Aurora HOAP

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CITY OF AURORA HOME OWNERSHIP ASSISTANCE PROGRAM
Founded in 1984, the City of Aurora’s Home Ownership Assistance Program (HOAP) is

dedicated to making affordable housing a realization for low to moderate

income families in Aurora.
This is a one time assistance per family program.
NEW REQUIREMENTS FOR CLOSINGS OCCURRING ON/AFTER 02-01-2014:
BUYER CANNOT ALREADY HAVE A SIGNED CONTRACT WHEN THEY

APPLY FOR (HOAP) ASSISTANCE.
BUYER MUST HAVE VERIFIABLE SAVINGS EQUAL TO 2 MONTHS ESTIMATED

PITI AT THE TIME OF APPLICATION.
BUYER MUST HAVE VERIFIABLE AND CONTINUOUS 2 YEAR WORK

HISTORY. BUYER MUST PROVIDE 3 MONTHS BANK STATEMENTS AT

APPLICATION WITH NO INSUFFICIENT FUNDS CHARGES EVIDENT.

CREDIT REPORTS WILL BE USED TO VERIFY BUYER’S DEBT

OBLIGATIONS. DEBT TO INCOME RATIOS: 31% FRONT AND 50% BACK END WILL BE

ENFORCED. ALL INSPECTION CONDITIONS / REPAIRS MUST BE COMPLETED

PRIOR TO LOAN CLOSING_NO FHA 203K LOANS ACCEPTED.

Buyer Eligibility
Buyer meets HUD maximum income restrictions by household

size: (This is defined as the number of people residing in the home including, but not limited to, all minor

children, spouses, fiancés, roommates, relatives.)

1………………..$42,9505
………………..$66,3002……………….
$49,1006……………….
$71,2003………………
$55,2507………………
$76,1004……………
$61,3508……………
$81,000

Buyer needs to qualify for the first mortgage according to the financial institutions guidelines. Purchase price limit currently $187,000. Buyer must be under 80% of median income (as shown above).

The City of Aurora projects out income for a 12 month period based on both pay stubs and VOE’s. We will project the income based on future raises if stated on the Verification of Employment. Please feel free to call us to go over specific situations.

Borrowers are allowed to have limited reserves ($10,000). Buyer may not have owned a home within the past (3) years, as evidenced by providing copies of at least

three (3) years tax return transcripts.
BORROWER REQUIREMENTS

The borrower is required to attend a one on one counseling session with housing

counselor. The borrower needs to attend a MANDATORY free seminar held once a month
A counseling certificate is issued by the City of Aurora when the borrower has completed the seminar.

A certificate is required in order for the borrower to receive funds from the City of Aurora.

HOAP reserves the right to refuse any loan based on any reason management deems appro priate. Written notice of loan denial will be provided.

Property Eligibility/Seller Requirements.
Property must be located within the City of Aurora. Property must be a Single Family Residence, Condominium or Townhome.

A full written inspection report is required on all properties.

We will review this inspection for all health and safety items. Proof of repairs is required (receipts, etc.)

prior to closing.

In other words,  we are unable to accept inspection conditions at the closing table. Market value/purchase price is set through the financial institution’s appraisal.

A lead hazard screen is required on all pre-1978 properties. Because of HUD Regulations, (Handbook 1378, Tenant Assistance, Relocation and

Real Property Acquisition Chapters 2) and 3), the City of Aurora Home Ownership Assistance Program cannot assist if the property is renter occupied. In other words,

THE PROPERTY NEEDS TO BE OWNER OCCUPIED AT THE TIME THE CONTRACT IS WRITTEN, OR IF VACANT, SELLER MUST PROVIDE EVIDENCE THAT THE TEN

ANT WAS NOT DISPLACED.

3. The Voluntary Acquisition Letter must be signed and dated by all sellers at least 24 hours prior to closing.

In other words, we are unable to accept the Acquisition letter at the closing table.

In accordance with HUD Regulations Handbook 1378, Chapter 5, Section 1, the City of

Aurora must inform the seller that the City of Aurora will not use its power of eminent domain to acquire the property if negotiations fail to result in an amicable agreement.

