12/16/2015

Mortgage Credit Report

Mortgage details and things I'm seeing regarding credit:

Forgiveness of debt in a modification is treated the same as short sale.
Wait is four years for conventional loans and three for FHA


Mortgage Credit reports should be read and interpreted by an expert. The lady in the credit union that takes your papers to be processed for a loan can misinterpret or miss read. It is vital to view a mortgage credit report on day one  with regards to derogatory credit events and the proper calculation for seasoning.

·      Fannie Mae only – The foreclosure seasoning can be reduced from 7 years to 4 years if the property is surrendered in the Chapter 7 bankruptcy.  Make sure the property is listed on the Chapter 7 form Debtor’s Statement of Intention and marked as surrendered.  This reduced seasoning does not apply for foreclosures that
occurred prior to the filing of the bankruptcy in which only an unsecured deficiency balance is listed in the bankruptcy.


·         All loan types – A HELOC settled for less than full balance can occur even if there is no short sale or foreclosure.  Lien Holders can be approached with a request to reduce the balance, or the Lien Holder may initiate the settlement.  Determine the property address associated with the HELOC or 2nd mortgage. Even if the borrower still owns the property, sufficient seasoning will be required as the lender has taken a aloss.  This would be considered a pre-foreclosure situation requiring 4 year seasoing for Fannie or Freddie, 3 year seasoning for FHA or USDA, and 2 year seasoning for VA, from the date of the settlement/foregiveness.



11/27/2015

Grateful At Home








I hope you are enjoying the holiday weekend!

My son is home from college and I am
blessed this year.

Grateful for being able to help you
with closing your mortgage loan.

I'm available over the weekend for
questions, just whistle.

Let's get you into your happy home.

C G
(949) 784-9600

11/13/2015

95% Jumbo Mortgage


Up till now the required  minimum down payment on high balance loans was 10%. Starting next month we will only require 5% down on these types mortgages. Read below for all revisions.

As a direct lender with all operations in-house we can close these type loans in 30 days.

We have what it takes!


This summary is great news. This is not a commitment to lend or give you a 95% Jumbo conventional high balance loan for California counties that the high balance 
loan limit is $625,500.00
Other counties such as Riverside the loan amount is lower. 
See below for dollar amounts. 
These dollar amounts do change annually.
 All criteria are subject to the formal terms and conditions 
of the Fannie Mae Selling Guide. 

High-Balance Loans: Policy Update Summary
Effective with the implementation of Desktop Underwriter® (DU®) 

Fannie Mae will update the eligibility requirements for high-balance mortgage loans as follows 
for details and the high-balance product matrix more information will be released
 Removed: Overlays requiring a 5% minimum borrower contribution from borrower’s own funds; an appraisal field review for loans of more than $625,000 and a loan to value or combined loan to value ( LTV CLTV) above 80%; and the appraisal to have two comparable sales from outside the subject project when loan is secured by a condominium unit.
 Aligned: Maximum LTV/CLTV/HCLTV ratios for borrowers with 5−10 financed properties aligned with the requirements for loans subject to the general loan limits.
 Retained: An appraisal field review is required for properties valued at $1 million or more with an LTV/CLTV/HCLTV above 75%; and all borrowers must have traditional credit to qualify.
 New: High-balance loans must be underwritten through DU.
 Updated: Eligibility ratios as shown in the table.
Property Type
Maximum Loan-to-Value (LTV) Ratio for High-Balance Loans
NEW Effective December 12, 2015
Before Update
Purchase Transaction
1-unit principal residence
FRM: 95%; ARM: 90%
FRM: 90%; ARM: 75%
2-unit principal residence
FRM: 85%; ARM: 75%
FRM: 75%; ARM: 65%
3- to 4-unit principal residence
FRM: 75%; ARM: 65%
Second Home
FRM: 90%; ARM: 80%
FRM/ARM: 65%
1-unit investment
FRM: 85%; ARM: 75%
2- to 4-unit investment
FRM: 75%; ARM: 65%
Limited Cash-Out Refinance Transaction
1-unit principal residence
FRM: 95%; ARM: 90%
FRM:90%; ARM: 75%
2-unit principal residence
FRM: 85%; ARM: 75%
FRM: 75%; ARM: 65%
3-4-unit principal residence
FRM: 75%; ARM: 65%
Second Home
FRM: 90%; ARM: 80%
FRM/ARM: 65%
1-unit investment
FRM: 75%; ARM: 65%
2-4-unit investment
Cash-Out Refinance Transaction
1-unit principal residence
FRM: 80%; ARM: 75%
FRM/ARM: 60%
2- to 4-unit principal residence
FRM: 75%; ARM: 65%
Not available
Second Home
1-unit investment
2- to 4-unit investment
FRM: 70%; ARM: 60%

Counties that increased loan limit in 2015 

Monterey County CA SALINAS, CA  $                 483,000  $            502,550  $      19,550
Napa County CA NAPA, CA  $                 592,250  $            615,250  $      23,000
San Diego County CA SAN DIEGO-CARLSBAD, CA  $                 546,250  $            562,350  $      16,100


