Showing posts with label and VA Government Loans Due to Covid-19 Coronavirus. Show all posts
Showing posts with label and VA Government Loans Due to Covid-19 Coronavirus. Show all posts

Kentucky Mortgage Forbearance Guidelines

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Kentucky Mortgage Forbearance Guidelines for Fanni...: 


Conventional Mortgage Loans by Fannie Mae



Mortgage credit history for any mortgage which the borrower is obligated as borrower, co-borrower, or co-signer may be
considered acceptable if it meets one of the following:
 The borrower has made all payments due on time, prior to subject loan Note date, even though the loan was in
forbearance, or
 The borrower has not made one or more payments due, and the late payments or forbearance has been resolved
per one of these acceptable resolution plans:
Resolution Plans* Eligibility Requirements
Reinstatement ▪ Any missed payments must be made

▪ Funds to reinstate after application must be documented from eligible source
▪ Funds from the current transaction may not be used to reinstate mortgage
Repayment Plan ▪ Must have made 3 timely** payments under the repayment plan, or

▪ Repayment plan has been completed
▪ Funds from the current transaction may satisfy the existing mortgage in full
Payment Deferral ▪ Must have made 3 timely** payments after executing the deferral agreement
▪ Funds from the current transaction may satisfy the existing mortgage in full

Modification ▪ Must have made 3 timely** payments under trial modification

▪ Funds from the current transaction may satisfy the existing mortgage in full
Any Other Loss Mitigation Option ▪ Must have completed successfully or made a minimum of 3 timely payments
▪ Funds from the current transaction may satisfy the existing mortgage in full
*If loan was in forbearance, provide documentation from servicer showing the exit from forbearance into one of the
acceptable resolution plans.
** Payments cannot be made in advance to meet the 3 required payments.
 For purposes of determining acceptable mortgage payment history, missed payments under a COVID-19 forbearance
are not considered late payments.
 The above guidance does not apply to Freddie Mac Enhanced Refinance or Fannie Mae High LTV Refinance
transactions.





VA ELIGIBILITY


 Borrowers must provide a Letter of Explanation (LOE) stating the circumstances behind the forbearance.
Documentation will be required to verify the items listed in the LOE have been resolved.
 If the forbearance was on a non-subject property, the forbearance must be resolved, and new payment (if
applicable) must be included in the DTI.
 A Veteran who was granted a forbearance and continues to make payments as agreed under the terms of original
note is not considered delinquent or late and will be treated as if not in forbearance status, provided that the
forbearance plan is terminated prior to closing.


Cash-Out Refinances


 Refinance of mortgages that are in a current forbearance status, where mortgage payments are not being made,
including mortgages under the CARES Act forbearance protection program, are not eligible. The forbearance plan
must be completed/terminated prior to closing.
 Borrower in forbearance with missed payments- Borrower must have made 6 consecutive months’ timely payments
post-forbearance, regardless of method of resolution of the forbearance.
 Missed payments due to COVID-19 forbearance cannot count toward seasoning. Borrower must have made six
consecutive monthly payments prior to the CARES Act forbearance or six consecutive payments will be required post
forbearance. In addition, loans that have been modified must meet seasoning requirements based on the modified
note first payment date. The new note date must be on or after the later of: The date that is 210 days after the date
on which the first modified monthly payment was due on the mortgage being refinanced, and the date on which 6
modified payments have been made on the mortgage being refinanced.

IRRRL Refinances

 Borrowers must be current at time of application (any skipped payments under a COVID-19 forbearance have since
been made).
 Borrower in forbearance with no missed payments- standard underwriting applies.
 Borrower in forbearance with missed payments- Borrower must have made 6 consecutive months’ timely payments
post-forbearance.
 Loans must still meet loan seasoning, fee recoupment, discount points, and net tangible benefit requirements.
 Missed payments due to COVID-19 forbearance cannot count toward seasoning. Borrower must have made six
consecutive monthly payments prior to the CARES Act forbearance or will need to make six consecutive payments
post forbearance. In addition, loans that have been modified must meet seasoning requirements based on the
modified note first payment date. The new note date must be on or after the later of: The date that is 210 days after
the date on which the first modified monthly payment was due on the mortgage being refinanced, and the date on
which 6 modified payments have been made on the mortgage being refinanced.



