Announcement Number: 2010

Effective immediately, the following maximum LTVs apply for all new condominium submissions:

If you have any questions, please contact your AE.

Effective immediately, REMN is pleased to announce that we will now permit conventional loans for investment properties and second homes.  The eligibility criteria is as follows:

(1) 70% maximum LTV.

(2) Single-family residences only, no condominiums or attached PUDs.

(3) No gifts permitted.

If you have any questions, please contact your AE.

Effective immediately, REMN’s existing prohibition on all property transfers in the last year as defined in Announcement 08-06 is hereby rescinded.  Our new property transfer guidelines for all product types are below:

Property transfers in less than 91 days

If less than 91 days elapsed from the date the seller acquired the property until the date the new sales contract was executed, then the loan is not eligible for approval by REMN.

Property transfers between 91 and 365 days

If between 91 and 365 days elapsed from the date the seller acquired the property until the date the new sales contract was executed, then the loan is eligible for approval by REMN under the following circumstances:

(1) If the increase in sales price is more than 100%, then a full second appraisal ordered through a REMN-approved AMC is required.

(2) if the increase in sales price is less than 100%, one of the following will be required at REMN’s discretion:  (a) a full second appraisal ordered through a REMN-approved AMC; (b) a internal or external 2055 ordered through a REMN-approved AMC; or (c) a desk review performed by our in-house appraiser.

(3) All additional appraisal expenses are the responsibility of the broker.

(4) Gifts are not permitted.

(5) The borrower cannot currently own any properties.

(6) All loans of this type must be reviewed by an underwriting manager.

If you have any questions, please contact your AE.

The following policy concerning “thin credit” is effective for new submissions beginning April 6, 2010.

A “thin credit” file exists when the primary occupying borrower (the individual with highest percentage of income in the transaction) has a credit score, however, they do not meet the following criteria:

• At least three open tradelines with a 12-month satisfactory history, including at least one open tradeline with a 24-month satisfactory history
• “Authorized User” tradelines do not count towards the tradeline requirement

An application with thin credit can be approved under the following circumstances:

AUS Approve/Eligible loans

• If the borrower can document a 12-month satisfactory housing history (mortgage or rent), no further documentation is required.  The 12 month housing history must be documented with canceled checks, bank statements, or money order receipts.  A VOR or landlord reference letter cannot be used to satisfy this condition.
• If the borrower cannot document a 12-month satisfactory housing history, then the documentation specified in FHA Mortgagee Letter 2008-11 must be obtained.  Specifically, at least three references must be provided from “Group II” (the Group II list is provided at the end of this announcement).

Manually-Underwritten loans

• The borrower must be able to provide a 12-month satisfactory documented housing history (mortgage or rent).  The 12-month housing history must be documented with cancelled checks, bank statements, or money order receipts.  A VOR or landlord reference letter cannot be used to satisfy this condition.  If the housing history cannot be provided, the application cannot be approved.
• The borrower must also provide the documentation specified in FHA Mortgagee Letter 2008-11.  Specifically, at least three references must be provided from “Group II” (the Group II list is provided at the end of this announcement).

Exceptions

Exceptions can be considered by management at an LTV of 80.00% or less.

Credit Scores

• Credit reports must be run using all three repositories (EXP, TU, EFX).
• All borrowers must have at least one credit score, unless an exception is granted.
• Exceptions can be considered for a co-borrower with no score in the event that they:  (1) are not the primary wage-earner, (2) are not solely providing the majority of the assets for the transaction, and (3) the primary borrower is an owner-occupant.

Group II alternate tradelines

Insurance coverage, i.e., medical, auto, life, renter’s insurance (not payroll deducted); payment to child care providers – made to a business providing such services; school tuition; retail stores – department, furniture, appliance stores, specialty stores; rent to own – i.e., furniture, appliances; payment of that part of medical bills not covered by insurance; Internet/cell phone services; a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in an increasing balance to the account; automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.

If you have any questions, please contact your AE.

Pursuant to Mortgagee Letter 2010-02, effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

If you have any questions, please contact your AE.

Effective April 6, 2010, REMN will no longer accept FHA non-credit-qualifying (NCQ) streamline refinances.  We will continue to accept credit-qualifying streamline refinances.

Approved NCQ streamline refis in REMN’s pipeline must be funded by Friday, April 30th.

If you have any questions, please contact your AE.

The HUD Appraisal Independence guidelines originally planned for implementation on January 1, 2010 are officially effective for all case numbers assigned on or after February 15, 2010.  The new guidelines prohibit mortgage brokers and commission-based employees from participating in the appraisal ordering process.

Case number assignment functionality will be available in the FHA Connection without requiring the appraiser information.  The case number assignment screen will no longer capture the assignment choice, license ID and assignment date.  Instead, lenders will be required to enter all appraisal data, including the appraiser ID in the Appraisal Logging Screen once the completed appraisal is received by the lender and prior to the loan closing.

Accordingly, Real Estate Mortgage Network (REMN) has provided an “Order Appraisal” tab on our website,www.remnwholesale.com.  It will include links where the broker will be able to order the appraisal from an approved appraisal management company (AMC) who will assign the appraisal to an anonymous appraiser.  There will also be an option to order the appraisal from an AMC directly affiliated with REMN.  The broker will receive notification of the acceptance of the appraisal order as well as copy of the completed appraisal.

If you have any questions, please contact your AE.