As we discussed in prior updates, FHA is changing the process for approving Condo projects, and will be eliminating the “Spot Approval” process. They have delayed the implementation of the new process until Nov 2. NOTE: Many wholesale lenders have already stopped doing “spot approvals” in anticipation of this change - so understand that some brokers and other lenders may already be unable to do spot approvals.
We can STILL DO spot approvals, at least for now, for FHA case numbers issued prior to Nov 2. Call me if you have any buyers who are trying to close on a condo for the First Time Homebuyer Tax Credit!
FHA announced many changes this week, issuing 5 Mortgagee Letters. One announcement is that after Jan 1, FHA is adopting HVCC is most of it’s current form - the same one adopted by Fannie & Freddie in May. That means that mortgage originators will no longer be able to order appraisals from appraisers directly for FHA appraisals. In addition, FHA appraisals will now be good for 4 months, instead of 6 months as before - and they clarified how to handle the appraisal when borrowers switch lenders on an FHA loan. They re-stated that the initial lender must transfer the appraisal to the new lender, but also allowed for a second appraisal to be ordered in specific instances.
Realtors may still provide comps to appraisers on FHA transactions, but not an estimate of value - a fine distinction.
Keep in mind - this change will have no impact on Wells Fargo, as we are already in compliance. We have a good process already for appraisals, no worries with us on this one!
Additionally, FHA announced some items they are considering - instead of a net worth of $250,000, lenders must have a net worth of $1 million. Mortgage brokers will no longer get individual FHA licences, they would originate through larger lenders who would assume the risk for those loans. It is unclear what these proposed changes would mean - it could mean that more brokers will have access to FHA, but it could also mean that many medium size companies will no longer meet the net worth requirement. Regardless of how that plays out, remember that you really want an FHA expert working with your buyers - don’t let loan officers get their “on the job training” on your files!
Remember to try and get your First Time Homebuyers moving! We anticipate a large amount of loan volume in November due to this deadline. Again, our offer - for only $50, buyers can go ahead and get their loan APPROVED with our company, in parallel with shopping for the right home. They’ll get an approval, pending only a sales contract and appraisal - which puts them in a stronger position with the seller, and certainly can speed up the closing time. Let me know if you have any buyers who want to get this going to beat the rush!
I hope each of you and your families are well, and that you stayed dry!
Due to the widespread damage by the flooding, and with 17 counties declared as “Disaster Areas” - lenders will generally require that any appraisals completed PRIOR to the flood, on deals not yet funded, must be re-inspected to insure they were not affected by the disaster. With many lenders, this means they will need to order a re-inspection by the appraiser, which will generally cost about $100. Talk to the lender on any deals you have in process to ensure they are on top of this, so that your closings are not impacted.
Here at The Ryan Mortgage Team, we have a commitment to superior customer service, and we have the manpower to assist in times like these. Our policy is that the re-inspections can be completed by a an employee, as long as that employee is not directly compensated on that loan. That means that we have been able to complete the needed re-inspections with no impact to closing dates, and with NO FEES charged to our borrower clients.
Just one more reason to work with us!
