Tag: Q&A Issues

Fannie Mae & Freddie Mac – Occupancy Rule: I have a married couple where one is relocating for work and the spouse will be renting in their current town where he is employed until he finds a job in their new hometown. Will this be an occupancy issue with a minimum 3% down file?

Answer: The short answer here is that you can do this loan either Fannie or Freddie and as long as the loan is done through DU or LPA and is not manually underwritten. Only one of the borrowers needs to occupy the property for it to be considered a Principal Residence.  (The whole non-occupant co-borrower […]

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VA – Co-Signed Car Loan: If my borrower can prove that he does not pay for a co-signed debt, am I able to ignore that debt?

Answer: VA does allow for debts to be ignored in certain cases. (See the guideline below.) Expect an underwriter to require at least a 12-month history of payments from the holder of the loan in order to consider ignoring the debt. Reference: VA Lenders Handbook Ch. 4, 5-d: Applicant as Co-obligor on Another’s Loan (04/10/09) […]

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FHA – Escrow Repair: Can the sales price be increased when there is a required repair for which the seller and buyer do not have the funds to complete?

Answer: FHA will allow the increase to the sales price for the repair escrow and FHA specifically allows repair escrows in this type of situation (see guideline below). However, I must warn you that many underwriters, and the investors they work for, believe that sales price increases after an appraisal has been completed are not […]

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Compliance – HMDA: We don’t presently collect GMI (Government Monitoring Information) for HELOC or Closed End Equity Loan applications. Will this change January 1, 2018?

Answer: With the new HMDA rules that go into effect January 1, 2018, HELOCs and Closed End Equity Loans will move from being optional when reporting data, to being required when reporting HMDA. This means you will need to gather all of the GMI information on these types of loans as well. Reference: Here is […]

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Identity of Interest: A grandmother passed away and the granddaughter wants to buy the house from her estate. Is this an identity-of-interest situation that would limit her max LTV to 85%?

Answer: FHA will allow an exception to their Identity-of-Interest LTV restriction for Family Member transactions. Call me! While this would be an underwriter call, it is my opinion that this would be considered a family member transaction, which would create an exception to the maximum LTV. Reference: Handbook 4000.1 states the following: (A) LTV Limitations […]

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