Prior to the closing of the sale, the City of Aurora will provide the seller with a

written estimate of the fair market value of the property.
Program Guidelines

The program offers Financial Assistance for the minimum required down payment, depending on the loan program (a maximum of

5% for conventional loans), and all allowable closing costs under HOAP guidelines up to

a maximum of $10,000. We do not pay for buy-downs or points. We will not reimburse nor advance appraisal or credit report fees.

Please note that if borrower is able to put more than the minimum required down beyond allowable reserves, HOAP is unable to assist.

Buyer participation in down payment/closing costs will be required based on the total loan package and buyers ability to pay

their contribution of 1% of the purchase price towards the transaction. HOAP will assist up to a maximum of 5% down payment.

The term of the second mortgage is thirty years, with simple interest of zero percent (0%).

No monthly payments are required. Principal is due and payable in full upon sale of the property, with cash out refinance,

transfer of ownership, failure on the part of the borrower to maintain home as principal place of residence, or payment in full of the first mortgage.

There is no prepayment penalty. We also do not accept monthly or partial payments. A document recording fee of $21 is charged, but there are no other discount points,origination fees or processing fees under this program.

In order to reserve funds, the borrower must have had a one on one counseling sessions as well as a fully executed contract.

Program subject to funding availability and conditions are subject to change without notice.

It is unlawful to discriminate in housing based on Race, Color, National Origin, Religion, Sex, Familial Status or Handicap.

 

Top Reasons Mortgages Had Problems with 2013

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SellAHomePeople are really unique and because of this every mortgage is unique.  Almost every loan will have an issue that requires further documentation and some will have many issues. Over the years I have compiled the “avoidable problem” list. I send this to everyone early in the process because if I know about these things early I can almost always work around them so that the closing happens smoothly. Do you see anything here that could impact your loan? If so, let me know.
Top 11 reasons loans had problems in 2013:
1.) Down payment funds coming from unknown sources such as cash, non-family gifts, loans.
2.) Name changes that have not been registered with the Social Security Administration.
3.) Tax returns given to me that did not match returns filed with the IRS.
4.) Tax returns given to me were not filed yet or unable to find all schedules including K-1 forms to show ownership in a company.
5.) Appraisal too low and does not justify the purchase price or loan amount required for refinance.
6.) Second mortgage closing simultaneously with the first had problems or was delayed.
7.) Job change resulted in loss of commission or bonus income averaged over 2 years.
8.) W-2 employer income was actually found to be contractor/temp income.
9.) Child support/Alimony income needs to be proven with cancelled checks and court orders.
10.) Late payments or job loss after loan app but before the closing.
11.) Problems with an HOA such as litigation or too many rentals.

DOCUMENTING INCOME FOR YOUR MORTGAGE IS ALL ABOUT THE DETAILS

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Are You Being Asked For Tax Returns?

Anyone who has recently applied for a mortgage knows the importance of documenting income. This is one of the most critical pieces of information that mortgage lenders require during the application process. But if you have not applied for a mortgage either recently or perhaps ever, you may not realize how specific some lenders are with their income documentation requirements.  

It’s More than Just Proof of a Paycheck

If you are in the process of applying or a mortgage, or if you think you will be applying for a mortgage in the near future, you should be aware that mortgage lenders will most likely require more than a few paystubs as your proof of income. More important to mortgage lenders than verification that you received a paycheck last month is proof that your earnings are stable and your income is likely to continue on a consistent basis well into the foreseeable future.

Items You Will Have to Provide  

Different mortgage lenders have different specific requirements, but most will ask you to submit at least a few recent paystubs and the most recent W-2 you received from your employer. But in addition to paystubs and your W-2, you will also be required to provide your federal tax returns for the last couple of years. In addition to getting  those returns from you, the lender will likely request copies directly from the IRS. This can be accomplished by asking you to complete and sign a form allowing the mortgage lender to obtain official IRS copies. If there is no significant proof on your tax returns that you have been working steadily in the same job or in the same professional field for at least two years, you may have a difficult time qualifying for a mortgage. It is much harder to obtain a mortgage nowadays than it was several years ago. Mortgage companies want to make sure you are working in a stable job before they are willing to take the risk of loaning you a significant amount of money. Therefore, you will have to prove a consistent work history.

Are you Self-Employed?

