Q: I have a borrower that I am trying to do a Fannie Refiplus for. The current loan was taken out before 6/2009 and it shows as Fannie owned on their lookup site. When I run it through DU it comes back ineligible because the loan is "not identified as a fannie mae loan". Is the loan Fannie owned and if so why does it show as ineligible? Is there anything to be done? I appreciate any assistance
A: Good question...I run into this all the time. We all do. I assume you got the following feedback on your DU Findings?
"This limited cash-out loan casefile was not underwritten according to the DU Refi Plus expanded
eligibility guidelines because the subject property was not identified as a Fannie Mae loan that is
eligible to be refinanced with DU Refi Plus. Refer to the Selling Guide for additional information
regarding why an existing loan may not be eligible to be refinanced using DU Refi Plus."...
If this is what you see, I see the same on a few on my loans too. The only thing you can do is call Fannie and " start a ticket #" whatever that is or possibly change the variation on the address you have.
Use the one you see on the fannie lookup tool or try changing the Street to ST, Avenue to AVE or IF you have a condo, take out the unit # and rerun DU try that. At the very least, maybe your fannie mae endorsement date is after the cutoff. The cutoff is 5/31/09 If that’s the deal, all you can do is call Fannie @ 877-722-6757 and make sure you have your FANNIE ID #. SAVE THAT LOAN BECAUSE I HEAR THAT HARP 3 WILL ENABLE THESE LOANS TO BE ELIGIBLE.
Q: I have a borrower that is a US citizen but is employed over seas and his income comes from a source based in the UK. Can I use this income and what are the reqs?
A: Foreign income (income generated from non-U.S. sources) may be used only if its stability and continuance can be verified, and is supported by U.S. Federal Tax Returns for the most recent two years. If the income is paid in a foreign currency the file must contain a printout evidencing the source used for the conversion of the foreign currency into U.S. dollars. The income must also be verified in the same manner as U.S. income sources
Q: Why is my NOTE RATE and APR different?
A: APR versus interest rate
When lenders advertise mortgage rates, they are required to display an additional number called the annual percentage rate, or APR.
The advertised rate is the one used to calculate your mortgage payment. Borrow $100,000 at five percent with a 30-year term, and the payment is $537. But an advertised rate tells you nothing about the cost of the loan or if it’s a good deal. Suppose you’re offered two loans. Both have a five percent rate, but one costs $1,000 and the other costs $4,000. They’re obviously not the same!
How is APR calculated?
In the example above, the payment for both loans is $537 per month. But because the first loan costs $1,000, you’re only actually getting $99,000 for that $537 monthly payment. When you pay $537 a month to borrow $99,000 the rate is 5.09 percent. The second loan costs $4,000, so for your $537 a month, you only get to borrow $96,000. In that case, the APR is 5.35%.
You don’t really need an APR calculation to tell you that the first loan is the better deal – it’s pretty obvious. But what if a five percent loan costs $1,000 but a 4.5 percent loan costs $4,000? Which is a better deal? That’s where APR comes in. The APR of the five percent loan in this case is 5.09 percent. The APR for the second loan is 4.85 percent. That means over the life of the loan, the second loan costs less than the first loan.
Is the loan with the lowest APR always the best?
Many people think that the loan with the lowest APR is automatically the best deal. That’s not true unless you keep your mortgage for its entire term. If not, the upfront costs of getting your mortgage are spread out over a shorter period of time, and that changes the true cost of the loan. Look at our two $100,000 30-year fixed loans again, but this time we’ll assume that you’ll sell the home in five years.
When you change the first loan’s term from 30 years to five years, its APR increases from 5.09 percent to 5.41 percent. And the second loan with its $4,000 in costs? It increases from 4.85 percent to 6.12 percent!
ARMs
Because no one can predict how interest rates will change over the years, the APR for adjustable-rate mortgages is calculated on the assumption that the loan is adjusting at that time. So if you have a 5/1 mortgage starting at three percent, and if it were adjusting today its rate would be six percent, that’s the rate used in the APR calculation. Even though it’s highly unlikely that rates in five years will be exactly what they are today.
The most important thing to remember when comparing APRs of ARMs is that they are calculated based on current economic conditions. The APR of a loan on Monday may be different from the APR of that same loan on Friday. You need to get your mortgage quotes on the same day (preferably at the same time). This is easiest to manage by getting your quotes online.
CASH TO CLOSE RULES for LSI and PPCE
LSI:
If the borrowers funds due are under $1,500 then a personal check to LSI is acceptable.
If $1,500-$5000 they will can to bring in a cashier’s check to Title.
When the CASH TO CLOSE IS $5000 or more, funds will have to be wired in.
Wires and cashiers are always acceptable though regardless of the amount
PPCE
Personal checks are accepted up to $500.00 in California only.
( I personally Recommend cashiers checks or wires only )
Basically you can't close until the personal check clears. You may miss your
tier!! All out of state PPCE loans must be either sent via wire or cashiers checks only regardless
of the amount.
( Verified accounts only of course )
Q: Whats the rule of thumb in regards to Social security Income and what
documentation I need to request to support the income of an individual
receiving social Security income?
