New Appraisal Guidelines now in Effect!

New Appraisal Standards Effective September 1 for Fannie Mae and Freddie Mac

It’s finally happened: You’ve found the perfect home for your clients. Their financing is in place. But then…despite the comparables….the appraisal comes back low, threatening to ruin the whole deal.

To help make appraisals more consistent and accurate, and prevent situations like this in the future, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to develop the Uniform Appraisal Dataset (UAD). The UAD will (1) define what fields are required for an appraisal submission and (2) standardize both responses and definitions for certain fields.

Here are just a few of the items impacted by the new appraisal standards:

 

  • Days on the Market: Days on market is now defined as the total number of continuous days. If a property is taken off the market and then relisted, the appraiser will have to count all of the days it has been listed.
  • Offering Price: The original offering price and history of all price changes must be reported.
  • Property Style: Appraisers must use appropriate architectural design indicators such as “Colonial,” “Farmhouse,” etc. Descriptions such as 1 story, 2 stories, etc are no longer acceptable.
  • Condition of the Subject Property: An overall condition rating must be assigned from the predefined condition categories provided.
  • Quality of Construction: The appraiser must rate the  quality of construction of the subject property and all comps using a  list of 6 predefined quality levels.

 

The UAD appraisal standards are required for all appraisals conducted on or after  September 1, 2011 for conventional loans sold to Fannie Mae and Freddie Mac.

To read FAQs about the UAD appraisal standards, visit  https://www.efanniemae.com/sf/lqi/umdp/pdf/uadfaqs.pdf.

Courtesy of

Kris Cooper REMAX Preferred Group via Realtor/Lender Committee Cincinnati Area Board of Realtors

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The lastest Fannie Mae fallout- FIRST HAND!

Last last week several large financial institutions put on delay on up coming foreclosure actions, the details for reason can be viewed here in an article from the Washington Post. The article states “To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment,” spokesman Dan Frahm said in a statement. However I found out first hand this is affecting MORE then just foreclosures that have not yet gone to judgement.

3 weeks ago a client of mine drafted an offer to Fannie “JP Morgan Chase” a bank that also put on this hold, and had it acceptedwith a closing date of next Thursday October 14th. The filing of foreclosure on the property took place in March of 2010 and was filed at the Hamilton County auditors office around the 20th of that same month. The foreclosure had already gone to judgement, then on Tuesday I receive an email from the sellers Fannie May via JP Moran Chase’s representatives that the close was on hold and needed to be extended until March 2011! My client, who was financing the purchase had locked in to an amazing interest rates and was beside themselves at what to do. The seller offered a full refund of the 5% down fee that collected on the contract agreement day and was in full understanding if the buyer wanted to walk away.

At this point I started to get down to business, not to focus on the problem but to uncover the solution!! I started by calling the County to make certain the title had been file, and recorded property and it was. I then called the title company assigned by the seller Fannie Mae via JP Morgan Chase. The closing coordinator assigned to our case was at a complete gasp, she had also be notified a the hold late in the day on Monday. She explain 45 pending closing on her desk had been put on hold, I respond “shew only 45 that sounds like a lot”, she then said “NO not only 45, 4500!” I couldn’t believe it, the title company is exclusive to cases in Ohio for Fannie Mae and all there foreclosed upon PENDING sale contract cases had been put on hold. My next call was to the listing agent, a well-known REO agent in our area who specializes in this type of transaction. He himself is difficult to get a hold of and not 10 mins after I left a message he called me direct, in a frantic vibration. He described to me the issue, all his business was on HOLD, he explain I can’t close a thing, he said “most will close within 60 days that are already pending, but some it will be upwards of 6 months”. He told me this all came down between start of business Monday Oct 5th and mid day Oct 6th. Talk about losing your income for half a year.