If you are self-employed, you will probably have to prove your income via your federal tax returns. In some situations, mortgage lenders will require that you submit a profit and loss statement that gives details of how much your business typically earns and loses each month. If you have not been self-employed in the same industry for at least two years, it may be difficult for you to qualify for an FHA, Freddie Mac or Fannie Mae mortgage. Self-employed individuals seeking a mortgage may be scrutinized by mortgage lenders even more carefully than people who are employed by an established business. One thing that will help self-employed people with mortgage qualification is a high credit score. Additionally, having significant cash on hand is beneficial. If you know someone who has been employed consistently for at least two years and is willing to co-sign on the loan, your mortgage application will also be considered more favorably by lenders.irs-1040-individual-tax-return-form-being-filled-out

Is Buying a Foreclosure a Good Idea?

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Is Buying a Foreclosure a Good Idea?

Initially, the thought of buying a foreclosure property seems great because most people equate the word “foreclosure” with “bargain price.” But a buying a foreclosure can be a complicated process and it often involves taking a certain amount of risk that is not normally required when purchasing a property that is not in foreclosure.

It is absolutely possible to purchase a foreclosure property for less than it would cost if it were for sale by an owner. When a house is in foreclosure, it means it is owned by a bank. Most banks do not want to hold on to foreclosure properties any longer than necessary. Therefore, they are often willing to sell a foreclosure house for less than market value just to get rid of it. But banks are not in the business of giving foreclosures away for free. You will still have to pay… just probably not as much.

But buying a foreclosure comes with certain potential complications. For example, the condition of a foreclosure property is often  unfavorable. This means a significant amount of money might be required to repair the house to make it livable. Also, there is often tough competition when it comes to buying a foreclosure property that is in a desirable location. This can lead to bidding wars.

 

Things to Keep in Mind When Buying a Foreclosure:

 

1. If you are inexperienced at buying foreclosure properties, then try to avoid the auction setting. When you bid on a foreclosure at an auction, you lose the ability to have the house inspected. Basically, you are buying a house based on where it is located and how it looks from the outside. You never know what type of damage is on the inside and how many thousands of dollars of repairs it needs. Foreclosure auctions are very risky.

 

2. Make sure you are really getting a good price on the property. Remember: just because a home is listed as a foreclosure does not mean it’s priced any lower than the house next door.

 

3. Investigate and arrange your Mortgage Rate Quotes options prior to looking at foreclosure properties. Many lenders will not extend loan offers on homes that are listed as foreclosures if they are labeled as “distressed.” The overall condition of foreclosure properties may play a role in whether or not a lender will approve a loan.

 

The real estate market in the United States is showing signs of true recovery, but there are still many foreclosures occurring in every state, every month. There are certainly excellent opportunities to purchase foreclosures at discount prices. But before you set your mind on purchasing a foreclosure, make sure you understand the complexities involved. Utilizing the help of a real estate agent who is experienced at buying foreclosure properties makes the process much easier. A real estate agent can also assist with bank negotiations. Additionally, a real estate agent may be more aware of available foreclosure properties before they officially hit the market. Buying a foreclosure is a risky proposition, but it is a transaction that can be potentially favorable for the buyer. If you’re willing to take the risk, you might very well come out ahead!

Colorado Home 2 car

Colorado Foreclosure Opportunities

Simple Tips to Fix or Improve Your Credit Score

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Is your credit score less than perfect? If so, you’re not alone. In fact, almost nobody has a perfect credit score. A perfect credit score is 850. But is this number even reachable? Is a score of 850 even necessary? Your credit score is important because the number greatly influences how much credit you can obtain and also the interest rates that you will be offered on all types of loans – including general financing, mortgages, and credit cards.

 

Following is a description of how credit scores are typically classified:

 

720-850: Excellent

680-719: Good

620-679: Average

580-619: Poor

579-500: Bad

Less than 500: Very Bad

 

If your credit score is anything lower than “Excellent,” there are many steps you can take to fix or improve it. But don’t delay. The sooner you start working to improve your credit score, the better. It takes time to get the number to rise, and the process might take a bit of time-consuming effort. But the hours you spend working on fixing your credit problems will be well spent. The sooner your credit score shifts to a higher category, the faster you will reap the benefits of a better score.