A: If the borrower is of " Retirement Age" then all you need is the 1099'='s
received by the recipient. If they are not of "Retirement Age"( 62 or more ) ,
then you need to request the Social Security Awards letter as well as the
1099's
A: Good question...I run into this all the time. We all do. I assume you got the following feedback on your DU Findings?
"This limited cash-out loan casefile was not underwritten according to the DU Refi Plus expanded
eligibility guidelines because the subject property was not identified as a Fannie Mae loan that is
eligible to be refinanced with DU Refi Plus. Refer to the Selling Guide for additional information
regarding why an existing loan may not be eligible to be refinanced using DU Refi Plus."...
If this is what you see, I see the same on a few on my loans too. The only thing you can do is call Fannie and " start a ticket #" whatever that is or possibly change the variation on the address you have.
Use the one you see on the fannie lookup tool or try changing the Street to ST, Avenue to AVE or IF you have a condo, take out the unit # and rerun DU try that. At the very least, maybe your fannie mae endorsement date is after the cutoff. The cutoff is 5/31/09 If that’s the deal, all you can do is call Fannie @ 877-722-6757 and make sure you have your FANNIE ID #. SAVE THAT LOAN BECAUSE I HEAR THAT HARP 3 WILL ENABLE THESE LOANS TO BE ELIGIBLE.
Q: I have a borrower that is a US citizen but is employed over seas and his income comes from a source based in the UK. Can I use this income and what are the reqs?
A: Foreign income (income generated from non-U.S. sources) may be used only if its stability and continuance can be verified, and is supported by U.S. Federal Tax Returns for the most recent two years. If the income is paid in a foreign currency the file must contain a printout evidencing the source used for the conversion of the foreign currency into U.S. dollars. The income must also be verified in the same manner as U.S. income sources
Q: Why is my NOTE RATE and APR different?
A: APR versus interest rate
When lenders advertise mortgage rates, they are required to display an additional number called the annual percentage rate, or APR.
The advertised rate is the one used to calculate your mortgage payment. Borrow $100,000 at five percent with a 30-year term, and the payment is $537. But an advertised rate tells you nothing about the cost of the loan or if it’s a good deal. Suppose you’re offered two loans. Both have a five percent rate, but one costs $1,000 and the other costs $4,000. They’re obviously not the same!
How is APR calculated?
In the example above, the payment for both loans is $537 per month. But because the first loan costs $1,000, you’re only actually getting $99,000 for that $537 monthly payment. When you pay $537 a month to borrow $99,000 the rate is 5.09 percent. The second loan costs $4,000, so for your $537 a month, you only get to borrow $96,000. In that case, the APR is 5.35%.
You don’t really need an APR calculation to tell you that the first loan is the better deal – it’s pretty obvious. But what if a five percent loan costs $1,000 but a 4.5 percent loan costs $4,000? Which is a better deal? That’s where APR comes in. The APR of the five percent loan in this case is 5.09 percent. The APR for the second loan is 4.85 percent. That means over the life of the loan, the second loan costs less than the first loan.
Is the loan with the lowest APR always the best?
Many people think that the loan with the lowest APR is automatically the best deal. That’s not true unless you keep your mortgage for its entire term. If not, the upfront costs of getting your mortgage are spread out over a shorter period of time, and that changes the true cost of the loan. Look at our two $100,000 30-year fixed loans again, but this time we’ll assume that you’ll sell the home in five years.
When you change the first loan’s term from 30 years to five years, its APR increases from 5.09 percent to 5.41 percent. And the second loan with its $4,000 in costs? It increases from 4.85 percent to 6.12 percent!
ARMs
Because no one can predict how interest rates will change over the years, the APR for adjustable-rate mortgages is calculated on the assumption that the loan is adjusting at that time. So if you have a 5/1 mortgage starting at three percent, and if it were adjusting today its rate would be six percent, that’s the rate used in the APR calculation. Even though it’s highly unlikely that rates in five years will be exactly what they are today.
The most important thing to remember when comparing APRs of ARMs is that they are calculated based on current economic conditions. The APR of a loan on Monday may be different from the APR of that same loan on Friday. You need to get your mortgage quotes on the same day (preferably at the same time). This is easiest to manage by getting your quotes online.
CASH TO CLOSE RULES for LSI and PPCE
LSI:
If the borrowers funds due are under $1,500 then a personal check to LSI is acceptable.
If $1,500-$5000 they will can to bring in a cashier’s check to Title.
When the CASH TO CLOSE IS $5000 or more, funds will have to be wired in.
Wires and cashiers are always acceptable though regardless of the amount
PPCE
Personal checks are accepted up to $500.00 in California only.
( I personally Recommend cashiers checks or wires only )
Basically you can't close until the personal check clears. You may miss your
tier!! All out of state PPCE loans must be either sent via wire or cashiers checks only regardless
of the amount.
( Verified accounts only of course )
Q: Whats the rule of thumb in regards to Social security Income and what
documentation I need to request to support the income of an individual
receiving social Security income?
A: If the borrower is of " Retirement Age" then all you need is the 1099'='s
received by the recipient. If they are not of "Retirement Age"( 62 or more ) ,
then you need to request the Social Security Awards letter as well as the
1099's
