BluefoxToday blog : George Souto NMLS# 65149 FHA, CHFA, VA Mortgages Connecticut

By the end of this year, all Mortgage Loan Officers and Mortgage Brokers, that work for a Non-Depository Lender, will need to be licensed in every State in order to take a Loan Application and put a Loan in process, so make sure your Mortgage Loan Officer is licensed.   For right now Mortgage Loan Officers for Depository Lenders like Banks, and Credit Unions, are excluded from being required to be licensed, presently all they need to do is be registered under their Lending Institutions License.

Up to now licensing for Mortgage Loan Officers was optional for each State, but under the  Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which is part of the FHA reform bill, put into place National Standards for Mortgage Loan Officers.  With this change all Mortgage Loan Officers that work for a Non-Depository Lender in all States will be part of a mandatory registration system called the Nationwide Mortgage Licensing System (NMLS).

In my opinion this is a MAJOR positive move on the part of Lending Industry, and hopefully Mortgage Loan Officers that work for Depository Lenders will also be required to be licensed in the near future.  Right now the Banking Lobbyist have been able to prevent this from happening, but the pressure for their Loan Officers to also be licensed will increase, and they will also have to comply.

This is bound to reduce the number of Mortgage Loan Officers presently doing business in every State.  Those that will most likely be impacted most by this new law are Internet Lenders, because Mortgage Loan Officers have to be licensed in EVERY State that they do business in, and cannot use the license of someone else to write Loans.  This is because an individual cannot even take information to complete a Loan Application without being licensed in that State.

Cost will also be a major factor in all this.  In Connecticut the cost to license a Mortgage Loan Officer is $330.  This amount may vary from State to State, but it does not take long for those licensing fees to add up.  Furthermore, the Mortgage Loan Office will need to past that States Licensing Test on top of passing a National Licensing Test in order to be licensed.  If the State Test for other States is anything like the Connecticut State Test, it will not be easy to pass.  Many have taken the Connecticut State Test this year and failed.

The way that you will know that your Mortgage Loan Officer is licensed is by an NMLS Number, mine is NMLS# 65149.  This number must appear on everything that identifies someone as a Loan Officer like business cards, flyers, e-mail, websites, etc.  If your Mortgage Loan Officer does not have an NMLS# then he or she is not licensed, and you should be looking for someone else to partner with in case they do not obtain their license by the end of the year.  In fact in Connecticut Mortgage Loan Officers will need to have taken and past the National and State Tests by October 31.

Once a Mortgage Loan Officer has past their National and State Tests, they will need to take 8 hours of continuing education classes each year in order to maintain their license.  20 hours of educational classes are originally needed to obtain the Mortgage Loan Officer License.

So make sure your Mortgage Loan Officer is licensed, or fine one who is!!!

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308, gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

Lenn Harley wrote a blog on Sunday in which she rightfully questioned the accuracy of what was being stated on another blog about Pre-Approval Letter. The writer of the blog that Lenn was questioning, stated that her Loan Officer had informed her that he would no longer be able to provide her with a Pre-Approval Letter for her Buyers because of restrictions imposed by RESPA. This information was incorrect, Pre-Approval Letters are very much alive and well. But before I go any further let me give three very quick definitions of what I consider a Pre-Qualification Letter, Pre-Approval Letter, and a Loan Commitment Letter. Keep in mind that these are MY definitions, and MY opinion. 

• Pre-Qualification Letter: Loan Officer pulls credit, and inquires about income and maybe bank information. From that the Loan Officer makes a quick determination as to whether the Borrower could possibly qualify for a Loan up to a certain dollar amount.
  
• Pre-Approval Letter: Loan Officer pulls credit, inquires about income and bank information, takes a full Loan Application, may or may not collect some documentation like paystubs. Runs all this information through DU or LP along with a hypothetical Sales Price, and looks for an Approved/Eligible or Accept.
  
• Loan Commitment Letter: The Loan Officer does everything that he or she would do if there was a property, pulls credit, collects all necessary documents, Borrower signs a Loan Application along with disclosures, and everything is submitted into Underwriting. Everything that would be done for an actual Loan would be done except for an Appraisal, because there isn't a property yet. The Underwriter then issues a Loan Commitment Letter up to a certain dollar amount, based on a property being able to appraise later once a property is found.

Again these are MY definitions, other Loan Officers will have their own, including equating a Pre-Qualification Letter to a Pre-Approval Letter, because that is what they do for their Pre-Qualification Letters. You need to find out what your Loan Officer means when he or she uses those terms.