 

Get Copies of Your Credit Report

The absolute first step you must take is obtaining a copy of your credit report. Websites such as www.freecreditreport.com and www.annualcreditreport.com offer free credit reports to consumers who fill out a form and submit their answers to a few questions. After you receive your credit report, you should examine it very carefully. Are there any errors – even tiny ones? Errors on credit reports are not uncommon. If you find any, they must be corrected. All errors should be disputed with the three major credit reporting agencies: Experian, Equifax and TransUnion. Details on how to dispute errors on your credit report can be found on the Consumer Financial Protection Bureau’s website.

 

Make Sure You Make Payments  on Time Every Month – for at Least the Minimum Amount You Owe

If you make late payments to your credit card companies, to your mortgage company, or even to utility companies, your credit score will be negatively affected. Some people have been successful in curbing their habitual problem of paying bills late by setting up automatic payments. Almost all companies that lend money have systems in place to debit your bank account for the minimum amount you owe them each month. Making payments on time is critical to improving your credit score.

 

Don’t Carry Too Much Debt at Once
When you have significant outstanding balances on revolving credit accounts, your credit score will be affected negatively. Try lowering your debt level instead of moving it from one account to another in order to get a better interest rate. Additionally, opening new credit cards so your available credit to debt ratio appears higher is a bad idea. Credit reporting agencies often lower a person’s credit score when this tactic is suspected.

 

Other Simple Tips to Improve Your Credit Score:

 

  • Contact a credit counselor if you can’t figure out how to effectively manage your debt.
  • Don’t open too many credit accounts within a short period of time.
  • If you open a new revolving credit account, get it paid off as quickly as possible.
  • Always report credit card fraud immediately to your state attorney general’s office and the Federal Trade Commission.
  • Protect yourself from identity theft.
  • Don’t apply for new credit accounts unless you really need them.
  • Have more than one type of credit on your record (e.g. not all revolving accounts).

Mortgage: How Long do you need to Wait after Bankruptcy or Foreclosure

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WAITING PERIODS REQUIRED FOR SIGNIFICANT DEROGARTORY CREDIT EVENTS
CONVENTIONAL LOANS

DEROGATORY ITEM

CONVENTIONAL LOAN WAITING PERIODS

Foreclosure

Home was given back to the bank- No owner participation
7 years from the date foreclosure completed and transferred back to bank if they had NO extenuating circumstances
3 years from date foreclosure completed and transferred back to bank with acceptable extenuating circumstances1 AND 10% down payment. Primary home purchase and rate/term refinance only. Non-owner and second homes not allowed.

Short Sale

Deed in Lieu of Foreclosure

Short Sale: Home sold but sales price didn’t cover amount owed

Deed in Lieu: Home returned to lender in exchange for canceling loan
7 years from date sale closed and transferred to new owner or transferred back to bank for less that 10% down payment.
4 years from date sale closed and transferred to new owner or transferred back to bank with 10% down payment.
2 years from date sale closed and transferred to new owner or transferred back to bank with 20% down payment.
2 years from date sale closed and transferred to new owner or transferred back to bank possible with acceptable extenuating circumstance1 and 10% down payment.

Bankruptcy chapter 7

Debts are discharged through BK, client does not pay any de3bts owing
4 years from discharged date
2 years from discharge date possible with acceptable extenuating circumstance1

Bankruptcy Chapter 13

Debts are paid back on a monthly scheduled payment plan by client
2 years from discharged date
4 years from dismissal date

FHA (DETERMINED BY DATE OF CREDIT APPROVAL)

DEROGATORY ITEM

FHA LOAN WAITING PERIODS

Foreclosure

Deed in Lieu of Foreclosure

Foreclosure: Home was given back to the bank- No owner participation

Deed in Lieu: Home was returned to lender in exchange for canceling loan
3 years from date foreclosure completed and transferred back to bank
Less than 2 years, but not less than 12 months from date foreclosure completed and transferred back to bank may be acceptable if the result of acceptable extenuating circumstances2

Short Sale

Short Sale: Home sold but sales price didn’t cover amount owed
3 years from date sale closed and transferred to new owner
No waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND they are not taking advantage of declining market conditions

Bankruptcy Chapter 7

Debts are discharged through BK, client does not pay any debts owing
2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred.
Less than 2 years, but not less than 12 months from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances2 and borrower has since exhibited a documented ability to manage affairs in a responsible manner.

