In an effort to reduce consumer confusion when it comes to obtaining a loan, the federal government enacted reforms to the Department of Housing and Urban Development began, on January 1, 2010, to require the use of a standardized form of Good Faith Estimate (GFE). The concept behind the reform makes sense, but in reality, not much has changed.
The charges on a good faith estimate are now broken into three parts. The first part contains fees that CANNOT change. These are your lender fees. The goal is to impair a lender's attempts to pull a bait and switch on a borrower. There is no tolerance for any deviation between this part of the terms of the good faith estimate and the actual costs at closing.
Showing posts with label mortgage loan. Show all posts
Showing posts with label mortgage loan. Show all posts
Tuesday, December 14, 2010
Wednesday, June 2, 2010
Fannie Mae's new rules for post-shortsale buyers
Many people wonder "what is the effect of a short sale on the ability to get a loan in the future"?
Fannie Mae, the company that securitizes mortgage loans, making them more affordable and the entity largely responsible for the guidelines that regulate most conventional mortgages, has provided a bit of an answer. Fannie Mae has released announcement SEL-2010-05 which sets forth the new requirements for home buyers to obtain a new loan if they have participated in a "pre-foreclosure event" (ie. a pre-foreclosure sale, a short sale, or a deed in lieu of foreclosure). Until now, there was no policy on short-sales. The new regulations go into effect on July 1, 2010.
For borrowers with a pre-foreclosure event in their past, there will be a waiting period before a new loan can be obtained. The amount of downpayment provided by the borrower will affect the length of the waiting period. The periods are as follows:
20% downpayment - 2 years
10% downpayment - 4 years
less than 10% downpayment - 7 years
The waiting period begins upon the completion date of the pre-foreclosure event. In addition, after 2 years with 90% LTV and with extenuating circumstances, a lender may be able to obtain an exception to the waiting period.
Guidelines can change on a regular basis, but for know, property owners considering a short sale or a deed in lieu of foreclosure will at least have an idea of some of the consequences of the pre-foreclosure event.
Fannie Mae, the company that securitizes mortgage loans, making them more affordable and the entity largely responsible for the guidelines that regulate most conventional mortgages, has provided a bit of an answer. Fannie Mae has released announcement SEL-2010-05 which sets forth the new requirements for home buyers to obtain a new loan if they have participated in a "pre-foreclosure event" (ie. a pre-foreclosure sale, a short sale, or a deed in lieu of foreclosure). Until now, there was no policy on short-sales. The new regulations go into effect on July 1, 2010.
For borrowers with a pre-foreclosure event in their past, there will be a waiting period before a new loan can be obtained. The amount of downpayment provided by the borrower will affect the length of the waiting period. The periods are as follows:
20% downpayment - 2 years
10% downpayment - 4 years
less than 10% downpayment - 7 years
The waiting period begins upon the completion date of the pre-foreclosure event. In addition, after 2 years with 90% LTV and with extenuating circumstances, a lender may be able to obtain an exception to the waiting period.
Guidelines can change on a regular basis, but for know, property owners considering a short sale or a deed in lieu of foreclosure will at least have an idea of some of the consequences of the pre-foreclosure event.
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