Having said all that, why would a Loan Officer make a statement like the one made in the blog mentioned above? The reason is that if a Loan Officer takes six pieces of information from a Borrower, RSPA requires him to then issue a Good Faith Estimate (GFE), because those six things constitute an Application in the eyes of RSPA, and they HAVE TO issue a GFE within 3 business days or be in violation. The six things are:

• Borrowers Name
• Social Security Number
  
• Income
  
• Property Address
  
• Estimate of Value of Property
  
• Loan Amount

So why would issuing a GFE present a problem? The problem is that with the new GFE that went into affect at the beginning of the year (which has its own problems, but that is another blog) the Lender is locked in to some of the figures (Lender Fees) for 10 days, and for some of the Fees they only have a 10% flexibility. Lenders are hesitant about being put in that position, especially since there is no property yet, and the Borrowers Credit Scores could change by the time a property is found, which might require Points to be charged.

If a Lender does not want to issue a Pre-Approval Letter, because they don't want to run the risk of having to issue a GFE and be locked into those fees, then they should be upfront and just say so, and not create a Myth that RESPA does not allow them to do so.

The other reason why a Loan Officer might say something like that is because they want to play with the Fees. Use a low figure to get a Borrower to go with him or her, and then tack on higher Fees and Points once the Borrower is ready to put a loan into process. Most of those games have gone away, but they do still exist.

If your Loan Officer will not give you a Pre-Approval or Pre-Qualification Letter for a Borrower, or if you are one of those who feel that a Pre-Approval Letter or Pre-Qualification Letter is worthless, then you need to find another Loan Officer, who will produce one that you can trust.

Most of my business comes from referrals from Realtors, so I am very careful about what I issue. When I issue a Pre-Approval Letter it is worth FAR MORE than the paper it is written on, and the only way that Borrower will not be approved for a loan, is because something that could not be foreseen at the time of application, later pops up.

Get your Buyers Pre-Approved by a trusted Loan Officer as early in the process as possible, and DO NOT accept the Myth that you cannot be given one!!!

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

This past Saturday I posted a blog DEED-IN-LIEU FORECLOSURE and Short Sale UPDATES Fannie Mae about upcoming changes that Fannie Mae will be making to their Deed-In-Lieu of Foreclosure and Short Sale Guidelines.  A few of the people that made comments on that blog requested that I also post a blog with a chart to show what the Fannie Mae Guidelines are for Foreclosures and Bankruptcies.  Below is a chart with that information.  It is longer than the previous chart for Deed-In-Lieu of Foreclosure and Short Sales, but I think that it still provides a quick overview of the Fannie Mae Guidelines for Foreclosures and Bankruptcies.

Fannie Mae has not announced any planned changes to their Foreclosure and Bankruptcy Guidelines, but with all the changes that have been happening in our Industry, there is no guarantee that they will not do so in the future.  If they do I will try to provide that information as well.

I hope the information below is as useful to those who have a need for this information as it has been for me.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Fannie Mae has announced a new updated.  This time they are revising the waiting period for Deed-in-Lieu of foreclosure and Short Sale on conventional conforming loans effective with applications dated on or after July 1, 2010. Fannie Mae's Automated Underwriting System (DU) will be updated to version 8.1 and implemented during the weekend of June 19, 2010 to include these changes. No changes will be made to bankruptcies or strict foreclosure, so the present guidelines will continue to apply.

Below is a breakdown and time periods for the new changes.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

My Post yesterday focused on the the three categories of costs that may or may not change once the New Good Faith Estimate 2010 Form is issued. These three categories are costs that Cannot Change, cost that Can Change by 10%, and costs that can Change at Settlement.

The first category of Costs that Cannot Change on the New Good Faith Estimate 2010 Form is pretty self explanatory, but the other two categories can change so in this Post I want to go into what constitutes a reason for change, and some examples of what they might be.