Bankruptcy Chapter 13

Debts are paid back on a monthly scheduled payment plan by client
1 year payout period under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory and all required payments made on time

VA (DETERMINED BY DATE OF CREDIT APPROVAL)

DEROGATORY

ITEM

VA LOAN WAITING PERIODS

Foreclosure

Deed in Lieu of Foreclosure

FORECLOSURE: HOME WAS GIVEN BACK TO THE BANK – NO OWNER PARTICIPATION

DEED IN LIEU: HOME RETURNED TO LENDER IN EXCHANGE FOR CANCELING LOAN
2 YEARS FROM DATE FORECLOSURE COMPLETED AND TRANSFERRED BACK TO BANK
12-23 MONTHS FROM DATE FORECLOSURE COMPLETED AND TRANSFERRED BACK TO BANK IF CREDIT RE-ESTABLISHED AND PAID AS AGREED AND WAS CAUSED BY ACCEPTABLE EXTENUATING CIRCUMSTANCES3

SHORT SALE

SHORT SALE: HOME SOLD BUT SALES PRICE DIDN’T COVER AMOUNT OWED
2 YEARS FROM DATE SALE CLOSED AND TRANSFERRED TO NEW OWNER
NO WAITING PERIOD IF BORROWER HAD NO LATE PAYMENTS ON ANY MORTGAGES AND CONSUMER DEBTS WITHIN THE 12 MONTH PERIOD PRECEDING THE SHORT SALE AND THEY ARE NOT TAKING ADVANTAGE OF DECLINING MARKET CONDITIONS

BANKRUPTCY CHAPTER 7

DEBTS ARE DISCHARGED THROUGH BK, CLIENT DOES NOT PAY ANY DEBTS OWING
2 YEARS FROM DATE OF DISCHARGE
12-23 MONTHS FROM DATE OF DISCHARGE IF CREDIT RE-ESTABLISHED AND PAID AS AGREED AND WAS CAUSED BY ACCEPTABLE EXTENUATING CIRCUMSTANCES3

BANKRUPTCY CHAPTER 13

DEBTS ARE PAID BACK ON A MONTHLY SCHEDULED PAYMENT PLAN BY CLIENT
1 YEAR PAYOUT PERIOD UNDER BANKRUPTCY HAS ELAPSED AND THE BORROWER’S PAYMENT PERFORMANCE HAS BEEN SATISFACTORY AND ALL REQUIRED PAYMENTS MADE ON TIME

USDA (DETERMINED BY DATE OF CREDIT APPROVAL)

DEROGATORY ITEM

USDA LOAN WAITING PERIODS

Foreclosure Deed in Lieu of Foreclosure

Short Sale

Home was given back to the bank – No owner participation

Deed in Lieu: Home returned to lender in exchange for canceling loan

Short Sale: Home sold but sales price didn’t cover amount owed
3 years from the late the foreclosure was completed and transferred back to the bank.
Less than 3 years from date the foreclosure was completed and transferred back to the bank may be considered with acceptable extenuating circumstances 4

Bankruptcy Chapter 7

Debts are discharged through BK, client does not pay and debts owing
3 years from date of discharge
Less than 3 years from date of discharge may be considered with acceptable extenuating circumstances4

Bankruptcy Chapter 13

Debts are paid back on a monthly scheduled payment plan by client
1 year from the date repayments was completed and bankruptcy discharged
Less than 1 year from the date of discharge may be considered with acceptable extenuating circumstances4

Examples of acceptable extenuating circumstances (circumstances must be verified and documented):
1.1. Conventional: nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.
2.2. FHA: serious illness or death of a wage earner. Divorce and the inability to sell a property due to a job transfer or relocation to another area does not qualify as an acceptable extenuating circumstance.
3.3. VA: unemployment, prolonged strikes, medical bills not covered by insurance, etc. Divorce is not viewed as beyond the control of the borrower and/or spouse.
4.4. USDA: loss of job; delay or reduction in government benefits or other loss of income; increased expenses due to illness, death, etc. circumstances surrounding the adverse information must have been temporary in nature, and beyond the applicant’s control, and have been removed so their reoccurrence is unlikely or the adverse action or delinquency was the result of a refusal to make full payment because of defective goods or services or as a result of some other justifiable dispute relating to the goods or services purchased or contracted for.

