VanDyk Mortgage News: September 15, 2022

September 15, 2022

• You Asked, We Listened: AskUW@vandykmortgage.comAn underwriting scenario inbox is back! Now you can email your questions directly to AskUW@vandykmortgage.com. This will create a ticket in Howee, and the underwriting manager assigned to your region will respond. Those responses come via email, so watch for responses to come from AskUW!
• Appraisal Modernization Update

Good News! We are officially live with both Fannie and Freddie for all the different appraisal options AND we have negotiated with Clear Capital to match our full appraisal pricing for the Full Hybrid reports.

Please remember to run both AUS and look for your appraisal offering – even on TBDs, you will get notice of a desktop or Hybrid options.

Workflow:

• Both: Full appraisal – Order the appropriate report
• Freddie Mac:  ACE+PDR (this is NOT a full waiver).  You need to order the ACE+PDR property inspection report which runs around $250.
• Both:  Desktop option – no inspection required.  Get a floorplan layout from the realtors and order the Desktop report.  Should take less time and cost a little less.
• Freddie Mac:  Hybrid 70H – Order the Freddie Mac Pilot 70. This is a bifurcated process.  An inspection will be done by a third party usually the next day and then it goes to an appraiser for a Desktop report using the information in the PDR that the inspector provides.
• Fannie Mae:  Hybrid 1004H – Order the Fannie Mae 1004 Hybrid. This is a bifurcated process.  An inspection will be done by a third party usually the next day BUT the PDC report is submitted directly to Fannie Mae and they will determine if they need the full 1004H or are satisfied with the value+PDC.  I am told 40% of the time this will be it for $250.  The remaining 60% will be sent to the appraiser for a Desktop report using the information in the PDC that the inspector provides.

These Hybrid options are pilot programs to help reduce turn times and allow appraisers to stay home and do more reports

• Reverse Mortgages: UpdateWe have closed our first PA Reverse and finalized the fee package for our Reverse Support Team’s services.  Look for meeting invitations where we will review the helpful and beneficial services available from this awesome team coming soon!
• Reminder: Run BOTH AUS!

We encourage you to run both DU and LPA to ensure you are offering the best appraisal option, the smartest qualifying documentation, and the most competitive interest rates.

• Conventional Buydowns

We recently announced a conventional buy-down option – the full newsflash is attached for your reference.

• Expanded Credit Scores

We are thrilled to announce 500-579 FICOs are now eligible for FHA and VA Financing with Approve/Eligible AUS Findings (no manual downgrades)!  Terms are limited to 360 months only.  First-Time Homebuyers will require a Homebuyer Education Cert and all buyers will require a satisfactory 12-month VOR/VOM.  Find attached our updated VA and FHA Fixed Matrices for further details.

• Jumbo Updates: PenFed, US Bank, Maximum Loan Amounts

Effective immediately: PenFed has been suspended as a Jumbo outlet. PenFed is working through some operational changes. During their operational changes, we have decided to suspend them as an outlet.  We will continue to monitor their ops changes and advise once we feel their service levels and pricing have returned to an acceptable level.

• • With the suspension of PenFed as a Jumbo outlet our max Jumbo loan amount internally has been reduced to $2 million. Anything over and above that loan amount would need to be brokered. We will advise when we are able to offer higher loan amounts.

Effective immediately, US Bank has lowered their maximum LTV to 80%.

• Broker Partner Update: GoPointDirect

On September 12, we received news that GoPointDirect abruptly closed their doors. There has not been any indication from GoPointDirect that they will fund the loans that remain in their pipeline. From what we have heard elsewhere, it doesn’t sound like they will be following through on loan commitments already in process. If we hear from GoPointDirect or any other industry chatter, we will make sure to communicate that to you.

The non-QM market has remained rather volatile as rates continue to move higher. Liquidity remains a major issue in this space as investors have moved to safer assets. We continue to see non-QM outlets tighten their credit box as a risk off approach enters this space.

We remain committed to providing you all with as many products as we can in the non-QM space and will search for other outlets if any gaps arise from consolidations or industry exits.