HUD’s Definition For Changed Circumstances

• Acts of God, war, disaster or other emergency
  
• When information particular to the borrower or transaction is found to be different or inaccurate
  
• When new information particular to the borrower or the transaction is provided
  
• Borrower requested changes
  
• Or when other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problem

Some Common Examples Of A Changed Circumstance:

• Adding or removing mortgage insurance
  
• Adding or removing borrowers
  
• Property under appraises
  
• Credit score changes
  
• Addition of service like an additional inspection, additional appraisal or certification
• Property uses changes - owner occupied to investment
  
• Wrong property address
  
• Property type change - SF, condo, 2-4 Family
  
• Loan amount or down payment amount change
  
• Transaction purchase changes – purchase to refinance
  
• Changing the rate or points
  
• Rate extension
  
• Loan program change
  
• Documents signed by a Power of Attorney
  
• Borrower changing from standard to extended coverage owner’s title policy
  
• Borrower does not proceed to closing quickly

If a Change of Circumstance which require a change in the costs on the original New Good Faith Estimate 2010 Form, these changes MUST be redisclosed on a new Good Faith Estimate within 3 business days of LEARNING THE NEW INFO or BORROWER REQUESTED CHANGE

 Links to the other blogs in this series:

New Good Faith Estimate

New Good Faith Estimate #2

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

The new Good Faith Estimate 2010 Form is now officially in effect.  This new form became affective on January 1, 2010, and will in many ways change the way Lenders have been doing things.  The new Good Faith Estimate 2010 Form will have both a positive and negative impact on both the Borrower and the Lender.

The positive is that the new Good Faith Estimate 2010 Form will now require ALL Lenders to use the same format.  In the past it was some times difficult for a Borrower to compare loan costs between Lenders, because the costs were disclosed and broken down differently from one Lender to another.  Now everyone will have to do it the same way and use the same form.  The new Good Faith Estimate 2010 Form also will prevent Lenders from changing certain costs that are originally listed on the new Good Faith Estimate 2010 Form, I will list these later.  The new Good Faith Estimate 2010 Form will also have an impact on the HUD-1, because now what was listed on the new Good Faith Estimate 2010 Form will have to be compared to that actual cost on the last page of the HUD-1.  These are all positive changes that the new Good Faith Estimate 2010 Form will have in my opinion.

What isn't positive about the new Good Faith Estimate 2010 Form in my opinion is that it does not break costs down like the Good Faith Estimate Form that I have right now, instead groups costs together in several places.  The new Good Faith Estimate 2010 Form will also cause Lenders to possibly not give Borrowers a Good Faith Estimate at the time that they are Pre-Approving a Borrower, because it locks them into certain things that they can't change later.  It is good that Lenders can't  just change their things, but there are situations that it might be out of their control why a cost changed and now the Lender is locked into what was originally disclosed under a different set of circumstances.  For this reason Lenders may now choose to not issue a Good Faith Estimate until they are actually putting a loan into process.  This in my opinion will make it more difficult for Borrowers to compare costs between Lenders prior to submitting a loan.

I am going to stop this post at this point, and continue it in one or two more posts this week.  What I have found over a period of time here on ActiveRain, is that if you make a blog to long, fewer people read it.  This information is too important, and will have such a big impact on Borrowers as well as everyone else in this industry, that I feel I need to present it in such a way that others will take the time to read, and not be turned off by its lenght.

So I hope that those that are reading this blog now will take the time to return and read the continuing blogs on the new Good FFaith Estimate 2010 Form.  I promise that it will not be a waste of your time to do so.

Links to the other blogs in this series:

New Good Faith Estimate 2010 Form #2

New Good Faith Estimate 2010 Form #3

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

As promised below is an overview and comparison between the present Tax Credit and the New.  The information below was just given to us by Senator Dodd's Office.

Homebuyer Tax Credit Overview:

• First‐time homebuyers (those who have not owned a principal residence in the three years prior to the purchase date of their subsequent home) are eligible for a refundable tax credit of 10 percent of the purchase price of a principal residence up to $8,000 for homes bought between January 1 and December 1, 2009.
• If the home is sold within three years, the taxpayer must pay back the credit (called "recapture").
• Income limits for the current credit are $75,000 for single filers and $150,000 for joint filers, phasing out completely after $95,000 for individuals and $170,000 for couples. Income limits are based on Modified Adjusted Gross Income (MAGI).

