Tri-Valley Mortgage News

Jumbo FHA loans, San Ramon, CA, Danville, CA

Are you looking for a great deal on a loan that is above the $417,000 conforming loan limit? Do you have limited down payment funds? Or perhaps you'd rather retain the majority of your savings for reserves or home improvements.

The FHA High Balance (sometimes referred to as Jumbo FHA) loan may be a terrific solution for your home purchase. You can finance up to 96.5% of the homes purchase price! The loan amount can range from $417,001 to $729,250 in the Bay Area. (Click here to find the maximum loan amount for your area)

While rates have been fluctuating a bit lately, I have access to some fabulous pricing on these loans right now!

For example, today (4/22/10) a 30 year fixed Jumbo FHA loan is at 5.0%. Even better, this interest rate is for a no point loan - meaning I would not be charging an origination fee. On top of that, I will also credit you the cost of our processing fee (a $650 value!). Depending on your loan amount, that can be a total savings of up to $7900!*

One thing to be aware of with Jumbo FHA loans is that they do require mortgage insurance due to the fact that you are borrowing well over 80% of the home's value which is the limit to get a loan without any mortgage insurance.

However, if you are looking for a loan above the conforming limit of $417,000 and you have less than 20% for a down payment, the Jumbo FHA  loan is one program you should consider.

Of course it is always wise to compare your options. I can give you a side-by-side cost comparison between all your options so you can make an informed decision.

I have been in the home loan business for over 15 years and 13 of those years I spent as a mortgage underwriter which means I made the decisions as to whether your loan was approved or not. I can guide you through this process and ensure that if you qualify, your loan process will be smooth and timely.

*rates and credits subject to change daily; rate based on a 15 day lock period and representative FICO score of over 700; not a commitment to lend.

I hope I didn't make your head spin too much with the last post about FHA's latest twists and turns. But if you're into the "excitement" read on - there's more!

• Here's the "biggie" - the "E Ticket Ride" that has everyone throwing their hands in the air. Effective for cases assigned on or after February 1^st, HUD has waived its up-to-now dreaded 90 Day Flipping Rule in an effort to facilitate recovery of the housing market. The guidelines for this waiver can be read here. Of course, this is not a free pass - there are still stipulations that must be met for such a transaction to be eligible for FHA financing. For more in-depth commentary on this, we posted an earlier blog on this topic here.
• The next big drop comes in the form of an HVCC look-alike policy for FHA appraisals. Although HUD does not require the use of AMCs for the ordering of an FHA appraisal, it has set forth new guidelines to ensure appraiser independence. Mortgagee Letter 2009-28 originally had this change take effect January 1^st but the deadline was extended to February 15^th. From that point on any party that stands to earn commission compensation from the successful completion of an FHA transaction may not select the FHA roster appraiser. Therefore it will be up to a lender's staff to order the appraisal and we can expect in most, if not all cases, the lender's AMC utilized for conventional loans will be called upon to complete FHA cases as well.
• Finally another loop on the ride comes in the form of a hike in Up Front Mortgage Insurance Premiums for FHA loans. No one is truly shocked by this - we saw it coming when HUD announced their insurance reserve funds were dwindling below the comfort level. On all cases assigned after April 5^th, the new UFMIP will be raised by 50 basis points from 1.75% to 2.25%. As it has been pointed out by many in the industry, since this premium is usually financed on top of the base loan amount, the monthly difference is not too jarring but this hike as well as the looming expiration of the Federal home buyer tax credit are certainly great motivators for potential buyers on the fence! The corresponding Mortgagee Letter 2010-02 can be found here.

Well that's the ride for you! Hope you're not too disoriented. Although I love a good roller coaster, I could use a break from the twists and turns on the FHA ride. But I'm confident that at some point in the future, HUD will begin to benefit from these tweaks, lenders will become more comfortable with the changes and someday (hopefully in the not-too-distant future) the lending landscape will return to a less turbulent experience.