Hud is making changes to the MIP premiums

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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSINGFEDERAL
HOUSING COMMISSIONER
www.hud.gov espanol.hud.gov
January 31, 2013
To: All Approved Mortgagees
Mortgagee Letter 2013-04
Subject Revision of Federal Housing Administration (FHA) policies concerning
cancellation of the annual Mortgage Insurance Premium (MIP) and increase
to the annual MIP
Purpose Consistent with FHA’s ongoing efforts to strengthen the Mutual Mortgage
Insurance Fund, FHA is:
 revising the period for assessing the annual MIP;
 removing the exemption from the annual MIP for loans with terms of 15
years or less and Loan to Value (LTV) ratios of less than or equal to 78
percent at origination; and
 increasing the annual MIP on all forward mortgages except single family
forward streamline refinance transactions that refinance existing FHA
loans that were endorsed on or before May 31, 2009 (see ML 2012-4).
Effective Date The section of this ML that increases the annual MIP is effective for case
numbers assigned on or after April 1, 2013, except as noted below.
The following sections of this ML are effective for all mortgages with FHA
case numbers assigned on or after June 3, 2013:
 revision to the period for assessing the annual MIP;
 removal of the exemption from the annual MIP for loans with terms of 15
years or less and LTVs of less than or equal to 78 percent at origination;
 increase in the annual MIP for mortgages with terms less than or equal to
15 years and LTV ratios less than or equal to 78 percent at origination.
Continued on next page
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Mortgagee Letter 2013-04, Continued
Affected Topics This ML:
 rescinds the automatic cancellation of the annual MIP collection
announced in MLs 2000-38 and 2000-46;
 rescinds ML 2011-35, under which mortgages with terms of 15 years or
less and LTVs of less than or equal to 78 percent at time of origination
were exempt from the annual MIP; and
 rescinds and updates Sections 7.3.a, 7.3.c, 7.3.d, 7.3.e, 7.3.f, and 7.3.g of
HUD Handbook 4155.2 as appropriate.
This ML increases the annual MIP on all forward mortgages previously
announced in ML 2012-4, except single family forward streamline refinance
transactions that are refinancing existing FHA loans that were endorsed on or
before May 31, 2009; the rate for those streamline transactions remains at the
level announced in ML 2012-4.
Revision to the
Period for
Assessing
Annual MIP
For loans with FHA case numbers assigned on or after June 3, 2013, FHA
will collect the annual MIP for the maximum duration permitted under
statute. See 12 U.S.C. § 1709(c)(2)(B).
 For all mortgages regardless of their amortization terms, any mortgage
involving an original principal obligation (excluding financed Up-Front
MIP (UFMIP)) less than or equal to 90 percent LTV, the annual MIP will
be assessed until the end of the mortgage term or for the first 11 years of
the mortgage term, whichever occurs first.
 For any mortgage involving an original principal obligation (excluding
financed UFMIP) with an LTV greater than 90 percent, FHA will assess
the annual MIP until the end of the mortgage term or for the first 30 years
of the term, whichever occurs first.
Note: FHA calculates LTV as a percentage by dividing the loan amount
(prior to the financing of any UFMIP) by the lesser of the purchase price (if
applicable) or the appraised value of the home. For streamline refinances