• QC Process: Reminder

As a reminder, QC Reviews are no longer completed at initial underwrite and are handled as follows:

Regular Reviews – 10% Requirements

1. Selected at Conditional Approval/Resubmittal at least 5 business days prior to the Closing Date – Email will go out to all parties and condition will be added
2. UW will move loan to “Approval” and notify QC Auditor after running final AUS file is ready for review.
3. Loan will not be CTC until QC Audit is cleared

Discretionary Reviews – MCRs / Manual UWs

1. Selected at Conditional Approval (no TBD) at least 10 business days prior to the Closing Date – Email will go out and condition will be added
2. QC will review in any of the following milestones – Conditional Approval, Resubmittal, Approval
3. Loan will not be CTC until QC Audit is cleared

Please ensure loans selected for pre-closing QC review are resubmitted ahead of the closing date for final review to avoid any delays in meeting the contract date.

• Escrow Holdback – Fee Increase

Due to an increase in appraisal charges, we are increasing the escrow holdback fee to $200, effective immediately.

Agency Updates

• Fannie Mae

Personal Gifts: Per Selling Guide Announcement SEL-2022-08 (attached), Fannie Mae has expanded the list of acceptable donors for Personal Gift Funds to include a non-relative that shares a familial relationship with the borrower, specifically a former relative, relative of domestic partner, and godparent.  This update has impacted section B3-4.3-04, Personal Gifts, of the Selling Guide.

• Freddie Mac

Gift Funds: Freddie Mac is also expanding on gift fund and gift letter requirements as a means of reaching for First-Time Homebuyers.  As such, they are updating their requirements to allow graduations gifts from both related and unrelated persons for the purchase of a Primary Residence.  See attached Bulletin 2022-18 for further information on documentation requirements.

In addition to this expansion, Freddie has updated their requirements to allow gift letters to state the MAXIMUM amount of the gift funds or gift of equity OR the actual amount.  This will eliminate the need to obtain a corrected gift letter should the actual amount of the gift be less than the amount stated on the gift letter.

1099 Employment/Income: Freddie Mac is providing more detailed guidance on income received on IRS Form 1099.  Attached Bulletin 2022-18 outlines a summary of the existing and updated requirements surrounding this income type.

• USDA

Rural Development Fee Structure for Fiscal Year 2023: The fees for the coming year have remained unchanged at 1% upfront guarantee fee and .35% annual fee for both purchase and refinance transactions.   See also Fiscal Year 2023 Conditional Commitment Notice (govdelivery.com) regarding yearly lapse in funding.   The lapse will have no effect on our loan flow or procedures.

Upcoming Events and Reminders

If you need an invitation to one of the Zoom meetings, please respond to this message.

• Iron Sharpens Iron – Tuesday, September 20 @ 11am Eastern
• VanDyk Mortgage Newscast (Formerly Ops Huddle) – Friday, September 16 @ 1:30pm Eastern
• Production Roundtable – Thursday, September 22 @ 3pm Eastern
• 35^th Anniversary Events
• October 8, 2022 | Ops Fly-in 35^th Anniversary Meet and Greet
• March 2 – 4, 2023 | Annual Sales Fly-in

Property Taxes – Important!

We are approaching the months of the year where property taxes are coming due. This is important for us when structuring our LEs and cash to close on files. Many title companies and attorneys’ offices will begin using the estimates for what is due to establish tax proration credits, and we will also need to account for this in our escrow account set-up as well, which in turn effects the final monthly payment we use for qualification.

Please be sure that you are reviewing the most up-to-date estimates in your locality. Also be reminded that in situations where taxes or CDDs are paid for the year in advance, there is a considerable reimbursement due from our Borrowers to the Sellers on purchase transactions. This often times grossly increases cash to close over what we may have estimated – please review your LEs and escrow account set-ups carefully and make sure that your borrowers have the most accurate information up front.

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Reminder: Tax Proration Credits

We have completed the research in all agencies as to when the Tax Proration can show on the URLA and run through the AUS:

1. 1. FNMA Conventional DU – You CAN add to URLA DOT and run through AUS; Can show on the CD
   2. Freddie Mac Conventional LPA – You CANNOT add to URLA DOT and run through AUS; Can show on the CD
   3. FHA – You can only add to ULRA DOT and run through AUS “IF” the borrower has sufficient funds for the 3.5% MRI + Closing Costs + Prepaids less any seller/lender/OTP credits; Can show on the CD
   4. USDA – You CAN add to URLA DOT “IF” the borrower is not receiving any cash back from the Tax Proration; Can show on the CD BUT the borrower CANNOT receive any cash back from the Tax Proration Credit.
   5. VA – You CAN add to URLA DOT and run through AUS; Can show on the CD AND borrower CAN receive cash back from the Tax Proration Credit.