Friday, September 30, 2011

Waiting Period After Short Sale of a Home Purchased with a VA Loan

Borrowers are required to wait for two years before applying for a new VA home loan. A qualifying credit score and a record of dependable payments during the waiting period following a short sale is required.

Borrowers must apply to have their VA loan eligibility restored by filing a copy of VA Form 26-1880 to the Winston-Salem Eligibility Center.

One thing could prevent a buyer from getting eligibility restored right away. If the VA paid a compromise claim as part of a short sale, the borrower may be indebted to the government as a result of that claim. The Department of Veterans Affairs may not restore eligibility if the applicant still owes money to the government.

Here is the specific wording:

“…although the veteran’s debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.”

If a VA loan applicant is notified that a debt to the government exists, or was aware of the debt prior to applying for the loan, the applicant should contact the VA directly to work out the details of repayment before applying for a new VA mortgage.

A borrower may still be able to take advantage of any unused VA loan eligibility. Any remaining entitlement may be allowed if a borrower did not use the full entitlement on the previous VA mortgage.

A borrower’s debt for a compromise claim may be factored into the debt-to-income ratio, unless the lender feels the compromise claim debt is too great compared to other financial factors. That debt may result in the need for a down payment, or a larger down payment than usual – requirements will vary from lender to lender.

Monday, September 26, 2011

Are VA Loans Assumable?

An assumable loan allows the buyer to take over the obligation of the seller's loan
with no change in loan terms. Generally, a loan without a "Due-On-Sale Clause" is assumable.


If loan rates have increased since the seller got the loan, the old loan may carry a lower interest rate than a new loan, and the buyer won't have to pay as much in fees.
Also, more of the monthly payments on the loan will be going toward the principal balance instead of interest because the loan term will be reduced by the time since the loan began.

VA Assumablility

There are two ways to assume a VA loan,but only one of them is a good idea for the seller.
First, if the new buyer is a qualified Veteran, he can "substitute" his eligibility for the eligibility of the seller. In addition, the new buyer qualifies through VA standards for the mortgage payment.
This is the safest way for a seller to allow their loan to be assumed. The new buyer is responsible for the loan and the seller has no further liablility for the repayment of the loan. By obtaining a "release of liability" from the VA, the seller can then use their full eligibility to purchase another home right away using their VA loan.

The second way is if the new buyer is not a veteran or qualified for a VA loan, they have no eligibility to give the seller. If the seller grants permission for the new buyer to take over their loan, the seller does not get back their eligibility to use on another home, and the seller is still liable for the payments should the buyer default!

For this reason, A VA seller and their realtor, should be very careful about offering their home with an assumable loan.

Tuesday, September 20, 2011

New California Maximum FHA purchase price with 3.5% Down 10/1/2011

CountyMax FHA Price
Contra Costa$648,187
Del Norte$280,881
El Dorado$492,176
Los Angeles$648,187
San Benito$648,187
San Bernardino$368,238
San Diego$566,062
San Francisco$648,187
San Joaquin$315,803
San Luis Obispo$581,554
San Mateo$648,187
Santa Barbara$648,187
Santa Clara$648,187
Santa Cruz$648,187

New California Maximum Loan Limits FHA & Conventional October 2011

CountyMaximum Loan
Contra Costa625,500
Del Norte271,050
El Dorado474,950
Los Angeles625,500
San Benito625,500
San Bernardino355,350
San Diego546,250
San Francisco625,500
San Joaquin304,750
San Luis Obispo561,200
San Mateo625,500
Santa Barbara625,500
Santa Clara625,500
Santa Cruz625,500

Tuesday, September 13, 2011

New UAD Forms and Codes

These are the four new required Appraisal forms, effective Sept 1, 2011 for all FNMA/FHLMC transactions.

Uniform Residential Appraisal Report (Fannie Mae Form 1004/Freddie Mac Form 70)

Individual Condominium Unit Appraisal Report
(Fannie Mae Form 1073/Freddie Mac Form 465)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075/Freddie Mac Form 466)

Exterior-Only Inspection Residential Appraisal Report (Fannie Mae/Freddie Mac Form 2055)

Here is the checklist for the new codes:

UAD‐01: Real estate taxes and/or special assessments are to be entered in whole dollars only.
UAD‐02: If there are no HOA fees or Special Assessments, enter the numeral zero (0).
UAD‐03: If there is a HOA or the subject is a condo, answer yes or no for the question, “Is the
developer/builder in control of the Homeowners’ Association (HOA)?”
UAD‐04: If the subject property is currently offered for sale or has been offered for sale in the 12 months
prior, report the data source(s) used, offering price(s), Days on Market and date(s). If the answer is ‘No,’ the
data source(s) used must be provided.
UAD‐05: For a purchase transaction, in the contract section state what the sale type is.
UAD‐06: Provide an outline of the neighborhood boundaries clearly delineated using ‘North’, ‘South’, ‘East’,
and ‘West’
UAD‐07: For sites/parcels that have an area of less than one acre, the size must be reported in square feet ‐
whole numbers only. For sites/parcels that have an area of one acre or greater, the size must be reported in
acreage to two decimal places. The unit of measure must be indicated as either ‘sf’ for square feet or ‘ac’ for
acres. (for subject and comparables)
UAD‐08: View rating must be N, B or A along with an abbreviated factor. (site section and grid)
UAD‐09: For utilities, other must be accompanied with a description; if it is not present, enter ‘None’.
UAD‐10: Indicate whether the street or alley type is ‘Public’ and/or ‘Private’. Enter ‘None’ in the appropriate
description field if there is no street or alley.
UAD‐11: # of stories (and # of levels for a condo) can only be numeric; omit descriptors.
UAD‐12: If there is commercial space in the condo project, check yes at the bottom of page 1and indicate
overall % of commercial space – 2 digits, whole numbers only.
UAD‐13: Design style should be an architectural design such as ‘Colonial’, ‘Rambler’ ect. Descriptors such as ‘2
stories’ or ‘conventional’ are not architectural styles.
UAD‐14: If year date is unknown, estimate the year it was built with a tilde (~) preceding the year built.
UAD‐15: Indicate the basement size in square feet and the percentage of the basement that is finished. If there
is no basement, enter the numeral zero (0) in both fields ‐ whole numbers only.
UAD‐16: If there is no heating or cooling source, indicate ‘Other’ and enter ‘None’.
UAD‐17: For amenities, enter the numeral zero (0) in the appropriate space if there are no fireplaces or
woodstoves. Enter ‘None’ in the appropriate space if there is no patio/deck, pool, fence, porch, or other
UAD‐18: For car storage, enter the number of spaces in whole numbers only for each type. If none, enter the
numeral zero (0) for # of cars.
UAD‐19: Baths should include the total number of baths above grade. A three‐quarter bath is to be counted as
a full bath in all cases. Quarter baths (baths that feature only a toilet) are not to be included in the bathroom
count. The number of full and half baths must be entered, separated by a period. The full bath count is
represented to the left of the period. The half bath count is represented to the right of the period.
UAD‐20: Condition must state the rating, then indicate ‘Yes’ or ‘No’ if there has been any material work done
to the kitchen(s) or bathroom(s) in the prior 15 years. If ‘No’, the text ‘No updates in the prior 15 years’ must
be provided; if ‘Yes’, additional information for kitchens and bathrooms must be provided including ‘not
updated’, ‘updated’ or ‘remodeled’ and the timeframe.
UAD‐21: Condition rating (for the subject and comps) must be in UAD format; select one of the following: C1,
C2, C3, C4, C5 or C6.
UAD‐22: Addresses for the comparables must include the address, city, state and zip code.
UAD‐23: Proximity must be in miles and 2 decimal places, along with the word ‘miles’ and direction (NW).
UAD‐24: The subject sales price must match the contract price in whole dollars.
UAD‐25: Data source for comparables must be given with the identifying number; then DOM must appear. If
not listed, enter numeral zero (0). If DOM is unknown, enter ‘Unk’.
UAD‐26: Indicate the sales type for each comparable property with the UAD abbreviation.
UAD‐27: Enter the financing type in UAD abbreviation; and total amount of concessions. If none, enter the
numeral zero (0). If other, indicate if sales transactions with below‐market financing are used for comparable
UAD‐28: Enter the status type abbreviation for the settlement date; followed by the contract date in mm/yy
format. Use ‘Unk’ if the contract date is unknown.
UAD‐29: Location rating must be N, B or A along with an abbreviated factor.
UAD‐30: Actual age for a new construction less than a year old should be (0) do not enter additional
information such as ‘years’. If actual age is unknown, estimate the age with a preceding tilde (~).
UAD‐31: Quality of construction rating (for the subject and comps) must be in UAD format; select one of the
following: Q1, Q2, Q3, Q4, Q5 or Q6.
UAD‐32: If no basement, enter (0) in the grid, otherwise indicate finished sq ft, do not indicate a % finished.
Type of access should be wo, wu or in. Then indicate the type of finished rooms by abbreviation or enter (0)
if there are no rooms of a particular type.
UAD‐33: Enter any energy efficient items or enter ‘None’.
UAD‐34: Off‐street parking spaces are to be entered on the garage/carport line or enter ‘None’.
UAD‐35: If no adjustment is warranted, enter a zero (0). When the features are the same, leave the field blank.
UAD‐36: Active listings must state ‘Active’ in the date field.
UAD‐37: Leave the supervisory appraiser field blank; do not enter N/A or none.
UAD‐38: AMC name should be entered in the Lender/Client section of the certification only

Interior/Exterior Complete Inspection Reports:
Overall Condition Rating – The appraiser must select one of the following ratings
that best describes the overall condition of the subject property or unit. Only one selection is permitted. The rating for the subject property must match the overall condition rating that is reported in the
Sales Comparison Approach section.
The definitions for the ratings listed above are provided in Exhibit 1:

Level of Work Completed:
not updated
Definitions for the Level of Work Completed are provided in Exhibit 2:
Requirements – Definitions of Not Updated, Updated, and Remodeled.
less than one year ago
one to five years ago
six to ten years ago
eleven to fifteen years ago
timeframe unknown