It's only February and HUD has given us quite a bit to digest regarding FHA financing already! Who needs Disneyland with FHA's own roller coaster of changes? Here's a quick roundup of recent changes as well as links to the corresponding Mortgagee Letters:

• On December 16^th of last year HUD released an important guideline regarding potential borrowers who've had a previous Short-Sale or Short-Payoff.  Mortgagee Letter 2009-52
• January 1^st: FHA Maximum loan limits went into effect for 2010 as outlined in  Mortgagee Letter 2009-50
• FHA reduced the shelf-life of property appraisals from 180 to 120 days on existing homes. It also reduced the validity of appraisals from one year on proposed/under construction properties to 120 days as well. (see Mortgagee Letter 2009-30). This went into effect on Jan. 1 as well.
• Another thrilling change regarding appraisals explained in Mortgagee Letter 2009-29 regarding appraisal portability between lenders. Basically it outlines the various hoops a lender must jump through should there already be an FHA appraisal on a subject property which may happen as a result of a deal that fell through or if the original buyer decides to switch FHA lenders. HUD's guidelines are to prevent appraisal shopping by lenders to inflate value or reduce required repairs.
• Mortgagee Letter 2010-03 puts DE (Direct Endorsement) FHA lenders on high alert that it will be reviewing defaults (90 days or more delinquent)and claim rates during the FHA loan's first 24 months and will reserve the right to revoke FHA underwriting and origination ability of lenders whose default claims exceed the thresholds set forth in the letter. 
• The last day for FHA condo "spot approval" case numbers was January 31^st. As of February 1^st, FHA's new condo approval processes (termed HRAP and DELRAP) went into effect. Although spot approvals came in handy, I believe that this process will actually streamline FHA condo financing. Two mortgagee letters (Mortgagee Letter 2009-46b and Mortgagee Letter 2009-46a) outline the new processes.

Whew! That's only the first month's announcements! You probably need to get off the ride now and regain equilibrium before we go any further. I'll outline the next wave tomorrow...buckle up!

Our office has recently had some problems getting FHA Case Numbers transferred to us in a timely manner.  This is usually not a problem, and most of the time goes very smoothly, but when it does not...it can be a pain for all parties involved:  Buyers, Realtors and Mortgage Professionals.  We just wanted to pass this along in the case that you are currently, or may in the future, have problems transferring case numbers.

Due to the increasing number of requests HUD is now sending out an automated response.

HUD'S PROCESS FOR CASE NUMBER TRANSFERS

Please call the lender that is assigned the case number and ask them to transfer the case number to your company.  They would transfer the case by using the "Case Transfer" function on the FHA Connection.

 If you do not know how to reach the lender or do not know who the lender is, please do a query on the case number if you have it or the address if you don't in the "Case Query" function to pull up the case number assigned to the other lender.  We say do the query on the address since the request since the case number assigned to them may be for a different borrower.  Also, when doing a query on the address, make sure you only enter the street name in the STREET NAME field.  Do not include any pre-directional, post-directional, or street type in that field since it is not asking for that information.  By entering those pieces of information, you will probably prevent the record from coming up.  Once it is pulled up, please click on the lender's name to get the phone number and address HUD has on file for them.

If they will not cooperate with transferring the case, please inform them if the case is not transferred within two business days, then you will need to report their company to HUD.

If the "Case Query" function lists your company as the originator, then they have processed the transfer and you would use that case number for the loan your company is processing.  If the borrower is different, at this point you would use the "Borrower/Address Change" function to update the borrower information and the "CAIVRS Authorization" function to order CAIVRS authorizations for your borrowers.

If the "Case Query" function does not list your company on the case after two business days OR you are unable to reach the lender at the phone number listed with HUD whether it is because they simply do not answer the phone, the phone has been disconnected, or they went out of business, then you can go through the Home Ownership Center (HOC) to request the transfer.

 To make the request that the HOC transfer the case, please fax the request to the HOC that covers the state the property is in.  The request must be on company letter head and must be signed by an officer in your company.  It must state what action you have taken to get the case transferred so far and the results, must include a written request from the borrower(s) stating they want their loan transferred to your company, and it must be signed by the borrower, but does not need to be on any letterhead.  If the borrowers is a different borrower, the written request from the borrower is would not be included, but it should be mentioned in the request that the borrower now purchasing the property is a different person then the one listed on the case.  Also include "CASE TRANSFER REQUEST" in the subject line on the cover sheet.  If case was assigned to a different borrower, then a letter from the borrower is not needed, but point out that fact in the fax.

The fax numbers set up to handle the case transfer request at each of the HOCs are:

    Atlanta           404-331-3361
    Denver           303-672-5210 and 303-672-5211
    Philadelphia    215-656-3434 and 215-656-3438
    Santa Ana       714-796-5521 and 714-796-5522

If you are uncertain as to which HOC covers a state, go to the following URL since it lists all the states each HOC covers.

     https://entp.hud.gov/clas/support.cfm

Finally, if the borrowers are different, you would use the "Borrower/Address Change" function to update the borrower information after the case has been transferred and use the "CAIVRS Authorization" function to request CAIVRS authorizations for your borrowers.  You will find links to both functions in the "Case Processing" menu, that you access by following these links after you sign on to the FHA Connection.