County Name
One-Unit Limit
Two-Unit Limit
Three-Unit Limit
Four-Unit Limit


ALAMEDA
$729,750
$934,200
$1,129,250
$1,403,400

ALPINE
$547,500
$700,900
$847,200
$1,052,900

AMADOR
$443,750
$568,050
$686,650
$853,350

BUTTE
$417,000
$533,850
$645,300
$801,950

CALAVERAS
$462,500
$592,050
$715,700
$889,450

COLUSA
$417,000
$533,850
$645,300
$801,950

CONTRA COSTA
$729,750
$934,200
$1,129,250
$1,403,400

DEL NORTE
$417,000
$533,850
$645,300
$801,950

EL DORADO
$580,000
$742,500
$897,500
$1,115,400

FRESNO
$417,000
$533,850
$645,300
$801,950

GLENN
$417,000
$533,850
$645,300
$801,950

HUMBOLDT
$417,000
$533,850
$645,300
$801,950

IMPERIAL
$417,000
$533,850
$645,300
$801,950

INYO
$437,500
$560,050
$677,000
$841,350

KERN
$417,000
$533,850
$645,300
$801,950

KINGS
$417,000
$533,850
$645,300
$801,950

LAKE
$417,000
$533,850
$645,300
$801,950

LASSEN
$417,000
$533,850
$645,300
$801,950

LOS ANGELES
$729,750
$934,200
$1,129,250
$1,403,400

MADERA
$425,000
$544,050
$657,650
$817,300

MARIN
$729,750
$934,200
$1,129,250
$1,403,400

MARIPOSA
$417,000
$533,850
$645,300
$801,950

MENDOCINO
$512,500
$656,100
$793,050
$985,600

MERCED
$472,500
$604,900
$731,150
$908,650

MODOC
$417,000
$533,850
$645,300
$801,950

MONO
$529,000
$677,200
$818,600
$1,017,300

MONTEREY
$729,750
$934,200
$1,129,250
$1,403,400

NAPA
$729,750
$934,200
$1,129,250
$1,403,400

NEVADA
$562,500
$720,100
$870,450
$1,081,750

ORANGE
$729,750
$934,200
$1,129,250
$1,403,400

PLACER
$580,000
$742,500
$897,500
$1,115,400

PLUMAS
$417,000
$533,850
$645,300
$801,950

RIVERSIDE
$500,000
$640,100
$773,700
$961,550

SACRAMENTO
$580,000
$742,500
$897,500
$1,115,400

SAN BENITO
$729,750
$934,200
$1,129,250
$1,403,400

SAN BERNARDINO
$500,000
$640,100
$773,700
$961,550

SAN DIEGO
$697,500
$892,950
$1,079,350
$1,341,350

SAN FRANCISCO
$729,750
$934,200
$1,129,250
$1,403,400

SAN JOAQUIN
$488,750
$625,700
$756,300
$939,900

SAN LUIS OBISPO
$687,500
$880,100
$1,063,850
$1,322,150

SAN MATEO
$729,750
$934,200
$1,129,250
$1,403,400

SANTA BARBARA
$729,750
$934,200
$1,129,250
$1,403,400

SANTA CLARA
$729,750
$934,200
$1,129,250
$1,403,400

SANTA CRUZ
$729,750
$934,200
$1,129,250
$1,403,400

SHASTA
$423,750
$542,450
$655,700
$814,900

SIERRA
$417,000
$533,850
$645,300
$801,950

SISKIYOU
$417,000
$533,850
$645,300
$801,950

SOLANO
$557,500
$713,700
$862,700
$1,072,150

SONOMA
$662,500
$848,100
$1,025,200
$1,274,050

STANISLAUS
$423,750
$542,450
$655,700
$814,900

SUTTER
$425,000
$544,050
$657,650
$817,300

TEHAMA
$417,000
$533,850
$645,300
$801,950

TRINITY
$417,000
$533,850
$645,300
$801,950

TULARE
$417,000
$533,850
$645,300
$801,950

TUOLUMNE
$437,500
$560,050
$677,000
$841,350

VENTURA
$729,750
$934,200
$1,129,250
$1,403,400

YOLO
$580,000
$742,500
$897,500
$1,115,400

YUBA
$425,000
$544,050
$657,650
$817,300 

11/11/2015

Chase Mortgage Cough



This morning I spoke at Laguna Board of Realtors Preview Meeting. A question was raised about if lenders and Underwriters are being harder on files. I answered that it is not Underwriters is is the policy of the given secondary source. Fannie Mae and Freddie Mac are maintaining cautious and careful rules. A few minor conditions have been loosened as we get farther away from the crash but I said one particular broker banker correspondant source has become more picky and more bitter coffee to deal with and that is J P Morgan Chase.

