Just a heads up on some of the changes that came into effect this past Wesnesday, April 1, 2009, complements of the Mortgage Currency staff:

FHA just released ML 2009-08 – Limits on Cash Out Refinances – going to 85% with case numbers after April 1, 2009. The news is that the 95%’s cash out refi’s are going away – for now!

Plus the 85% will be figured on the Combined LTV!

* New Subordinate Financing: New subordinate financing + new FHA first mortgage + any new junior liens cannot exceed 85% CLTV.

* Existing Subordinate Financing: May remain in place, subordinate to new FHA first mortgage, with no regard for CLTV.

* Modified Subordinate Financing: Newly modified existing subordinate financing that has to be re-executed at closing with new FHA loan is not considered a new subordinate lien. It is treated as existing subordinate financing.Other Reminders

* Delinquent borrowers are not eligible * Must have owned the property at least 12 months

* If owned less than 12 months, value based on the sale price or appraisal–the lower of the two

* Two appraisals required when loan amount exceeds $417,000 (before UFMIP) and is in declining area

* No co-signers or non-owner occupants can be added to meet credit underwriting guidelines

Mortgage Talking Points

Tags: FHA, guidelines, cash-out, refinance, mortgages

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