VA Guaranteed Home Loans
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VA Guaranteed Home Loans VA Guaranteed Home Loans Document Transcript

  • VA Guaranteed Home Loans Satellite and Streaming Video Lender Training Full Reviews of VA Home Loan Packages January 23, 2008 Student Materials U S Department of Veterans Affairs – Veterans Benefits Administration Loan Guaranty Service Training Unit - 264B http://www.homeloans.va.gov/broadcast.htm
  • Table of Contents Course Objective/Outline 3 Regional Loan Centers Contact 4 Website Directory 5 Documents Required For Full Review 6 Other Necessary Documents 8 Allowable Charges To The Veteran 12 VA Funding Fee Tables 16 FY 2008 Broadcast Schedule 17 Available Videos 19 U S Department of Veterans Affairs – Veterans Benefits Administration Loan Guaranty Service Training Unit - 264B http://www.homeloans.va.gov/broadcast.htm
  • Course Objective and Outline Course objective: When we have finished, you will be able to: list the reasons a case gets selected for a Full Review; respond promptly with all the correct documentation to a Full Review request; respond to deficiency letters when necessary; prevent any adverse consequences that might result from a Full Review; and use the results of the Full Review in training your employees Outline I Selection Criteria II. Documents Required III. Documents Reviewed IV. Eligible Purposes V. Documentation of Decisions VI. Fees and Charges VII. Notice of Value (NOV) conditions VIII. Special Reviews IX. Early Defaults X. Probationary Lenders XI. Post Audit XII. Most Common Deficiencies XIII. Funding Fee Payment System (FFPS) XIV. Automatic Underwriting Systems (AUSs) XV. Deficiency Letters XVI. Follow-up Actions 3 of 19
  • Regional Loan Centers Contact Regional Loan Center Jurisdiction Telephone Atlanta Georgia, North Carolina, 1-888-768-2132 South Carolina, Tennessee Delaware, Indiana, Cleveland Michigan, New Jersey, 1-800-729-5772 Ohio, Pennsylvania Alaska, Colorado, Idaho, Denver Montana, Oregon, Utah, 1-888-349-7541 Washington, Wyoming Honolulu Hawaii 1-808-433-0481 Houston Arkansas, Louisiana, 1-888-232-2571 Oklahoma, Texas Connecticut, Maine, Manchester Massachusetts, 1-800-827-6311 New Hampshire, New York, Rhode Island, Vermont Phoenix Arizona, California, 1-888-869-0194 Nevada, New Mexico Kentucky, Maryland, Roanoke Virginia, Washington, DC, 1-800-933-5499 West Virginia Illinois, Iowa, Kansas, St. Paul Minnesota, Missouri, 1-800-827-0611 Nebraska, North Dakota, South Dakota, Wisconsin Alabama, Florida, St. Petersburg Mississippi, Puerto Rico, 1-888-611-5916 US Virgin Islands Nationwide Winston-Salem Eligibility ONLY 1-888-244-6711 4 of 19
  • WEB SITE DIRECTORY Address What’s There? Lender’s Handbook, VA forms, www.homeloans.va.gov FAQs, information pamphlets, Regional Office directory Veterans Information Portal http://vip.vba.va.gov Includes TAS, WebLGY & condo and builder listings. www.va.gov/vaforms VA Forms www.homeloans.va.gov/train.htm Free training on the VA Home Loan Guaranty Program, including live satellite / internet streaming broadcasts, web-based courses, and streaming On-demand targeted videos. National Personnel Records http://vetrecs.archives.gov Center (Obtain military records.) National Association of State www.nasdva.com Directors of Veterans Affairs http://va.pay.gov Funding Fee Payment System Military pay charts, housing, www.military.com installations, etc. Nationwide VA acquired property www.ocwen.com listings. Mortgage calculators, find a lender, closing costs explained, www.mortgage-x.com etc. (Independent information service, not affiliated with any lending institution.) 5 of 19
  • DOCUMENTS REQUIRED FOR FULL REVIEW Order Document 1 Lender’s cover or transmittal letter (if used) 2 VA Form 26-0285, VA Transmittal List [ ] 3 VA Form 26-0286, VA Loan Summary Sheet [ ] 4 VA Form 26-8320 (or 26-8320a), Certificate of Eligibility 5 Funding Fee receipt from the Funding Fee Payment System (FFPS) or evidence borrower is exempt. Reference: See section 8 of chapter 8 for information on exemptions. 6 VA Form 26-6393, Loan Analysis 7 For Automated Underwriting cases: Feedback Certificate and underwriter’s certification (acceptable variations on the documentation required in items 17, 18, and 19 that follow, and the underwriter’s certification, are explained in section 8 of chapter 4). 