Extended and Expanded Homebuyer Tax Credit:

• Extends the availability of the $8,000 first‐time homebuyer credit to taxpayers who have a principal residence under a binding contract before April 30, 2010, allowing 60 days to close.
• Creates a new $6,500 credit for move‐up buyers. Move up buyers are defined as people who haveLike the credit for first‐time buyers, lived in their current home for 5 or more consecutive years during the 8 year period ending on the date of purchase of the their subsequent principal residence. this credit is available to taxpayers who have principal residences under a binding contract before April 30, 2010, allowing 60 days to close. 
• Raises the income limits for both the first time and move‐up buyer to $125,000 for single filers, $225,000 for joint filers with a $20,000 phase‐out. The $20,000 phaseout means that no credit can be claimed by those with MAGI above $145,000 for single filers, $245,000 married joint filers.
• Both the first‐time and move‐up credit are available for principal residences with a purchase price up to $800,000. Purchase price is defined as the adjusted basis of the principle residence on the date such residence is purchased.
• Includes strong anti‐fraud provisions: 
  • Gives the Internal Revenue Service math error authority which they have requested when processing IRS form 5405. This would allow the IRS to correct certain errors during credit processing, and avoid the need for a post‐refund, labor intensive audit. 
  • Requires a copy of the settlement statement (HUD‐1) which would verify the date of purchase, the residence address, and the purchase price. 
  • Introduces an explicit age limitation, allowing no one under 18 to claim the credit
  • Excludes individuals who are claimed as dependents and married individuals who purchase the home from the family of their spouse from claiming the credit
• Eliminates the recapture requirement for military personnel and members of the Foreign Service and intelligence community who are forced to sell their homes within three years as a result of an official extended duty of service. In addition, these individuals have one additional year to qualify for the credit if they served for at least 90 days outside the U.S. in 2009 or 2010. 
• Purchases made in 2010 can be claimed on the 2009 tax return. 
• The score of $10.8 billion over 10 years is paid for by a seven year delay of the worldwide allocation of interest rule until 2017, not stimulus funds. 
• Effective after the date of enactment. 
• Homebuyers who were eligible for the first‐time homebuyer tax credit pre‐WHBAA will be able to continue to claim the credit. Homebuyers who qualify for the credit under the expanded terms will only be able to claim the credit if they close on their home purchase after the date of enactment of this bill (the binding contract can be signed before enactment).

Some of this, like any new Legislation, is going to take a few days to fully understand.  As further clarification is made available I will try to provide it.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Looks like the long awaited New Tax Credit Bill will be signed into law tomorrow.  The New Tax Credit Bill was passed by the Senate earlier today, and by the House a few minutes ago.  The President has already stated that he will sign the Bill tomorrow once it hits his desk.

The New Tax Credit Bill will look a little different than the current one, but until it is passed by both the Senate and the House, and signed by the President, it is always subject to change.  As it stands right now the New Tax Credit Bill is suppose to contain the following:

• First-time homebuyers will continue at $8,000
  
• Tax credit for “move up” purchasers will be up to $6,500
  
  • Must have used previous home as a principal residence for 5 of the 8 previous years.
• Income limits increased and are the same for first-time and “move up” purchasers: $125,000 for single filers/$225,000 for joint filers
  
• Limitation on eligible home prices has been increased to $800,000
  
• Time Frame: December 1, 2009 to April 30, 2010 plus 60 day extension if binding contract is in place by April 30, 2010.
• Anti-fraud measures have been added

The two big differences between the present Tax Credit and the New Tax Credit Bill in my opinion are: 

• The New Tax Credit will be expanded to include present homeowners that have owned their home for at least 5 years.  The New Tax Credit still only applies to Primary Properties, which means that Investment Properties or Vacation Homes do not qualify for the New Tax Credit.
• Instead of the cut-off date being the Closing Date, it will now be the Date that the Buyer goes under Contract, and then having to Close 60 Days from that date.  This makes a lot more sense to me then having the Closing Date be the cut-off.

The $6,500 Tax Credit for existing Homeowners will be effective upon the New Tax Credit Bill being signed by the President.

Let's see if what we are being told is actually with ends up being signed, and we should know that some time tomorrow.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Back on June 16 of this year I wrote a blog "FHA ........ Major Condo Approval Change!!!" which covered the New FHA Condo Approval Process that was to go into affect on October 1st of this year.  Well FHA has just made it known that the New Condo Approval Process will now not go into affect until November 2nd.  This means that we have an additional month now to be able to do "Spot Condo Approvals" instead of a "Full Condo Complex Approval" on Condo Complexes that are not presently on the FHA Condo Approval List.

A quick recap of what the major changes will be to the new process are:

• FHA will now allow lenders who are "Direct Endorsement Lender" to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.
• An Environmental Study will no longer be required in most cases.
• The Right of First Refusal will not longer be an issue.
• Spot Condo Approvals will be eliminated.

I will try to keep everyone informed on any further changes or delays to the New FHA Condo Approval Process as I am made aware of them.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com