News From Underwriting 2016 W-2s & transcripts

News From Underwriting 2016 W-2s & transcripts 2-1-17

News From Underwriting FNMA Student Loans

News From Underwriting FHA changes

USDA Reduces Fees

August 24, 2016 - USDA Upfront & annual premium being reduced

FNMA changed self-employed borrower income calculation for borrowers with 1065 or 1120S K-1 income

Since the self-employed income policy updates were announced last year, lenders have provided feedback regarding the difficulty in obtaining documentation to evidence a borrower’s ongoing access to business income, and asked for additional guidance on how to determine whether the business has adequate liquidity to support the withdrawal of business earnings.

2015 Tax Transcript Requirement

Effective with loans closed on or after June 15, 2016, 2015 tax transcripts will be required. If a borrower has filed an extension, Essex will require:

News From Underwriting CHDAP 9-10-15

9/10/15 CalFHA has announced discontinuation of CHDAP 2nd Program!

HUD New Rules effective September 14, 2015

Are you ready?

7/10/15 FNMA has announced several exciting underwriting changes!

• Conversion of principal residence to rental. 30% equity no longer required, Additional reserves no longer required, may follow normal rental income guidelines.

Sapphire Overlays

6/29/15 Sapphire Overlays Effective immediately, Sapphire loans must have: 680 minimum FICO score for all borrowers Maximum 50% DTI Require $1000 admin fee to Essex – please include in BOX 1 of GFE Borrower paid compensation of 1.5% allowed A processing fee is no longer allowed to be charged. Loans currently in our pipeline will be honored under the previous guideline Call your Account Executive today if you have any questions.

2014 tax transcript requirement & Increase of IRS rejection

Effective with loans closed on or after June 15, 2015, 2014 tax transcripts will be required...

FHA Refinances

Effective 1/21/15, Lenders may no longer charge interest past the payoff date: HUD HAS CLARIFIED THAT THIS WILL BE EFFECTIVE FOR LOANS THAT CLOSE AFTER 1/21/15 ONLY


To: All Essex Customers

HUD has recently announced the reduction of MIP. We have a window of opportunity to cancel existing case numbers in order for our customers to take advantage of this announcement.

HUD announces .50% reduction in annual MIP

No other details on when the change will be effective or what the effective date will be based on.

FHA fails to extend flip waiver beyond 12/31/14

All sales contracts must be fully executed prior to 12/31/14 (11:59 pm) to be eligible for the 90 day flip waiver.

VA aligns with FNMA/FHLMC

Although some county limits have increased to $417,000 due to this alignment, some have been reduced to $625,500

On 12/13/14 ,FNMA released version 9.2

The Maximum LTV on cash out refinances is now 80%.

Great news for FHA refinances!

Effective 1/21/15, Lenders may no longer charge interest past the payoff date

Donors Bank Statement on FHA gifts

Due to HUD indemnification requests, going forward, a copy of the donor’s recent bank statement will be required..

FNMA & FHLMC Announce 2015 Maximum Loans

Most counties are unchanged

October 15 extension to file taxes has passed!

Requirements for loans funding on or after October 15, 2014 All FHA, VA, USDA & Conventional Programs where tax returns are required

Effective with new CHDAP 2nd reservations 10/6/14

Maximum DTI: 43.00% Borrower contribution to down payment is no longer required One year Home Warranty required

USDA increases annual fee to .50%

For Conditional Commitments issued by RH on or after 10/1/14, the annual fee will increase from .40% to .50%. The upfront fee of 2.0% remains unchanged.

Desktop Originator-Underwriter August update

Foreclosure, Deed-in-lieu of foreclosure and preforeclosure sale messages: Fannie Mae will update Desktop Underwriter® (DU®) Version 9.1 with the changes described below. The changes included in this release will apply to DU Version 9.1 loan casefiles submitted or resubmitted to DU on or after the weekend of August 16, 2014.

CHDAP (CalHFA) Down payment assistance program: Maximum allowable fees

CHDAP revises maximum Origination effective 6-2-14.

Requirements for 2013 W-2 & IRS Transcripts

For loans underwritten on or after June 15, 2014, 2013 tax transcripts must be obtained. If a borrower has filed an extension, the following must be provided:

5% Down Gifts acceptable to PMI companies!*

*FNMA One Unit Only, Maximum $417,000, owner occupied only with DU/DO approval, borrower is not required to contribute their 5% down payment over 80% LTV/CLTV

Split Premium MI is no longer allowed

Allowed: · LPMI (Lender Paid) · Borrower Paid

FHA announces reduced loan limits

Effective for FHA case numbers ordered on or after January 1, 2014

October 15 extension to file taxes has passed.

Requirements for loans funding on or after December 16, 2013, (copies of extension and last year’s transcripts will no longer be accepted)

Loansifter Changes

LoanSifter will no longer be available for pricing and lock request this Friday, October 18, 2013 after 3PM PST.

For FHA case #’s ordered on or after 10/15/13

New Guidance from FHA on collections, Judgments & disputed accounts

Essex will continue to fund loans

Effective immediately, Essex will require tax returns for all borrowers with income (not applicable to FHA non-qualifying streamlines and VA IRRRL’s) to identify potential 2106 expenses, multiple properties owned and self- employment.

Back to Work Extenuating Circumstances

HUD has announced the addition of loss of income as an extenuating circumstance to credit underwriting in certain circumstances for Purchase transactions only, effective for case numbers ordered on or after August 15, 2013 through September 30, 2016. Existing Essex Credit score overlays still apply.

CalHFA-CHDAP update

Essex to allow Cosigners in conjunction with FHA & CalHFA loans

Requirements for 2012 W-2 & IRS Transcripts

For loans underwritten on or after June 15, 2013, 2012 tax transcripts must be obtained. If a borrower has filed an extension, the following must be provided...

Essex Guidelines for Source of Deposits

“Large Deposit” defined For Conventional loans run through DU/DO: Any single deposit that exceeds 25% of the total qualifying income must be sourced. If joint borrowers have separate accounts, single deposits that exceed 25% of the individual borrowers gross income must be sourced...


A limited project review will no longer be permitted on principal residences in condominium projects when the LTV/CLTV/HCLTV is greater than 80%. DU will require a full project review on principal residences in condominium projects when the LTV/CLTV/HCLTV is greater than 80%...


RELS Appraisal or RELS Field Review required: Conforming and High balance Conventional: REO properties require EITHER one RELS appraisal or an approved AMC appraisal PLUS a RELS field review.



For all FHA Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1.0% percent to 0.01% of the base loan amount...

FHA Mortgage Letter 12-03

FHA has delayed the portion of these underwriting changes regarding collection accounts ONLY pending additional input and clarification. Case numbers assigned between 4/1-4/8 will not be deemed in violation of HUD requirements if not processed per these guidelines. The change in requirements for self- employed borrowers is effective for case numbers issued on or after 4/1/12

Requirements for 2011 Transcripts




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