8 VA Form 26-1820, Report and Certification of Loan Disbursement 9 Lender’s quality certification per 38 CFR part 36 and 38 U.S.C. Chapter 37 (See Step 7 of the Lender Procedures in section 1 of chapter 4.) 10 VA Form 26-8937, Verification of VA Benefit-Related Indebtedness (if applicable) 11 HUD-1, settlement statement 12 Evidence of compliance with MCRV or [ ] NOV requirements; such as, final compliance inspection, termite certification, warranty. 13 If loan is submitted more than 60 days after loan closing, a statement signed by a corporate officer of the lender which identifies the loan, provides the specific reasons for late reporting and certifies that the loan is current. This statement must be submitted with any late request for issuance of a Loan Guaranty Certificate. 14 Interest Rate and Discount Disclosure Statement. 15 VA Form 26-0592, Counseling Checklist for Military Homebuyers, if applicant is on active duty. 16 Uniform Residential Loan Application (URLA) with revised VA Form 26-1802a, HUD/VA Addendum to URLA. • These forms may be signed and dated anytime from the date of initial application to the date of loan closing. • These forms must be properly completed and legible, but do not have to be typed. 17 All original credit reports obtained in connection with the loan and any related documentation 18 VA Form 26-8497, Request for Verification of Employment, and other verifications of income such as pay stubs and tax returns. Reference: See Section 2 of chapter 4. 6 of 19
  • DOCUMENTS REQUIRED FOR FULL REVIEW (CONT’D) 19 VA Form 26-8497a, Request for Verification of Deposit, and other related documents (Alternative documentation: Original or certified true copies of last two bank statements). 20 Purchase/earnest money contracts. 21 • LAPP Notice of Value (NOV) and any special requirements or conditions applicable to the property[ ]. • VA Form 26-1843a, Master Certificate of Reasonable Value (MCRV), with any applicable endorsements and/or change orders (VA Forms 26-6363 and/or 26- 1844 or VA computer generated form). Highlight to show lot and block identification, house type valuation, and optional equipment applicable to veteran’s purchase. 22 The original Freddie Mac Form 70/Fannie Mae Form 1004, Uniform Residential Appraisal Report (URAR) including all addendum’s, photographs and any document(s) revising or correcting the fee appraiser’s original URAR Note: The URAR and attending information is not required when VA Form 26- 1843a, MCRV, is submitted. 23 Any other necessary documents. Other necessary documents are verifications, explanations, forms, etc., that are either: • required by VA under certain circumstances, or • necessary to clarify some aspect of the loan or the borrower’s qualifications. 7 of 19
  • OTHER NECESSARY DOCUMENTS The table below provides some of the circumstances for which VA requires specific additional documentation to be submitted with the loan closing package. Circumstances Required Documentation Loan includes funds for energy efficiency Improvements of $3,000 to $6,000: improvements Documentation of the lender’s determination that the increase in monthly mortgage payments does not exceed the likely reduction in monthly utility costs. Improvements up to $6,000: Evidence of the cost of improvements such as a copy of the bid(s) or contract itemizing the improvements and their cost. Improvements over $6,000: Documentation of VA’s valuation of the energy efficiency improvements. Reference: See section 3 of chapter 7 for details, including special provisions for IRRRLs. Postponed completion of exterior • VA Form 26-1847, Request for Postponement improvements of Offsite or Onsite Improvements-Home Loan, and • VA Form 26-1849, Escrow Agreement for Postponed Exterior Onsite Improvements, or • VA Form 26-6378, Escrow Agreement for Postponed Exterior Offsite Improvements. Reference: See section 9 of chapter 9. Loan involves use of an attorney in fact Power of attorney meeting the requirements described in section 7 of chapter 9, including written evidence of the veteran’s consent to the specific transaction plus the lender certification found under the “Requirements” heading. [ ]. Veteran intended to sell property on which • A completed VA Form 26-1880, Request for a he/she has an existing VA loan prior to closing Certificate of Eligibility for VA Home Loan on the new VA loan, in order to have Benefits, and entitlement restored • evidence that the veteran has sold the property and either − evidence that the veteran has fully repaid the prior loan, or Note: a HUD-1 settlement statement clearly showing sale of the property by the veteran and pay-off of the prior VA loan satisfies this requirement. − documentation that the veteran can be released from liability and the assumer meets the requirements for substitution of entitlement. 8 of 19
