New FHA Requirements
Victorville and the High Desert will be feeling the New Fha Requirements
New Flash!!!
As of July 11, 2011 Governor Brown signed into effect Senate Bill 458 ( Chapter 82, Statutes of 2011) which took effect immediately. This provision of SB 458 expanded the previous statue which prohibited a first lein holder from filing a deficiency judgement against a seller after a short sale, and expanded this no recourse coverage to include any junior loans secured against a dwelling of not more then four units. Sb 458 also included a provision which prohibits a lender from requiring a seller to make any additional payments above and beyond the sales proceeds including a cash contribution at closing.
Among other things, SB 458 specifically:
Provides that the lender cannot obtain a deficiency judgement for any loan without regard for purchase money or non-purchase money statuus or loan seniority, for loans secured by a deed of trust or mortgage on a dewelling of not more then four units, where the seller has voluntarily sold the property for less then what is owed and the sale proceeds have been paid to the lender in accordance with the parties agreement
Prohibits a short sale lender from requiring seller funds be deposited to closing as part of the short sale agreement specifically, that a lender"shall not require the trustor, mortgagor or maker of the note to pay any additional compensation, aside from the proceeds of the sale, in exchange for the written consent to the sale
It will allow the lender to retain existing rights and remedies for recovery if the borrower has committed fraud or waste: Does not apply to commercial Loans made to legal entities
This information has been provided by the California Escrow Association:
Real Estate Agents, Escrow Officers are not Lawyers, all concerns should be discussed with a Attorney
In the past Fha did not limit a borrower by credit score; instead determination was passed along to the lenders in underwriting the mortgages. To qualify for the 3.5% down, the borrowers now will need a credit score of at least 580. For those scores falling between 500 and 580 the down payment will more then double to 10%. No FHA loans will be issued without at least a 500 credit score
To Day Lenders are becoming more Cautious
Lenders are avoiding the errors of the bubble years. Now they are combining applicants financial records and credit reports with diligence.. Now Fha feels that the lenders didn't follow guidlines, they can refuse to insure and the lender has to pony up the cash to replace the funds on their warehouse line.
Today the Credit Reports Are Recieving a closer Scrutiny
As a Borrower you must be hypervigilant. Just because you have been approved doesn't mean you can rest at ease. Many borrowers are demanding written letters for all credit inquires that show up after they apply for a mortgage. The loan will not close unless you can prove that they have not taken any new debt related to those inquiries
