also added some additional questions when you reapply. The most significant one is where they ask you if you have had any local, state or federal displinary actions taken against you. If you answer yes, you must explain what it is – and again, the state will decided whether to renew your license.
One thing you can do right now is check your credit, and remember that NMLS uses Vantage scores, not Fico scores. SO within this article, we’ve include a link where you can order your Vantage credit score.
Next, Fannie and Freddie have made it easier for consumers to qualify for HARP Refi’s. You’ll find two separate articles, but they are pretty much in sync with each other now—including the biggie that if the new monthly payment changes less than 20% over the old monthly payment, they are reducing the documentation for income and assets.
For example, if a borrower has at least 12 months’ PITI in cash reserves, there is no need to verify income.
They have also made it easier to remove a borrower. And if you are refi’ng a rental property, they have eliminated Form 1007.
Here’s what you need to know – the DU System has not yet been updated, and underwriters have been advised to disregard DU messages and use these new requirements.
So, it’s important that YOU know what the changes are, just in case the underwriter doesn’t know what has been updated or is asking for documents that may appear on the findings, but are not needed due to these changes.
Oh, and I just wanted to mention again that you’ll find a couple of mortgage talking points for consumers about this topic.
Let’s switch to FHA, where they have changed the Condo approval process, making it easier to get them approved.
The biggest changes are the homeowner’s association dues and investor ownership percentages. Those have been real deal-killers in the past.
And if you’ve wondered what the old condo approval rules were—and how they have changed—we not only created a handy chart for you to refer to, but also provided a Mortgage Talking PointsTM for your real estate agents.
One last bit of news from USDA…last month, they made an announcement that they would be eliminating some cities and changing income limits on others.
How they make that determination is based upon census information, but they found there was a flaw in the data because the 2010 census no longer asked for income information, which was the method used by Rural Housing to determine eligibility. They claim they will have it all worked out by the end of March, 2013. Makes me wonder how they plan to do THAT!
One of the reasons I write about the rules and regulations and interpret them in plain language for you, is that I realize that getting a loan approved and closed these days, is rocket science!
(Read these articles for just $1. www.MortgageCurrentcy.com)