  • Veteran intended to sell property in order to Lender’s certification that the sale of the veteran’s have sufficient income and/or assets to qualify property has been completed and the proceeds for the loan disbursed. Note: The lender’s certification must be based on its examination of a HUD-1 settlement statement or other appropriate documentation of the transaction. Loan is to the unmarried surviving spouse of The following affidavit obtained from the an eligible, deceased veteran surviving spouse at the time of loan closing: “I, ________, being first duly sworn, on oath, say, that, on the __ day of ______, 2___ (insert date loan was closed), I am (was) the unmarried surviving spouse of _________ and that I make this affidavit for the express purpose of inducing _______ to make a loan to me and/or for inducing the Department of Veterans Affairs to guarantee or insure such loan, knowing that it is a criminal offense to make a false statement for this purpose; and that the above and foregoing is true and correct.” _____________ _______________________ Notary’s jurat Signature of surviving spouse Loan is to the spouse of a serviceperson Documentation that, at the time of loan closing, missing in action or prisoner of war the lender asked the applicant and the applicant (MIA/POW) provided verbal assurance that • no official notice of any change in the service member’s status had been received, and • applicant was still the spouse of the service member. Graduated Payment Mortgage (GPM) Veteran’s statement acknowledging payment increases. Reference: See section 6 of chapter 7. Supplemental loan for home improvements See “Procedures” in section 5 of chapter 7. There are restrictions on the purchase or resale Veteran’s written consent to the restrictions of the property the veteran is purchasing (obtained at the time of loan application). Reference: See section 2 of chapter 9. 9 of 19
  • OTHER NECESSARY DOCUMENTS The table below provides some of the circumstances for which VA requires specific additional documentation to be submitted with the loan closing package. Circumstances Required Documentation Loan includes funds for energy efficiency Improvements of $3,000 to $6,000: improvements Documentation of the lender’s determination that the increase in monthly mortgage payments does not exceed the likely reduction in monthly utility costs. Improvements up to $6,000: Evidence of the cost of improvements such as a copy of the bid(s) or contract itemizing the improvements and their cost. Improvements over $6,000: Documentation of VA’s valuation of the energy efficiency improvements. Reference: See section 3 of chapter 7 for details, including special provisions for IRRRLs. Postponed completion of exterior • VA Form 26-1847, Request for Postponement improvements of Offsite or Onsite Improvements-Home Loan, and • VA Form 26-1849, Escrow Agreement for Postponed Exterior Onsite Improvements, or • VA Form 26-6378, Escrow Agreement for Postponed Exterior Offsite Improvements. Reference: See section 9 of chapter 9. Loan involves use of an attorney in fact Power of attorney meeting the requirements described in section 7 of chapter 9, including written evidence of the veteran’s consent to the specific transaction plus the lender certification found under the “Requirements” heading. [ ]. 10 of 19
  • Veteran intended to sell property on which • A completed VA Form 26-1880, Request for a he/she has an existing VA loan prior to closing Certificate of Eligibility for VA Home Loan on the new VA loan, in order to have Benefits, and entitlement restored • evidence that the veteran has sold the property and either − evidence that the veteran has fully repaid the prior loan, or Note: a HUD-1 settlement statement clearly showing sale of the property by the veteran and pay-off of the prior VA loan satisfies this requirement. − documentation that the veteran can be released from liability and the assumer meets the requirements for substitution of entitlement. Veteran intended to sell property in