without appraisals, FHA uses the original appraised value of the property to
calculate the LTV.
Continued on next page
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Mortgagee Letter 2013-04, Continued
Revision to the
Period for
Assessing
Annual MIP
(continued)
The table below shows the previous and the new duration of annual MIP by
amortization term and LTV ratio at origination.
Term LTV (%) Previous New
≤ 15 yrs ≤ 78 No annual MIP 11 years
≤ 15 yrs > 78 – 90.00 Cancelled at 78% LTV 11 years
≤ 15 yrs > 90.00 Cancelled at 78% LTV Loan term
> 15 yrs ≤ 78 5 years 11 years
> 15 yrs > 78 – 90.00 Cancelled at 78% LTV & 5 yrs 11 years
> 15 yrs > 90.00 Cancelled at 78% LTV & 5 yrs Loan term
Increase to
Annual
Mortgage
Insurance
Premium
Under Public Law 111-229(1)(b), FHA may adjust its mortgage insurance
premium rates, as measured in basis points (bps), by Mortgagee Letter.
The first table shows the previous and the new annual MIP rates by
amortization term, base loan amount and LTV ratio. All MIPs in this table
are effective for case numbers assigned on or after April 1, 2013.
Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 120 bps 130 bps
≤ $625,500 > 95.00% 125 bps 135 bps
> $625,500 ≤ 95.00% 145 bps 150 bps
> $625,500 > 95.00% 150 bps 155 bps
Term ≤ 15 Years
≤ $625,500 78.01% – 90.00% 35 bps 45 bps
≤ $625,500 > 90.00% 60 bps 70 bps
> $625,500 78.01% – 90.00% 60 bps 70 bps
> $625,500 > 90.00% 85 bps 95 bps
The second table shows the previous and the new effective annual MIP rates
for loans with an LTV of less than or equal to 78 percent and with terms of up
to 15 years. The new annual MIP for these loans is effective for case
numbers assigned on or after June 3, 2013.
Term ≤ 15 Years
Base Loan Amt. LTV Previous MIP New MIP
Any Amount ≤ 78.00 % 0 bps 45 bps
Continued on next page
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Mortgagee Letter 2013-04, Continued
Exceptions to
MIP Duration
Changes
The changes to the duration of the annual MIP as specified in this ML are
effective for all Single Family FHA programs for which FHA charges an
annual MIP except:
 Title I
 Home Equity Conversion Mortgages (HECM)
Exceptions to
Announced
MIP Increases.
The increases in the annual MIP specified in this ML apply to all
mortgages insured under FHA’s Single Family Mortgage Insurance
Programs except:
 Streamline refinance transactions of existing FHA loans that were
endorsed on or before May 31, 2009 (see ML 2012-04)
 Title I
 Home Equity Conversion Mortgages (HECM)
 Section 247 (Hawaiian Homelands)
 Section 248 (Indian Reservations)
Information
Collection
Requirements
The information collection requirements contained in this document have
been approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned an
OMB control number of 2502-0583. In accordance with the Paperwork
Reduction Act, HUD may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless the collection
displays a currently valid OMB Control Number.
Questions Please address any questions about the topics addressed in this Mortgagee
letter to the FHA Resource Center at 1-800-CALLFHA. Persons with
hearing or speech impairments may reach this number via TTY by calling
the Federal Information Relay Service at 1-800-877-8339. For additional
information on this Mortgagee Letter, please visit www.hud.gov/answers.
Signature
___________________________________________________
Carol J. Galante
Assistant Secretary for Housing – Federal Housing Commissioner

