Issue: Q&A – February 25, 2016

Safe Act – Signing Commitment Letter: Is it okay for a processor to sign the commitment letter to the borrower or does the MLO have to do that?

Answer: In my opinion it would still need to be signed by the MLO because it is showing what terms you are “offering” to the borrower. Below are the definitions of the Safe Act straight from the CFPB’s website. The term ‘administrative or clerical tasks’ has to do with the receipt, collection and distribution of […]

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Gift Funds – Donor Borrowed Gift: Does FHA allow a donor who is a relative to borrower gift funds, and then gift those funds to an FHA borrower?

[Download Mortgage Talking Points™ flyers, The Paper Trail – Rules for Verifying Gift Funds on FHA Loans] Answer: Yes! That is acceptable. See the full FHA guideline below. (The information regarding borrowed funds is highlighted.) FHA allows a relative who is donating a gift to the homebuyer to borrow the funds to gift. Who knew? […]

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Refinance-Reference Sheets: Does MortgageCurrentcy™ have updated FHA refinance worksheets on the site, under Charts/Checklists?

[Charts – 4 FHA Refinance Worksheets – Updated 2-1-2016] Answer: Yes, we have 4 UPDATED FHA Refinance Checklists! FHA Streamline Refinance Worksheet (updated 2/1/2016) FHA Rate & Term Refinance Worksheet (updated 2/1/2016) FHA Cash-Out Refinance Worksheet (updated 2/1/2016) FHA Simple Refinance Worksheet (updated 2/1/2016) Refinancing a property can be a little tricky with all of […]

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Septic Tank Inspection: If a property is being financed with FHA and has a Septic Tank, will the borrower need a Septic Tank Certificate to close?

  [Chart – Shared Well & Septic Comparison Chart – FHA/VA/USDA/Conventional] Answer: MortgageCurrentcy™ has a great chart that references this, and can be seen in this attachment. Shared Well & Septic Rules – FHA/VA/USDA/Conventional Loans (updated Jan. 2015) FHA used to only require a septic inspection if the appraiser noted a deficiency or if it […]

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Land Contracts – Refinances: Can a borrower refinance an existing “recorded” land contract?

Answer: Per the 4000.1 Guidelines for Land Contracts: When paying off a “recorded” land Contract, the transaction must be completed as a rate and term refinance only, a cash-out refinance is no longer eligible. If the land contract is not recorded, then it must be processed as a purchase. FHA no longer allows a cash-out […]

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