Currently we are looking at 8 additional days from the time the loan has been approved through underwriting and it is submitted to USDA. They are getting slightly better at handling the volume of these loans.... more
It's going to be tough for the smaller mortgage shops to stick around due to the cost limits and DTI requirements. We are a Fannie and Freddie Direct lender and here is the communication we received this week:
Ability-to-Repay (ATR)/Qualified Mortgage (QM) is a provision of the Dodd-Frank Act that becomes effective with applications received by the creditor on or after January 10, 2014.
Ability-to Repay (ATR) - sets minimum standards the creditor must use to determine that a consumer has the ability to repay the mortgage they are extended. The ATR rule provides eight specific factors to consider when determining eligibility:
1. Current and Reasonably expected income or assets
2. Current employment status
3. Monthly payment on the covered transaction
4. Monthly payment on any simultaneous loan
5. Monthly payment for the mortgage-related obligations
6. Current debt obligations, alimony and child support
7. Monthly debt-to-income ratio or residual income
8. Credit history
Covered Transactions - Closed end transactions secured by a 1-4 unit dwelling.
2. Reverse Mortgages
3. Initial construction loan
4. Time-share plans
5. Bridge loans
6. Construction phase of construction-to-permanent loans... more
Yes, the appraisal stays with the property for SIX months (not 4). If there is a change in the property (improvements) the improvements must be verified by the ORIGINAL appraiser.
In fact, I have a transaction right now where the seller installed a new roof in between the time the first FHA appraisal was completed and the second FHA appraisal was completed. The underwriter is using both appraisals and, in addition to having the second appraiser verify the new roof, the underwriting is requiring additional third party information about the new roof. In other words, the first appraiser has to go out to the property to verify the new roof. The city permit was not sufficient for the underwriter.... more