The Texas Legislature recently amended the requirements of Texas Section 50(a)(6) that are effective with transactions closed on and after January 1, 2018.

The changes include:

  • The permissible fees limitation was lowered from 3% to 2%
  • More fees are excluded from the fee calculation
  • Agricultural properties are now eligible (previously ineligible)
  • New and updated disclosures and documents
  • New Texas refinance product – can refinance equity to a non-equity loan as a rate/term. (previously once a Texas equity always a Texas equity)

 

Permissible Fee Limitation

The following fees are now excluded from the 2% cap:

  • Bona fide discount points (now expressly stated in the amendment),
  • Homeowners insurance,
  • Title insurance premium and endorsement fees,
  • Survey costs, and
  • Third party appraisal fees (payable to the appraiser)

The following fees are NOT excluded from the 2% cap:

  • Escrow fees,
  • Delivery fees,
  • Non-insurance charges,
  • Appraisal fees if affiliated with lender
  • AMC fees (breakdown of costs between appraiser and AMC will be required)

 

Agricultural Properties

Properties that currently have an agricultural use designation are now eligible.

NOTE:  The borrower cannot obtain an agricultural use designation after they have originated a Texas equity transaction (state of Texas restriction)

 

12-Day Notice

The current 12-Day Notice will be updated to incorporate the applicable changes regarding the fee limitation and agricultural properties.

 

Rate/Term Transactions

Texas equity transactions can be refinanced as a rate/term transaction subject to the following:

  • A minimum of one (1) year has passed since the home equity loan closed
  • The borrower cannot receive any cash at close
  • Maximum 80% CLTV still applies

 

A new Notice is required when borrowers are refinancing from a Texas cash-out to a rate/term transaction advising them the rate/term transaction does not have the same protections as an equity transaction in Texas (rate/term permits foreclosure without a court order and a rate/term has recourse for personal liability to the borrower).  An example of the Notice is attached for reference.

The Notice must be signed by the borrower(s) within 3 business days of application (exclude Sundays and legal holidays when determining 3-day requirement) and at least 12 calendar days before closing.

Additionally, the borrower(s) will be required to sign a new affidavit at loan closing acknowledging that they are aware they are refinancing from an equity loan to a non-equity (rate/term) loan.

 

Important Information Regarding Loans Currently in the Pipeline

Texas equity loans that do not close prior to December 31, 2017 are subject to the new requirements and the borrower must be provided the new 12-day Notice.  The updated 12-day Notice cannot be issued until January 1, 2018 or later so Texas equity loans that do not close as of December 31 cannot close until January 13th 2018 or later to satisfy the 12-day “cooling off” period.

The applicable REMN guidelines will be updated in the near future and posted on the REMN website at www.REMNWholesale.com.

 

If you have any questions, please contact your Account Executive.

 

The new HMDA data requirements under Dodd-Frank will be mandatory for loan applications taken on or after January 1, 2018.

The expanded demographic information collected and reported by lenders and individual brokers will be available to the public on the Consumer Financial Protection Bureau’s (CFPB) website.

The new Demographic Information Addendum provides expanded fields to allow the borrower to provide more detailed information regarding their ethnicity and race should they choose to do so and replaces “Section X Information for Government Monitoring Purposes” on page 4 of the 1003. A sample Addendum, with the additional fields highlighted, has been provided for reference.

Reporting requirements continue to be determined by the method of interview as detailed below.

Face-to-face Interview (including Electronic Media w/Video Component)

  • Borrower Provides Information
    • The borrower(s) may select as many categories and/or write in information as they choose, but they are not required to also select a sub-category.
    • Select “No” under “To Be Completed by Financial Institution” section

 

  • Borrower Does Not Wish to Provide Information
    • The borrower must be advised that, due to federal regulations, the broker must note the borrower’s ethnicity, race and sex based on visual observation
    • MLO must select the appropriate ethnicity, race and sex based on their visual observation from the main/aggregate categories; sub-categories are not completed by the broker.
    • Select “Yes” for all questions under “To Be Completed by Financial Institution”

Telephone Interview

Brokers are responsible to explain to the borrower the purpose of the collection of demographic information as detailed on the Addendum under “Demographic Information of Borrower” topic.

