The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers.
There is a host of information available by Googling Homebuyer Tax Credit
The new GFE and HUD-1, unless sidelined by various industry efforts, becomes effective January 1, 2010. Besides factors such as those mentioned below, the new HUD-1 breaks down as to how much of the title insurance premium is retained by the local title agent. The GFE encourages the borrowers to shop around and includes space to compare interest rates and fees. It also categorizes the charges so that the GFE and HUD-1 can be more accurately compared.
The new, revised, and ideally consumer-friendly version of the Good Faith Estimate form is mandated for both mortgage bankers and brokers.
GFE charges are in three categories: fees that cannot increase, fees that have a 10% variance, and those fees that have no limit to the amount they can increase.
No increase fees:
origination fee, processing fees, underwriting fees, ancillary (junk) fees, overages in discount points. Adding any of these fees that are not on the initial GFE are also prohibited.
In addition, the lender (broker or banker) will not be able to add fees such as transfer fees, tax service fees, etc that should have been disclosed on initial GFE.
10% Variance fees:
Lender required services fees that are performed be a legitimate 3rd party vendor/provider; appraisals, lender’s title insurance. Also settlement services where the borrower chooses a firm on a list approved by the lender; owner’s title insurance when the borrower chooses a company on the lender’s approved list; and recordation charges by local governments.
The rub will happen when the initial GFE did not properly disclose these fees and the 10% variance is any one line item and/or the combined.
Unlimited Variance:
There is no limit on the increase in charges such as hazard insurance, per diem interest, escrows, and title insurance and other charges when the title company is chosen by the borrower.
Training on how to use these new forms is being offered by various national lenders and compliance vendors such as All Regs.
Additional information and links to FAQ can be found in other blog posting listed below, to the right, or by search for “compliance” above.
Ultimately, the proper use of these new forms will be determined by the compliance departments of the Tier One lenders. We will all have to pay very special attention to their interpretations.
To that end…..
TDSML Commissioner Doug Foster was the speaker at yesterday’s Austin Mortgage Bankers luncheon and gave a great summary of the upcoming changes.
Here are my notes from a 20,000′ view and what needs to be done now;
1. Everyone has to take the State Test (broker and banker types)
2. Everyone has to take the National Test (broker and banker types)
3. Certain circumstances will require processors and admin assistants to need a license
So, what needs to happen right now?
1. Go take the State Test. When you register for the test you will be able to also take a practice test. The State test can be taken every 24 hours until you pass it, until April 2010. In April 2010 changes are coming about that could cause you to wait up to one month to take it again.
2. Go take the National Test. If you do not pass the test you must wait 30 days to take it again.
3. Get signed up now for your 20 hours of mandatory education.
For more information, where to go take the test, how to register, education vendors, and a complete time-line, click here.
The New York Times is reporting that Congress is poised to keep the Homebuyer’s Tax Credit around a bit longer. Read the entire artilcle by clicking here….
Since the first release in August 2009, HUD has issued seven additional FAQ updates. More updates are anticipated as numerous questions are yet to be answered.
For many of the answers to the questions we should be asking, click here.
Various vendors have more information and training opportunities and we will post those here in the near future.
From Bloomberg.com: Reid says that Homebuyer Tax Credit May Be Extended click here to read more…
From Kenneth R. Harney’s Washington Post article….Could the controversial appraisal system imposed nationwide by mortgage giants Fannie Mae and Freddie Mac in May — and now tied to lowball property valuations, busted home sale transactions and higher fees to consumers — be on its way out? …..Read more
This was is an excellent email from the USDA office in McKinney.
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Happy Friday Evening to you all!
FY 2010 is already on pace to be bigger and better than FY 2009. Unfortunately, that means turns times might drag out, so please plan accordingly. Currently, the McKinney Local Office has 97 files on hand and we are using 3 offices to help with the workload. We can effectively fund between 7-10 files a day, so as you can see, our turn times are approaching 10 business days. I expect this to get even longer if the tax credit bill is extended.
Many of you have asked what you can go to help. Here are a few suggestions:
1. Please do not call and then subsequently email 3-4 of my staff members asking for updates every morning and every afternoon. Trust me, I am not trying to be rude, but it is real simple; we can respond to your request for an update or work the next file in the batch and eventually, get to yours. If we don’t respond, we are not trying to be rude, we are trying to work files.
2. Please do not ask us to rush files. We are rushing files and it appears every file is a rush. If we start moving files around, everyone will want theirs moved around and we will be back in the same order, just having wasted a bunch of time. My staff will not move files around without going through me first, so there is no sense in contacting them. If you need that special favor, contact me directly, but please be prepared for the answer I am going to give.
3. Start sending files overnight. Starting Tuesday the 3rd, I will back date the day of receipt 1 day for any file over-nighted to us. This applies to the McKinney Area Office only. Why is this? It takes 1 person until about 10 AM to print everything we receive each day. Due to the file sizes, it nearly shuts down that person from all other activities. I would estimate we can work at least 1 extra file per day if we cut the emailing of files down by 50%. So, we are going to try this and see how it goes. If nothing else, I will save the government a bunch of paper.
4. Hang in there with us. I promise, Area 3 Staff (those in McKinney and Decatur) are working very hard for you. Many of you don’t realize we work nearly 40 other loan, grant and loan guarantee programs. We are busy. Those other programs require a little TLC sometimes too.
5. If you know of anyone seeking a temporary job with USDA Rural Development, we have several jobs posted right now. They can go to usajobs.com and take a look.
If I can be of any assistance, please give me a call.
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Allen M. Lambright, Area Director
USDA Rural Development
1406 E North McDonald, McKinney, Texas 75071
Ph: - 972.542.0081×4; Cell: - 972-489-2556; Fax: - 972.542.4028
Read what Dallas Morning News’ Michael Miller has to say..click here
The professional loan officer knows that this market is changing faster than ever. This blog author has been in the mortgage business for 25 years and can truly say that there has never been more changes in any period than in the last 18 months.
Two years ago, one constant concern amoung loan officers was whether or not the manual underwrite for loans with credit scores below 580 was going to go away or not; it did. Another concern was whether or not HUD/FHA would get rid of seller paid down payment assistance; that happened also.
And both for good reason; defaults on these loans were 3 to 4 times higher than loans without either, much less both.
Today, there are a lot of people that can’t qualify for a loan that could 2 years ago simply because the program is no longer available, or the guidelines have changed.
Be aware of the answers your loan officer gives you. Be sure they are good solid answers - the answers should be told in such a way they can be verified. If your loan officer is telling you something that is totally different than what you’ve heard from others, don’t believe your loan is approved until it has funded.