The Fannie Mae HomePath program is specifically for borrowers purchasing REOs directly from Fannie Mae.  It Includes a number of features which make it the strongest mortgage product available today.  Additionally, it is a fantastic marketing tool that you can use with those borrowers looking to purchase REO property (there are 420 Fannie owned properties currently in the city of Atlanta).   By narrowing your property search to those properties on the HomePath site, your buyer will be able to enjoy the following features of the HomePath (Home Path) loan:

• 3% Down payment and NO MORTGAGE INSURANCE
• No upfront MIP as required by FHA loans
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• NO APPRAISAL.  No appraisal fees and no need to deal with the appraisal issues that we are all fighting today.  This part is huge in the current market.
• 6% Seller contributions (we are limited to 3% above 80% LTV on a standard conventional product)
• 2nd Homes and Investors allowed.  Still no MI but a 10% down payment is required.
• Remember:  For investors, we are going back to a 10 property limit from the current 4.  So when you combine that change with this product, there is a huge opportunity.

Search for properties here:  a>

Released this past week on 3/4, here are some of the key takeaways from the new mortgage legislation released by the treasury department:

There are two programs.   Refi plus is only for the current servicer. DU Refi plus is for anyone including brokers. DU refi plus I believe is a superior product because there is the chance of an appraisal waiver. Unclear how often that will hit until we start running these through, but it’s a clear selling point to use over the next 30 days.

If you have secondary financing, you cannot roll it in under any circumstance. Period. End of discussion. Purchase money 2nd? Can’t do it. The only option is to resubordinate, but given the current marketplace, that seems highly unlikely.

The refinance works for primary, 2nd home, and investment properties.  There are slightly reduced LLPA’s for credit scores. Some very weird stuff going on in parts of that matrix. You actually are better off at 105% than you are at 70.1% in many cases which is very odd.  The condo LLPA is still there and there is a hefty investment property LLPA.

Mortgage Insurance (MI) is now clear for 2 cases. If they don’t currently have MI (either because they never had it or they got rid of it at some point) no MI is required all the way to 105%.   Here’s what is not clear. If they do currently have MI, then it says that they will need a new policy with the same coverage as their old. The question is, how likely are the MI companies going to be to agree to this? And are we going to be held to their new underwriting guidelines - basically 41% DTI?

Key selling features of DU Refi Plus over Refi Plus.

• Condos - no project review required on DU RP.
• Appraisals - waiver is a possibility on DU RP.
• Slightly reduced income documentation on DU RP.

Major limitations of DU Refi Plus

• DTI limited (we are assuming at the standard 55%). Regular Refi Plus is not DTI Limited.

Suggestions for selling it:
- The government is guiding borrowers to their current servicer, but here are some reasons why you should probably go with the DU Refi Plus. 1) Appraisal Waivers 2) Reduced Income Docs 3) Easier Condo approval
- Borrower will still have to qualify on this “enhanced” program using the current DTI. If during the app it becomes obvious that they are above 55%, steer them to their current servicer to pursue the standard refi plus.

Here is a quick overview:

This update from Mortgagee Letter 2009-08 establishes temporary cash-out refinance guidelines.

1. This is a temporary change, and effective as of April 1st, 2009

2. When adding a simultaneous 2nd lien, there will be a max CLTV of 85%

3. Existing 2nd liens can be re-subordinated with no max CLTV

4. When existing 2nd liens are modified to accommodate the new 1st, there is no max CLTV

5. Must have 12 months seasoning as primary residence to get max cash-out of 85%

6. Less than 12 months seasoning as primary residence, loan amount will be capped at 85% of the appraised value or sales price, whichever is lower

7. Existing loan must be current and not delinquent or in arrears

8. A second appraisal is required for all cash-out refinances above $417,000

9. Non-owner occupants cannot be added to qualify for cash-out refinances

If you are considering a cash out refinance, you have 2 weeks to get your loan application in so that we can assign a case number to your file prior to April 1st.