  • Borrower Provides Information
    • The information is based on the borrowers willingness to provide
    • Complete the information provided by the borrower as applicable.
    • Select “Telephone Interview.”

  • Borrower Does Not Wish to Provide Information
    • Select “I do not wish to provide this information.”
    • The broker does not complete any information not provided by the borrower during a telephone interview.
    • Select “Telephone Interview.”

 

Fax, Mail, Email, or Internet

When an application is received via fax, mail, email, or internet the broker does not complete any information except as follows:

  • If the borrower left the Addendum blank or certain sections blank select the “I do not wish to provide this information” check box as applicable
  • Select “Fax or Mail” or “Email or Internet” as applicable under “The Demographic Information was provided through” topic
  • The borrower can supply as much or as little information as they wish.

 

If you have any questions, please contact your Account Executive.

 

The Federal Housing Finance Agency (FHFA) has announced an increase to the maximum loan limits for 2018 for both conforming and high balance/super conforming loan amounts. The loan limits apply to both Fannie Mae and Freddie Mac transactions.

*REMN limits the maximum loan amount on Freddie Mac transactions to $1,000,000 regardless of the number of units.

Actual loan limits for certain high-cost counties may be lower than the maximum loan amount identified above. If the loan is a high balance/super conforming loan, it is important to check the loan limit for the specific county in which the property is located.

A complete list of counties, including high-coast area counties and their specific maximum loan limit, may be viewed at fhfa.gov.

The new 2018 loan limits may be applied to new submissions and to loans currently in the pipeline. The REMN Fannie Mae and Freddie Mac matrices have been updated with the 2018 loan limits and are posted at remnwholesale.com.

 

If you have any questions, please contact your Account Executive.

The Department of Veterans Affairs (VA) has announced the 2018 loan limits in VA Circular 26-17-41 issued December 12, 2017. The new loan limits are effective for VA loans funding on and after January 2, 2018.

VA loan limits for 2018 will match conventional loan limits as set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac.

As a reminder, VA does not impose maximum loan amounts. The county limits are used to calculate the maximum guaranty amount (see “NOTE” below). Loan amounts that exceed the county limit will require a down payment from the borrower.

Actual loan limits for certain high-cost areas may be lower than the maximum loan amount listed above. The complete list of counties, including high-cost counties and their specific maximum loan limit, may be viewed at FHFA.

NOTE:   When determining the VA guaranty, the one unit column limit on the FHFA Table is used to determine the applicable guaranty (e.g. if a veteran is purchasing a 4-unit dwelling for $700,000 in a county where the 1-unit limit is $453,100, VA’s maximum guaranty amount would be 25% of $453,100)

Reminder:  County limits do NOT apply to IRRRLs.

If you have any questions, please contact your Account Executive.

The Department of Housing and Urban Development (HUD) has announced the 2018 loan limits in HUD Mortgagee Letter 2017-16, issued December 7, 2017. The FHA loan limit for the low-cost area “floor” and the high-cost area “ceiling” have increased. Any area where the loan limit exceeds the “floor” is a high cost area. The new loan limits are effective for Case numbers assigned on or after January 1, 2018.

Actual loan limits for certain high-cost counties may be lower than the “ceiling” stated above. To view the FHA mortgage limits for 2018 by county, go to FHA Mortgagee Limits and enter the following information:

  • State and County where the property is located
  • Set Limit Type to “FHA Forward”
  • Set Limit Year to “CY2018”

Reminder:  County limits do NOT apply to FHA Streamline transactions.

If you have any questions, please contact your Account Executive.