I stayed positive and my final call went to my beloved title attorney here in Cincinnati. The man who has the right thing to say about any situation related to real estate. Like always when I call him, I explained my situation in detail, I explained what my research had uncovered. He described to me the directions he had been given about the situation “We were told it only affects future foreclosure, this is new to me”, keep in mind this is a real estate TITLE attorney who owns his own title agency. This news was fresh and still his, but what really caught me off guard what the advice he gave me to solve the problem “Kris, I apologize but you are helpless, there is no solution”.

And so we wait…..

FHA Mortgage Insurance Premiums UPDATE

 

The new FHA MORTGAGE INSURANCE PREMIUMS go into effect for CASE NUMBERS
assigned on or after 10/4/10

NOW is the time to contact your potential FHA buyers & clients (especially
those possible FHA streamline refinances) and get word out. If they want a
choice of options, they need to get a purchase contract and/or a loan
application in NOW. The new MIP has merits in that it will be a lesser loan
amount financed and therefore less loan to pay off when people sell their
house. However, it causes a HIGHER PITI payment that may not be appealing
to people.

Current upfront mortgage insurance premium – 2.25 bps ~ On or after
10/4/2010 – 1.00 bps ~ LOWER!

Current monthly MIP – .55 bps ~ On or after 10/4/10 – .90 on LTV’s > 95%
~ HIGHER!

Take a look at the attached analysis here: FHA_Premium_Changes_Analysis[1] to see the significant difference this
change will make on a $150,000 purchase price. You will notice the lower
UMIP will mean an $1800 lower loan amount. But, the much higher monthly MIP
would increase the monthly payment $32! This is going to have an impact on
borrowers and their financing options. Call or email me with questions! We
are closing FHA loans in 30 days!

Courtesy of Kathy Lamb Union Saving Bank

FHA increasing UPMI

IMPORTANT INFORMATION FOR ANY FHA QUALIFIED BUYER …

If you have buyers looking purchase a home soon, or anyone on the fence
about buying sooner than later, let them know that the UPFRONT MORTGAGE
INSURANCE PREMIUM (UMIP) on FHA loans is increasing as of April 5th!
Currently, there is a 1.75% premium added to the base loan amount … As of
April 5th, that will increase to 2.25% on all loans registered beginning
April 5th. 

What does this mean for your buyer?  On a $150,000 base loan amount, the
increase equates to an additional $750 (from $2250 to $3375) financed into
the total loan amount!!

In order for FHA loans to be registered with an FHA case number, they need a
fully executed contract and full loan application.  It can close after that
date, but HAS to be registered by April 4th!!   

And, don’t forget, we have WELCOME HOME FUNDS available for first time home
buyers!~

Courtesy of Kathy Lamb-Union Savings Bank

Changes to HUD homes for buyers-

HUD BUYER AND BROKER INCENTIVES DISCONTINUED
  Effective February 12,2010, any properties listed and/or sold with FHA financing as of this date are no longer eligible for the $100 down payment incentive.

The Sales Allowance of $2500 for owner occupant purchasers will also be discontinued as of February 12, 2010 for all new contracts accepted on or after this date.

The $500 broker bonus for owner occupant purchasers who took advantage of the $2500 sales allowance is also discontinued as of February 12, 2010. 

Market Update-Lenders changing HUDs rehab guidelines

 

In an effort to help move foreclosed properties more quickly HUD announced on Friday the removal of 90 day waiting period to repurchase homes utilizing FHA financing!
 
This information just came out yesterday and more details to follow…however the following is a quick review;
 
–  Effective February 1st, 2010
–  All transactions must be arms-length in nature
–  Seller must hold title to the property
–  No previous flipping of the property during the last 12 months
–  Property was marketed openly and fairly
 
Key issue will be when property has increased 20% or more since title transferred;
 
–  Supporting documentation will need to verify sufficient legitimate renovation or appraiser needs to justify and explain increase in value
–  Property inspection will be required by lender
 
Again, this just was announced…please see attached from HUD and as I have more details will forward to everyone.

Published in: on January 19, 2010 at 07:00  Leave a Comment  
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