Looking for a great deal

Freddie Mac's website that sells their inventory of foreclosed properties can be found by clicking here. Not to be outdone, Fannie Mae's website that sells their REOs can be found by clicking here. Happy hunting.

Knowing what the servicers know - The Servicer Handbook

This is a link to the new handbook provided by the government for servicers to comply with the Home Affordability Modification Program.

Previously, I had directed students to Supplemental Directives, which detail requirements in each individual topic. This handbook should minimize the need to read Supplemental Directives because it reorganizes the topics coherently for functionality and practicality. As always, stay tuned to new versions, which will of course optimize this product.

FHA Loan Modifications now available for Non-FHA Loans

A brand new program by FHA, click here to learn more.

To learn about mortgagee (lender) guidelines, click here.

This new program expires 12/31/2012.

Here are the requirements for participation:

1. The homeowner must be in a negative equity position;


2. The homeowner must be current on the existing mortgage to be refinanced;

3. The homeowner must occupy the subject property (1-4 units) as their primary residence;

4. The homeowner must qualify for the new loan under standard FHA underwriting

requirements and possess a “FICO based” decision credit score greater than or equal to 500;

5. The existing loan to be refinanced must not be a FHA-insured loan;

6. The existing first lien holder must write off at least 10 percent of the unpaid principal balance;

7. The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent;

8. Non-extinguished existing subordinate mortgages must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent;

9. For loans that receive a “refer” risk classification from TOTAL Mortgage Scorecard (TOTAL) and/or are manually underwritten, the homeowner’s total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income and total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income;

10. FHA mortgagees are not permitted to use premium pricing to pay off existing debt obligations to qualify the borrower for the new loan;

11. FHA mortgagees are not permitted to make mortgage payments on behalf of the borrowers or otherwise bring the existing loan current to make it eligible for FHA insurance; and

12. The existing loan to be refinanced may not have been brought current by the existing first lien holder, except through an acceptable permanent loan modification as described below.