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.
Advantages:
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.
Monday, September 26, 2011
Tuesday, September 20, 2011
New California Maximum FHA purchase price with 3.5% Down 10/1/2011
| County | Max FHA Price |
| Alameda | $648,187 |
| Alpine | $480,259 |
| Amador | $344,404 |
| Butte | $303,886 |
| Calaveras | $387,306 |
| Colusa | $280,881 |
| Contra Costa | $648,187 |
| Del Norte | $280,881 |
| El Dorado | $492,176 |
| Fresno | $291,969 |
| Glenn | $280,881 |
| Humboldt | $339,637 |
| Imperial | $280,881 |
| Inyo | $382,539 |
| Kern | $280,881 |
| Kings | $280,881 |
| Lake | $280,881 |
| Lassen | $280,881 |
| Los Angeles | $648,187 |
| Madera | $280,881 |
| Marin | $648,187 |
| Mariposa | $333,679 |
| Mendocino | $387,306 |
| Merced | $280,881 |
| Monterey | $500,518 |
| Napa | $613,731 |
| Nevada | $494,560 |
| Orange | $648,187 |
| Placer | $492,176 |
| Plumas | $349,171 |
| Riverside | $368,238 |
| Sacramento | $492,176 |
| 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 |
| Shasta | $283,627 |
| Siskiyou | $280,881 |
| Solano | $414,715 |
| Sonoma | $539,845 |
| Stanislaus | $286,010 |
| Sutter | $280,881 |
| Tehama | $280,881 |
| Tulare | $280,881 |
| Tuolumne | $343,212 |
| Ventura | $619,689 |
| Yolo | $492,176 |
| Yuba | $280,881 |
New California Maximum Loan Limits FHA & Conventional October 2011
| County | Maximum Loan |
| Alameda | 625,500 |
| Alpine | 463,450 |
| Amador | 332,350 |
| Butte | 293,250 |
| Calaveras | 373,750 |
| Colusa | 271,050 |
| Contra Costa | 625,500 |
| Del Norte | 271,050 |
| El Dorado | 474,950 |
| Fresno | 281,750 |
| Glenn | 271,050 |
| Humboldt | 327,750 |
| Imperial | 271,050 |
| Inyo | 369,150 |
| Kern | 271,050 |
| Kings | 271,050 |
| Lake | 271,050 |
| Lassen | 271,050 |
| Los Angeles | 625,500 |
| Madera | 271,050 |
| Marin | 625,500 |
| Mariposa | 322,000 |
| Mendocino | 373,750 |
| Merced | 271,050 |
| Monterey | 483,000 |
| Napa | 592,250 |
| Nevada | 477,250 |
| Orange | 625,500 |
| Placer | 474,950 |
| Plumas | 336,950 |
| Riverside | 355,350 |
| Sacramento | 474,950 |
| San Benito | 625,500 |
| San Bernardino | 355,350 |
| San Diego | 546,250 |
| San Francisco | 625,500 |
| San Joaquin | 304,750 |
| San Luis Obispo | 561,200 |
| San Mateo | 625,500 |
| Santa Barbara | 625,500 |
| Santa Clara | 625,500 |
| Santa Cruz | 625,500 |
| Shasta | 273,700 |
| Siskiyou | 271,050 |
| Solano | 400,200 |
| Sonoma | 520,950 |
| Stanislaus | 276,000 |
| Sutter | 271,050 |
| Tehama | 271,050 |
| Tulare | 271,050 |
| Tuolumne | 331,200 |
| Ventura | 598,000 |
| Yolo | 474,950 |
| Yuba | 271,050 |
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
amenity.
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
sales.
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.
C1
C2
C3
C4
C5
C6
The definitions for the ratings listed above are provided in Exhibit 1:
Level of Work Completed:
not updated
updated
remodeled
Definitions for the Level of Work Completed are provided in Exhibit 2:
Requirements – Definitions of Not Updated, Updated, and Remodeled.
Timeframes:
less than one year ago
one to five years ago
six to ten years ago
eleven to fifteen years ago
timeframe unknown
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
amenity.
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
sales.
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.
C1
C2
C3
C4
C5
C6
The definitions for the ratings listed above are provided in Exhibit 1:
Level of Work Completed:
not updated
updated
remodeled
Definitions for the Level of Work Completed are provided in Exhibit 2:
Requirements – Definitions of Not Updated, Updated, and Remodeled.
Timeframes:
less than one year ago
one to five years ago
six to ten years ago
eleven to fifteen years ago
timeframe unknown
Monday, August 29, 2011
New Appraisal Guidelines moved back to Jan 1, 2012 for FHA/HUD
On Monday August 22nd, Mortgagee Letter 2011-30 announced that the deadline for the new Uniform Appraisal Dataset (UAD) requirements has been pushed back to January 1. It will apply to FHA financed purchases (with case numbers assigned on or after Jan 1), and all HUD real estate owned (REO) and Pre-Foreclosure Sale (PFS) properties with an effective date on or after January 1, 2012.
The aim is to streamline the appraisal process and make appraisals more uniform. Appraisal management companies are working to teach and train appraisers to use the UAD, which will change the way appraisals are documented by setting standards throughout the appraisal process.