HUD is extending Loss Mitigation options

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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSINGFEDERAL
HOUSING COMMISSIONER
www.hud.gov espanol.hud.gov
January 31, 2013
MORTGAGEE LETTER 2013-03
To All FHA-Approved Mortgagees, Single Family Servicing Managers
Subject Extension of Implementation Date for Mortgagee Letter 2012-22,
Revisions to FHA’s Loss Mitigation Home Retention Options
Purpose The purpose of this Mortgagee Letter is to: (1) notify mortgagees that the
implementation date for Mortgagee Letter 2012-22 has been extended to
March 15, 2013; and (2) clarify questions HUD received from the industry
regarding the proper implementation of Mortgagee Letter 2012-22.
Frequently
Asked
Questions
(FAQs) on
ML 2012-22
Attachment 1, Mortgagee Letter (ML) 2012-22 Revisions to FHA’s Loss
Mitigation Home Retention Options Frequently Asked Questions (FAQs), is
incorporated as an amendment to Mortgagee Letter 2012-22.
Information
Collection
Requirements
Paperwork reduction information collection requirements contained in this
document have been approved by the Office of Management and Budget
(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C.§ 3501-3520)
and assigned OMB Control Number 2502-0589. In accordance with the
Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is
not required to respond to, a collection of information unless the collection
displays a currently valid OMB Control Number.
Questions Any questions regarding this Mortgagee Letter may be directed to the HUD’s
National Servicing Center at (877) 622-8525. Persons with hearing or speech
impairments may reach this number by calling the Federal Information Relay
Service at (800) 877-8339. For additional information on this Mortgagee
Letter, please visit www.hud.gov/answers.
Signature Carol J. Galante
Assistant Secretary for Housing-Federal Housing Commissioner
Mortgagee Letter (ML) 2012-22
Revisions to FHA’s Loss Mitigation Home Retention Options
Frequently Asked Questions (FAQs)
1. If a mortgagee has not reassessed a mortgagor for the new loss mitigation waterfall (i.e., delineated in ML 12-22) as of December 16, 2012, will interest be curtailed?
No. Mortgagees may claim debenture interest for loans suspended during the period December 16, 2012 through March 15, 2013, provided the suspension was necessary to fully implement ML 2012-22.
2. If a property is non-owner occupied, vacant, or an investment property, does the mortgagee have to cancel a foreclosure sale date and reassess a mortgagor for loss mitigation retention options, pursuant to ML 2012-22?
No. The mortgagee does not have to cancel a foreclosure sale date in this circumstance because loss mitigation retention options are only available to owner occupants.
3. If a mortgagor initially failed to respond to the mortgagee’s outreach attempts and a foreclosure sale is scheduled for a date after December 15, 2012, does the mortgagee have to reassess the mortgagor for loss mitigation options under ML 2012-22?
Yes. FHA expects mortgagees to re-solicit mortgagors who were previously unresponsive to the mortgagee’s outreach attempts prior to the issuance of ML 2012-22 unless the foreclosure sale occurred prior to December 16, 2012. Foreclosure sales scheduled on or after December 16, 2012, do not have to be canceled to reassess a mortgagor. However, these foreclosure sales cannot occur prior to the mortgagee making the determination and documenting that its solicitation attempts have been unsuccessful.
4. ML 2012-22 permits mortgagors to receive a loan modification or FHA-HAMP once within a 24 month period. When does the 24 month period begin?
The 24 month period, referenced in ML2012-22, starts on the latter of the ML’s issuance date (November 16, 2012) or the last date of a mortgagor’s executed loan modification or
FHA-HAMP. For example, if a mortgagor received an FHA-HAMP modification on March 18, 2012 and is currently in default, the mortgagee would have to reassess the mortgagor under the new waterfall prior to proceeding with a foreclosure sale that is scheduled after December 15, 2012.
5. Prior to February 16, 2013, which waterfall is the mortgagee expected to use?
The mortgagee shall use the previous waterfall (described under ML 2009-23, 2002-17, 2000-05) until it implements the new waterfall outlined under ML2012-22. However, if a mortgagor fails to cure the default under the previous waterfall, then the mortgagor
must be considered under the new waterfall before the mortgagee may complete a foreclosure sale.
6. In order to comply with ML 2012-22 does a mortgagee have to cancel all foreclosure sales after December 15, 2012?
No. The mortgagee does not have to cancel the foreclosure sale date unless the mortgagor was properly reassessed under the new waterfall and deemed eligible for a loss mitigation home retention option under ML 2012-22. However, the mortgagor must be reassessed under the new waterfall prior to the mortgagee proceeding with a foreclosure.

Pending home sales were up 9.8 percent in the 12 months through November, the National Association of Realtors said.

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Pending home sales up in Novemeber 2012, Denver Mortgage Company

WASHINGTON — Contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, an industry group said on Friday, further evidence of a strengthening housing market recovery.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, increased 1.7 percent to 106.4 – the highest level since April 2010 when the home-buyer tax credit expired.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 1.0 percent after a revised 5.0 percent increase in October. It was the third straight month of gains.

“Home sales are recovering now based solely on fundamental demand and favorable affordability conditions,” said NAR chief economist Lawrence Yun.

Pending home sales were up 9.8 percent in the 12 months through November.

The housing market has turned the corner after a dramatic collapse, which dragged the economy through its worst recession since the Great Depression of the 1930s.

Home sales and prices are rising, encouraging builders to undertake new construction projects.

Home resale contracts were up in three of the country’s four regions. They were unchanged in the South.