October 17, 2017

 

The Federal Emergency Management Agency (FEMA) issued a Disaster Declaration for the state of California due to wildfires.

Declaration Date: October 10, 2017

Incident Period: October 8, 2017

The following counties require re-inspection:

  • Butte, Lake, Mendocino, Napa, Nevada, Orange, Sonoma, and Yuba counties

If the subject property is located in one of the above counties and the appraisal was completed on or before October 8, 2017 REMN Wholesale will require one of the following:

  • An Appraisal Update and/or Completion Report (Fannie Mae Form 1004D), or
  • A Desktop Underwriter Property Inspection Report (Fannie Mae Form 2075).

REMN Wholesale prefers the original appraiser provide the 1004D or 2075 however REMN Wholesale will accept the report from any appraiser as long as the original Appraisal Management Company assigns the appraiser (i.e. if the original appraisal order was placed through AMC Settlement Services, the 1004D or 2075 must also be ordered through AMC Settlement Services).

A 2075 is also required for the three (3) months following the end date of the incident period on the following:

  • FNMA transaction with a property inspection waiver (PIW).
  • FHA Streamline without an appraisal.
  • VA IRRRL.

In the event significant damage is indicated on the 1004D or 2075 additional conditions may apply.

Please contact your Account Executive with any questions.

October 2, 2017

REMN Wholesale is pleased to offer FHA 203(h) Mortgage Insurance for Disaster Victims.

The 203(h) loan is a specialty mortgage designed for people replacing homes that were destroyed in presidentially designated disaster areas.  Disaster victims can secure FHA financing to purchase a rebuild or purchase a new home elsewhere.  FHA makes the process easier by relaxing some of their standard requirements.

203(h) Highlights:

  • Up to 100% LTV for purchases
  • Up to 6% seller concession allowed
  • Delinquencies as a result of the disaster may be ignored from the credit analysis if they are documented to have been caused by the disaster
  • Single Family Residence, PUDs and FHA approved condos (HRAP)
  • Primary Residence only
  • 30 year fixed rate
  • Case number must be assigned within one (1) year from the declaration date of the disaster approved for Individual Assistance
  • Seasoning requirements for a 203(k) refinance do not apply
  • FHA loan amount limits apply
  • No additional pricing adjustments for 203(h)

To qualify for this program the borrower’s existing home must have been severely damaged or destroyed to such an extent that reconstruction or replacement is necessary.  The subject property being purchased does not need to be located within an affected county.

Visit www.FEMA.gov for affected counties.

If you have any questions, please contact your Account Executive.

October 3, 2017

REMN Wholesale is pleased to offer a Home Equity Line of Credit (HELOC) second lien available through TCF Bank.  TCF HELOCs are originated and fund in TCF Banks name.  They are eligible for Broker originations when using REMN Wholesale’s first mortgage loans.

Highlights include:

  • One loan application for first mortgage to be submitted to REMN Wholesale
    • REMN submits the HELOC loan to TCF for origination, underwriting approval and clear to close
    • REMN coordinates with the settlement agent and TCF to request the TCF closing documents for the HELOC when the closing for the first mortgage is scheduled
    • TCF generates closing documents and submits to the settlement agent for simultaneous closing
    • TCF closing documents are valid for seven (7) calendar days
    • All communication with TCF is handled by REMN, broker will not have direct communication with TCF
  • Eligible for Purchase, Rate/Term Refinance and Cash-Out Refinance
  • Primary Residence, SFR, PUD, Condo, 2 unit:
    • Max CLTV 89.99% for HELOCs $5,000 to $350,000
    • Max CLTV 85.00% for HELOCs > $350,000 to $500,000
    • Max combined liens to $1.5M with 730 fico
    • Max combined liens to $750,000 with 700 fico
  • Second Home, single family only:
    • Max CLTV 85.00% for HELOCs $5,000 to $250,000
    • Max combined liens to $1.275M with 730 fico
  • 30 year term
    • 10 year draw period with I/O payments
    • 20 year repayment period
  • Rate uses current prime rate, plus margin from 0.99% to 1.99%
  • Qualifying payment:
    • Fully amortizing payment using rate of Prime + margin, PLUS
    • Payment shock qualifying payment of total line times 0.0018
  • Approvals and pricing are good for 30 days from the date of TCF approval
  • Max TCF DTI Ratios of 38.00% / 45.00% (No exceptions on either ratio)
  • No Foreclosure, deed-in-lieu, short sale or “real estate account paid for less than full balance” within the last five (5) years.
  • No bankruptcy filing within the last eight (8) years
  • TCF uses same appraisal as first mortgage, subject to a TCF desk review
  • Single title commitment allowed up to HELOC line amount up to $250,000
  • Borrower pays TCF loan origination charge of $295 and third party settlement charges;
    • Origination fee is charged against the line, and a net wire is sent to closing
    • Annual maintenance fee of $75 is collected with the first statement
  • Use the tri-merge mid score from the primary wage earner
  • Not eligible for Emerging Banker loan submissions
  • Eligible in all states except: AK, HI, LA, MS, OK, TX, WV

For additional information, please contact your Account Executive.

 

September 27, 2017

REMN Wholesale is pleased to offer FHA 203(h) Mortgage Insurance for Disaster Victims.

The 203(h) loan is a specialty mortgage designed for people replacing homes that were destroyed in presidentially designated disaster areas.  Disaster victims can secure FHA financing to purchase a rebuild or purchase a new home elsewhere.  FHA makes the process easier by relaxing some of their standard requirements.

203(h) Highlights:

  • Up to 100% LTV for purchases
  • Up to 6% seller concession allowed
  • Delinquencies as a result of the disaster may be ignored from the credit analysis if they are documented to have been caused by the disaster
  • Single Family Residence, PUDs and FHA approved condos (HRAP)
  • Primary Residence only
  • 30 year fixed rate
  • Case number must be assigned within one (1) year from the declaration date of the disaster approved for Individual Assistance
  • Seasoning requirements for a 203(k) refinance do not apply
  • FHA loan amount limits apply
  • No additional pricing adjustments for 203(h)

To qualify for this program the borrower’s existing home must have been severely damaged or destroyed to such an extent that reconstruction or replacement is necessary.  The subject property being purchased does not need to be located within an affected county.

Visit www.FEMA.gov for affected counties.

If you have any questions, please contact your Account Executive.

Sep. 18, 2017; rev. Sep. 20, 2017; rev. Sep. 29, 2017; rev. Oct. 3, 2017

The Federal Emergency Management Agency (FEMA) issued a Disaster Declaration for the state of Georgia due to Hurricane Irma.

Declaration Date: September 15, 2017

Incident Period: September 7, 2017

The following counties require re-inspection:

  • Camden, Charlton, Chatham, Coffee, Glynn, Liberty and McIntosh counties

If the subject property is located in one of the above counties and the appraisal was completed on or before September 7, 2017 REMN Wholesale will require one of the following:

  • An Appraisal Update and/or Completion Report (Fannie Mae Form 1004D), or
  • A Desktop Underwriter Property Inspection Report (Fannie Mae Form 2075).

REMN Wholesale prefers the original appraiser provide the 1004D or 2075 however REMN Wholesale will accept the report from any appraiser as long as the original Appraisal Management Company assigns the appraiser (i.e. if the original appraisal order was placed through AMC Settlement Services, the 1004D or 2075 must also be ordered through AMC Settlement Services).

A 2075 is also required for the three (3) months following the end date of the incident period on the following:

  • FNMA transaction with a property inspection waiver (PIW).
  • FHA Streamline without an appraisal.
  • VA IRRRL.

In the event significant damage is indicated on the 1004D or 2075 additional conditions may apply.

Please contact your Account Executive with any questions.

Important Changes To Our Broker and Emerging Banker Agreements  Read More