FHA ELIGIBILITY


*NOTE: FHA Guidance is permanent, not temporary, and applies where a Forbearance Plan was granted due to COVID-19, Presidentially Declared major
disaster or other hardship. This new guidance has been included in the updated 4000.1 Handbook.
Payment
History
Documentation

When any mortgage reflects payments under a Modification or Forbearance Plan within 12 months prior to case number
assignment, obtain:
 Copy of Modification or Forbearance Plan* and
 Evidence the payment amount and the date of payments during the agreement
* A copy of Forbearance Plan due to the COVID-19 National Emergency is not required. Must be able to determine the reason for
forbearance.


Borrowers that are or were in Forbearance


Maximum base loan amount for a Streamline of an owner-occupied primary residence and HUD-approved second home is
the lesser of:
 The outstanding principal balance of the existing mortgage (including suspended payments from forbearance) as of
the month prior to mortgage disbursement; plus:
o Interest due on the existing mortgage
o Late charges and escrow shortages
o MIP due on existing mortgage; or
 The original principal balance of the existing mortgage (including financed UFMIP)
 Less any refund of UFMIP

New FHA Insured Mortgage Eligibility


 Any active forbearance plan must be terminated.
 Borrowers granted forbearance but who continued to make all payments as agreed under the terms of original Note
are not considered delinquent. No additional payment seasoning post forbearance required.
 Borrowers granted forbearance but who did not continue to make payments require additional mortgage payment
seasoning post-forbearance that document satisfactory, consecutive monthly payments. See chart below for details:
Transaction Additional Requirements
Purchase Must make three consecutive payments* post-forbearance or

▪ If home sold prior to making three payments, must be manually underwritten

Cash-Out Refinance Must make 12 consecutive payments* post-forbearance

GNMA Seasoning: Loans that have been modified must meet seasoning
requirements based on the modified note first payment date.



No Cash Out Refinance Must make three consecutive payments* post-forbearance (six payments if

mortgage was modified after forbearance)

Simple Refinance Must make three consecutive payments* post-forbearance
*NOTE: The consecutive payments must be documented on the credit report and read by AUS to follow AUS approval.
Streamline Refinance  Missed payments under forbearance do not count toward mortgage

seasoning requirements
 If mortgage modified after forbearance, six payments under
modification required.
Non-Credit Qualifying
 At time of case number assignment, borrower has made three post
forbearance payments.
Credit Qualifying
 At time of case number assignment, borrower is still in mortgage
payment forbearance or has made less than three monthly payments,
and
 Has made all mortgage payments due within the month due for the six
months prior to forbearance
***ALL Streamlines: GNMA Seasoning: Loans that have been modified must
meet seasoning requirements based on the modified note first payment date.

References FHA Mortgagee Letter 2020-30:


USDA ELIGIBILITY




 For each open mortgage, confirm the forbearance status and payment history.
 Borrowers who have a current mortgage that was placed in COVID-19 forbearance, but continued to make all
payments as scheduled, are not subject to additional seasoning.
 Purchases: Borrowers who missed any payments as allowed under the forbearance plan must have resumed
repayment of their mortgage loan for a period of at least 3 months prior to applying for a new loan.
 Refinances: the loan must have closed at least 12 months prior to the request to refinance, borrower must have
resumed making payments for a period of at least 3 months and have a total 180-day period of satisfactory
payments, excluding the time the loan was in forbearance.




LOANS MADE TO BORROWERS POST-FORBEARANCE


The guidance herein is based on Agency and Investor eligibility. The below is a summary and not all-inclusive of Agency announcements. For full

Agency guidance see the Resources section under each program section below.


IN ALL CASES THE FOLLOWING REQUIREMENTS APPLY:


 BORROWER MAY NOT BE IN FORBEARANCE ON THE SUBJECT PROPERTY MORTGAGE OR ANY OTHER NON-SUBJECT PROPERTY
MORTGAGES AT THE TIME OF LOAN CLOSING.
 Explanation from Borrower(s) for forbearance reason and how any hardship has been overcome is required. If borrower faced hardship,
documentation supporting resolution is required. (e.g. borrower was furloughed for a time and is now back to work and employer
documentation supports).
 Payment history required for most recent 12-months to see payment made dates to determine if borrower skipped any payments.
 Documentation from servicer that forbearance has ended.
 Asset sourcing to document funds for any lump-sum payments made to reinstate/bring mortgage current- 2 months consecutive
statements required.
 If borrower entered into modification/work out plan rather than reinstating the forbearance, a copy of plan must be obtained. See
applicable Agency guidance for eligibility in this case.


Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com

 


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Kentucky USDA, FHA, and VA Government Loans Due to Covid-19 Coronavirus

Updates to Kentucky USDA, FHA, and VA Government  Loans Due to Covid-19 Coronavirus

VA Circular 26-20-11
Kentucky VA Mortgage And Coronavirus Impacted Changes Below:

Effective immediately, for all Kentucky VA Mortgage transactions requiring an appraisal. These flexibilities will remain in effect until the earlier of April 1, 2021 or when rescinded by VA.

In areas where there are no mandatory quarantine or shelter in place orders, an exterior appraisal may be performed if any party does not wish to enter the subject property, or is showing flu-like symptoms. In areas where there are mandatory quarantine or shelter in place orders, a desktop appraisal may be performed.

Base loan amounts over the county loan limit will require a full appraisal.

Both exterior only and desktop appraisals must meet the additional requirements outlined in VA circular 26-20-11, including but not limited to any interview with the occupant or real estate agent, measuring the footprint of the home, and use of any MLS photos. Due to the extensive requirements, Correspondents are urged to read the circular for complete details.

VA Circular 26-20-10

Effective immediately, for all Kentucky VA  Mortgage transactions, , including but not limited to the VVOE options. These flexibilities will remain in effect until the earlier of April 1, 2021 or rescinded by VA.
We may utilize employment and income verification third-party services, however fees for these services may not be charged to the veteran. If we are unable to use third party services, we may provide evidence of one of the following:

direct deposit from a bank statement and pay stubs covering a at least one full month of employment within 30 days of the closing date, or
cash reserves totaling at least 2 months mortgage payments (PITI+A) post-closing, in addition to any other required reserves and funds to close.

When using either the direct deposit and bank statements, or the additional cash reserves must indicate in box 47 of the remarks section of VA Form 26-6393 Loan Analysis.

Kentucky FHA Mortgage Changes due t Coronavirus and Covid-19


  FHA ML 2020-05

Effective immediately Kentucky FHA Loans will follow ML 2020-05, including but not limited to flexibilities for appraisals and VVOEs. Appraisal flexibilities are effective through inspections on or before May 17, 2020. VVOE flexibilities are effective through loans closed on or before May 17, 2020.

FHA does not need to provide a re-verification of employment within 10 days of the note date provided that the correspondent is not aware of any loss of employment by the borrower and has obtained:
Evidence the Borrower has a minimum of 2 months of Principal, Interest, Taxes and Insurance (PITI) in reserves; and
Purchase and refinances require one of the following:
a year-to-date paystub or direct electronic verification of income for the pay period that immediately precedes the note date, or
a bank statement showing direct deposit from the borrower’s employment for the pay period that immediately precedes the note date.

FHA purchase transactions are eligible for either an exterior only or desktop appraisal. FHA rate and term refinances are eligible for an exterior only transaction. Exterior only and desktop appraisals must meet the additional requirements outlined in ML 2020-05. Construction-to-perm, new construction, cash-out, and 203(k) transactions continue to require a full appraisal.


Kentucky USDA Mortgage Changes with Coronavirus and Covid-19

USDA Temporary Exceptions for Appraisals, VVOEs, and transcripts

USDA’s temporary flexibilities for appraisals and VVOEs. This flexibilities are effective through conditional commitments issued on or before May 26, 2020.

For purchase and non-streamlined refinance transactions, when an appraiser is unable to complete an interior inspection of an existing dwelling due to concerns associated with the COVID-19 pandemic, an “Exterior-Only Inspection Residential Appraisal Report”, (FHLMC 2055/FNMA 2055) will be accepted. In such cases, appraisers are not required to certify that the property meets HUD HB 4000.1 standards. The appraisal must be completed in accordance with the Uniform Standards of Professional Practice (USPAP) and the Uniform Appraisal Dataset (UAD).

New construction and construction to perm transactions continue to require a full appraisal.

USDA  will accept one of the following:

An email meeting the following requirements:
from the borrower’s direct supervisor/manager or the employer’s HR department, and
from the employer’s email address, such as name@company.com, and
contain all the standard information required on a verbal verification of employment, including the name, title, and phone number of the person providing the verification.
An additional two months of cash reserves (PITIA) in addition to any other required funds for reserves and closing.

USDA requires tax transcripts to ensure all income is considered for purposes of annual income calculation.  USDA guidelines HB-1-3555 9.3 (E) 4 allows for loans to be closed without tax transcripts when the loan file contains evidence that transcripts were unable to be obtained. A response from the vendor may be acceptable to meet these requirements.

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