Chase is of the new habit of pricing very cheap and turning down loans after they have been shipped.
Sometimes the reasons are so small minded it appears they are cherry picking after the fact. Today Chase came out with a memo perhaps to make excuses for this recent dump on wholesale providers.
Here's the list of reasons Chase says they are giving back funded loans (these are all Jumbo not conforming not high balance mortgage types). This list you will note does not include some of the cough cough reasons they really dumped back loans to banker / brokers


Note: Information is valid as of 9/14/15 and is subject to change.

Overview Based on loans recently reviewed by our Non-Agency Underwriters, we have developed
these best practices which can help manage your pipeline and drive down suspense rates
when submitting Non-Agency loans to Chase.
Best Practices for Collateral
Initial Collateral Review: Attached your 1st Gen/xml file to Appraisal Data/1st Gen upload in
ChaseLoanManager.
Revised appraisals associated with collateral conditions must be uploaded in ChaseLoanManager > Image
Delivery as:
 UW Conditions for non-delegated
 Funding Conditions for delegated
Non-Delegated Delegated
 Include comparison of PUD common elements
and amenities with competing developments
 Identify and describe common elements
appropriately
 Ensure Appraiser provides appropriate comments
reflecting reasoning for adjustments
 Ensure Appraiser reconciles indicated values of
the comparable sales and explains weighting and
rational to derive the final value conclusion
 Provide a complete 1004D with photos
 Document reasoning when there is a meaningful
discrepancy between public record data and
Appraiser reported information for subject or
comps
 Include all required comp photos
 Use of MLS photos is discouraged unless a
satisfactory explanation is provided
 Appraiser must comment on using any
comparable sale that’s more than 6 months old
 Do not provide comparable sales that are dissimilar
to subject property without detailed
discussion
 Provide a complete 1004D with photos
 Include comparison of PUD common elements
and amenities with competing developments
 Identify and describe common elements
appropriately
 Ensure Appraiser reconciles indicated values of
the comparable sales and explains weighting and
rational to derive the final value conclusion
 Include all Appraisal Data
 Ensure Appraiser provides appropriate comments
reflecting reasoning for adjustments
 Appraiser to comment on using any comparable
sale that’s more than 6 months old
 Document reasoning when there is a meaningful
discrepancy between public record data and
Appraiser reported information
 New PUD/Project: A comparable sale must come
from within the subject’s subdivision or condo
project
Top Underwriting Conditions
When reviewing a loan, Chase Underwriters encounter missing or deficiencies in documentation related to:
 Profit and Loss Statement and Balance
Sheet is missing
 Source of Funds for Large Deposits
 12-month Housing History
 HELOC Closures
 Credit Inquiry LOE
 K-1s / Business Returns
 VOE with Variable Income (bonus,
commission, OT, etc.)
 Current, Legally Enforceable Lease
Agreements
 Bank Statement Debts Not Addressed
 Payroll Loans/Deductions not included in
DTI and evidence fully secured is absent
CORRESPONDENT LENDING
Non-Agency Loans
Note: Information is valid as of 9/14/15 and is subject to change.
Non-Agency Best Practices - Final 100515.docx Page 2 of 2
Best Practices
Top Denial Reasons
The top reasons for a loan being denied by Chase are as follows:
HELOCS (Subject and
REO)
If a HELOC can still be drawn upon (open end), which includes HELOCs that
are frozen (since the freeze could be lifted by the creditor), the payment used in
the DTI calculation is the higher of:
 Payment shown on credit report (or obtained from documentation from the
creditor), or
 1% of the full line amount
Self Employed
Debts Payable < 1 Year
Mortgages, Notes and Bonds payable in less than one year must be deducted
from the self-employed income by the amount of the debt, regardless if the
business has sufficient assets to cover the debt or the debt has a history of
rolling over.
DTI  Bonus income < 2 years
 Ineligible add backs to business income (NOL, amortization, home office)
 Declining income reflected on YTD P&Ls
 Personal debt not included in liabilities due to evidence other party pays or <
10 months remain
 2106 expenses not deducted from income
Self Employed < 2
Years
Self-employed borrowers should exhibit the following stability standards:
 Minimum of two years operating the same business
 Minimum of two years operating each additional business used to qualify
 Potential for maintaining continuous operation of business and income
 Documented ability to meet current and future obligations when income is
fluctuating
 Independent verification, prior to closing, that the borrower is self-employed
 Provide a 24 month history of self-employment, regardless of work history
 Minimum of 12 months self-employment, reflected on tax returns
o If tax returns do not reflect the complete 24 month period (due to
timing), then P&L and balance sheet must be provided covering the
remaining period
Student Loan Payments  All student loans must be included in the debt ratio regardless of deferment
status or number of payments remaining
 If payment amount can be verified by credit report or by student loan lender
documentation supplied by the borrower, then use the greater of 1% of the
outstanding balance or actual payment
 If payment amount cannot be documented, then use payment based on 1%
of the outstanding balance