Q&A – April 25, 2019

FHA – Listing Agent Closing Cost Assistance: Can a listing agent contribute to the buyer’s closing costs if we stay within the IPC [Interested Party Contribution] guidelines? [Interested Party Contribution Chart]

Answer: Yes.  The selling agent can contribute to the buyer’s closing costs as long as the contribution complies with the Interested Party Contributions guideline shown below. Reference: 4000.1 II. A. 4. d. iii (G) Interested Party Contributions (TOTAL) (1) Definition: Interested Parties refer to sellers, real estate agents, builders, developers or other parties with an interest in [...]

2019-04-19T16:41:18-05:00April 24th, 2019|

FHA – Manual Underwriting Requirements: I received an “Accept” from TOTAL, but now my underwriter is telling me the file must be manually underwritten. Is this correct? [NEW – FHA Manual Underwriting Class – NEW FHA Manual Underwriting Chart-MTP™ What Triggers a Manual Underwriting?]

Answer: I don’t have your specific file circumstances, but it is a definite possibility.  A lot of originators do not understand that there are file scenarios that require a loan to be manually underwritten despite what the AUS says. There are 10 conditions that we review in our New FHA Manual Underwriting Class that fit [...]

2019-04-19T20:03:00-05:00April 24th, 2019|

Fannie Mae – Limited Review Condo Process: What are the requirements for limited review condominiums? [Condominium Limited Review – Fannie & Freddie – Chart]

Answer: Mortgage Currentcy has a nice chart on this subject, but for further details, here are the guidelines from the manual. Reference: B4-2.2-01, Limited Review Process (06/05/2018) To be eligible for a Limited Review, the unit securing the mortgage must be an attached unit in an established condo project. Transactions Eligible for a Limited Review [...]

2019-04-19T15:56:12-05:00April 24th, 2019|

FHA – Mortgage Not Showing on Credit Report: Does FHA require a VOM & 12 months cancelled checks when the mortgage does not show on the credit report?

Answer: FHA only requires a VOM from the servicer and has no special stipulations when the servicer is a private lender when underwriting with TOTAL Scorecard (see the guideline below). There is no requirement to verify the payment history information on the VOM when underwriting with TOTAL. Reference: (C) Undisclosed Mortgage Debt (TOTAL): When an existing debt or [...]

2019-04-19T17:16:40-05:00April 24th, 2019|

FHA – Declining Overtime Income Calculation: What are the rules for averaging overtime income if that income shows a decline from the previous year?

Answer: If the Overtime or Bonus Income from the current year decreases by 20 percent or more from the previous year, you must use the current year’s income. Reference: v. Overtime and Bonus Income (TOTAL) (A) Definition: Overtime and Bonus Income refers to income that the Borrower receives in addition to the Borrower’s normal salary. (B) Standard: The Mortgagee may [...]

2019-04-19T16:37:20-05:00April 24th, 2019|