Juan Cepeda

For all 2nd home and investment property transactions (purchase, r/t, or cash-out), the borrower is required to have:

2 months PITI reserves for a second home purchase

6 months PITI reserves for a non-owner purchase

PLUS

2 months PITI for each additional financed property that is a 2nd home or non-owner.

For example, a borrower who currently has one owner-occupied and two non-owner properties, and is looking to purchase another non-occ would need:

6 months PITI for the new subject non-owner

2 months PITI for each of the current two non-owners

And yes, these are cumulative reserve requirements in that each has to be added up separately. This guideline supersedes any DU findings.

The Mortgage rates rallied today as Mortgage Backed Securities (MBS) saw a strong demand and reprices for the better were seen. I would have to say rates will open better than today, but it is a volatile time and can see a reversal fairly quickly. The rates were seen at about 4.5 with a little over a point and 4.875 seen with 0 points.

We are close to all time high so there is hope, but no promises. Contact me to keep up daily

Starting May 1,2009 the mortgage landscape will change. This is for loans sold to Fannie Mae and Freddie Mac not FHA. The new Home Valuation Code of Conduct (HVCC) will be enforced. Effective May 1, appraisals must be ordered by "the lender or any third party specifically authorized by the lender including but not limited to appraisal companies, Appraisal Management Companies AMC and correspondent lenders." In general, state-licensed appraisers will work for these independent appraisal companies or correspondent lenders, which in turn will manage all aspects of the appraisal process. That is, order the appraisals, co-ordinate the appraisal inspections of the homes, collect for the appraisals, deliver the appraisals to the lender and pay the appraisers.

For this work, the AMC will extract a fee, which will ultimately have to be passed on to the consumer. The HVCC explicitly prohibits mortgage brokers and real estate agents from ordering appraisals. Lending institutions which include banks and mortgage bankers will be able to create their own independent appraisal companies or AMCs and put someone other than a loan originator or anyone paid on a commission basis in charge of communicating and ordering the appraisals.

This new rule will put both the consumer and loan officers against the wall. This is will cause a delay and with no real way to know a range of value before the appraiser going out there. Over regulation has taken hold and will hurt consumer in the long run.

Quick warning on Mortgage Rates this week:

This week is packed with relevant economic news in addition to another FOMC meeting. All seven of the reports are considered to be at least moderately important while several are considered very important to the markets and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

If you were making a decision on a loan in respects to locking a loan I would LOCK

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

If you can not find your condo on FHA website to see if it is approved then these are the conditions to get a spot approval or contact me to help you out Juan Cepeda on the web

CHECKLIST
FHA SPOT APPROVAL
ON A CONDOMINIUM PROJECT

This is the required documentation to review a condominium project for FHA “spot” approval. Packages will not be reviewed until ALL documentation is received:

□ Copy of legal description (must be owned fee simple and provide for an undivided ownership of common areas by unit owners)
□ Copy of all CCRs – (cannot contain any rights of first refusal or restrictive covenants)
□ Homeowner’s Association letter – must state
- How long the Homeowner’s Association has controlled the common areas (minimum for approval is one year)
- If there any special assessments pending
(none allowed)
- Year completed (both project and Master Association) and if project is subject to any additional phasing or annexation
(must be complete & not subject to additional phasing)
- Any pending legal action against the association, or it’s officers or directors
(none allowed)
- Number of units in the building and number of units sold
(90% must be sold)
- Number of units owner occupied
(51% minimum)

□ Print out from title company showing owner’s name, address (both physical and mailing) (to verify both 51% owner occupancy and to verify no single entity owns more than 10% of the total units in the project AND
□ Copies of 1st page ONLY of all deeds of trust in the project (to verify no more than 10% of the total units are encumbered by FHA insured mortgages in projects over 30 units; to verify no more than 20% of the total units are encumbered by FHA insured mortgages in projects of 30 units or less)
□ Copy of master insurance policy (project must have appropriate hazard, liability, and flood insurance (if applicable)
□ Copy of annual reserve study (there must be a reserve plan and a reserve fund, separate from the operating account, that is adequate to prevent deferred maintenance)