The UAD is part of a larger effort toward improving the appraisal process. In addition, a Uniform Collateral Data Portal (UCDP) will enable lenders to submit appraisal report forms electronically. Either format may be used in advance of the January 1 implementation date.
Previously, the implementation date for the UAD was set to September 1.
The aim is to streamline the appraisal process and make appraisals more uniform. Appraisal management companies are working to teach and train appraisers to use the UAD, which will change the way appraisals are documented by setting standards throughout the appraisal process.
The UAD is part of a larger effort toward improving the appraisal process. In addition, a Uniform Collateral Data Portal (UCDP) will enable lenders to submit appraisal report forms electronically. Either format may be used in advance of the January 1 implementation date.
Previously, the implementation date for the UAD was set to September 1.
Thursday, July 28, 2011
Upper-mid Range California Homes Market Softening
July 28 2011 - The demand for properties in the $650K-$750K space is now shrinking. We can expect softer prices ahead in Orange County, L.A., and the Bay Area. In San Diego, the impact extends down to $555K.
Why? Changes in the maximum loan limits for FHA and high balance conventional loans take effect in the weeks ahead. Filling the void are jumbo loans with higher rates (which require higher income to qualify) and higher down payments and reserves, which require substantially more assets.
For Los Angeles, Orange County, and the Bay Area the maximum loan limit for FHA and conventional (high-balance) lending is reduced to $625,500. For San Diego, it is $546,250.
Originally scheduled for Dec 31,2010, FHA loans need to fund by Sept 1, 2011 to allow time to insure by Oct 1, 2010. Conventional high balance loans must be originated before Sept 30, 2011.
Softer prices ahead in this part of the market spell opportunity for buyers who still qualify. Historically low interest rates remain in effect.
Friday, July 22, 2011
Appraisal Industry Changes
Many changes have occurred in the appraisal industry over the last two years with even more to come. The beginning of this year started with the start of Fin-Reg (in which the Consumer Finance Protection Bureau is now “open for business” with the last week) meaning fines are coming down quickly and hard.
Starting September 1, the way appraisers report their findings and the way they deliver a report will change. UAD stands for Uniform Appraisal Dataset which is the first part in a series of changes for how the overall loan is delivered to the GSE’s. They are doing this to make the appraisals more standardized as to what an appraiser might consider good condition in Texas is vastly different than what an appraiser in Connecticut might think. There are a total of 72 additions to the form with 60 being mandatory and 12 being optional. Phrases like neutral, beneficial and adverse will become standard. Very Good, Good and Average will be replaced in condition and quality fields with a 1 through 6 rating with 1 being exceptional and 6 being horrible. Appraisals will also have to be delivered in both a pdf and xml format. The appraisal software companies have started to release the UAD reports now with the xml capabilities within a week.
Some of the important changes are
1) FHA and VA are also using the UAD reports but not the delivery method
2) Appraisals MUST be sent to the GSE’s before the loan for conventional and jumbo loans (Not FHA or VA)
3) If the lender orders a field review that review is sent with the loan and not the original appraisal
4) If an appraisal is sent to the GSE’s in the new format incorrectly it will be kicked out and deemed unacceptable
5) GSE’s wont accept a C5 or a C6 rating for condition
6) Any C6 issue makes the whole property a C6 rating unless subject to repair
Make no mistake, these are major changes in the appraisal world in both reporting and technology.
Here is a link to a webinar if you would like to familiarize yourself with the changes.
http://fanniemae.articulate-online.com/ContentRegistration.aspx?DocumentID=77856aa3-4df3-4e13-895b-4e71b79a7ed7&Cust=77787&ReturnUrl=/p/7778730514
Starting September 1, the way appraisers report their findings and the way they deliver a report will change. UAD stands for Uniform Appraisal Dataset which is the first part in a series of changes for how the overall loan is delivered to the GSE’s. They are doing this to make the appraisals more standardized as to what an appraiser might consider good condition in Texas is vastly different than what an appraiser in Connecticut might think. There are a total of 72 additions to the form with 60 being mandatory and 12 being optional. Phrases like neutral, beneficial and adverse will become standard. Very Good, Good and Average will be replaced in condition and quality fields with a 1 through 6 rating with 1 being exceptional and 6 being horrible. Appraisals will also have to be delivered in both a pdf and xml format. The appraisal software companies have started to release the UAD reports now with the xml capabilities within a week.
Some of the important changes are
1) FHA and VA are also using the UAD reports but not the delivery method
2) Appraisals MUST be sent to the GSE’s before the loan for conventional and jumbo loans (Not FHA or VA)
3) If the lender orders a field review that review is sent with the loan and not the original appraisal
4) If an appraisal is sent to the GSE’s in the new format incorrectly it will be kicked out and deemed unacceptable
5) GSE’s wont accept a C5 or a C6 rating for condition
6) Any C6 issue makes the whole property a C6 rating unless subject to repair
Make no mistake, these are major changes in the appraisal world in both reporting and technology.
Here is a link to a webinar if you would like to familiarize yourself with the changes.
http://fanniemae.articulate-online.com/ContentRegistration.aspx?DocumentID=77856aa3-4df3-4e13-895b-4e71b79a7ed7&Cust=77787&ReturnUrl=/p/7778730514
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