order to Lender’s certification that the sale of the veteran’s have sufficient income and/or assets to qualify property has been completed and the proceeds for the loan disbursed. Note: The lender’s certification must be based on its examination of a HUD-1 settlement statement or other appropriate documentation of the transaction. Loan is to the unmarried surviving spouse of The following affidavit obtained from the an eligible, deceased veteran surviving spouse at the time of loan closing: “I, ________, being first duly sworn, on oath, say, that, on the __ day of ______, 2___ (insert date loan was closed), I am (was) the unmarried surviving spouse of _________ and that I make this affidavit for the express purpose of inducing _______ to make a loan to me and/or for inducing the Department of Veterans Affairs to guarantee or insure such loan, knowing that it is a criminal offense to make a false statement for this purpose; and that the above and foregoing is true and correct.” _____________ _______________________ Notary’s jurat Signature of surviving spouse Loan is to the spouse of a serviceperson Documentation that, at the time of loan closing, missing in action or prisoner of war the lender asked the applicant and the applicant (MIA/POW) provided verbal assurance that • no official notice of any change in the service member’s status had been received, and • applicant was still the service member’s spouse. Graduated Payment Mortgage (GPM) Veteran’s statement acknowledging payment increases. Reference: See section 6 of chapter 7. Supplemental loan for home improvements See “Procedures” in section 5 of chapter 7. There are restrictions on the purchase or resale Veteran’s written consent to the restrictions of the property the veteran is purchasing (obtained at the time of loan application). Reference: See section 2 of chapter 9. 11 of 19
  • ALLOWABLE CHARGES TO THE VETERAN The veteran can pay a maximum of: • reasonable and customary amounts for any or all of the “Itemized Fees and Charges” designated by VA, plus • a 1 percent flat charge by the lender, plus • reasonable discount points. Note: Some special provisions apply to construction, alteration, improvement and repair loans. Reference: See section 2, subsection e, “Construction Loans.” ITEMIZED FEES & CHARGES: The veteran may pay any or all of the following itemized fees and charges in amounts that are reasonable and customary. Charge Description • The veteran can pay the fee of a VA appraiser and VA compliance inspectors. • The veteran can also pay for a second appraisal if he or she is requesting reconsideration of value. • The veteran cannot pay for an appraisal requested by the lender or seller for reconsideration of value. The veteran cannot pay for appraisals requested by parties other than the veteran or lender. Recording Fees The veteran can pay for recording fees and recording taxes or other charges incident to recordation. Credit Report The veteran can pay for the credit report obtained by the lender. For Automated Underwriting cases, the veteran may pay the evaluation fee of $50 in lieu of the charge for a credit report. For “Refer” cases, the veteran may also pay the charge for a merged credit report, if required. Prepaid Items The veteran can pay that portion of taxes, assessments, and similar items for the current year chargeable to the borrower and the initial deposit for the tax and insurance account. Hazard Insurance The veteran can pay the required hazard insurance premium. This includes flood insurance, if required. 12 of 19
  • Flood Zone Determina- The veteran can pay the actual amount charged for a tion determination of whether a property is in a special flood hazard area, if made by a third party who guarantees the accuracy of the determination. The veteran can pay a charge for a life-of-the-loan flood determination service purchased at the time of loan origination. A fee may not be charged for a flood zone determination made by the lender or a VA appraiser. Survey The veteran can pay a charge for a survey, if required by the lender or veteran. Any charge for a survey in connection with a condominium loan must have the prior approval of VA. Title Examination and The veteran may pay a fee for title examination and title Title Insurance insurance, if any. If the lender decides that an environmental protection lien endorsement to a title policy is needed, the cost of the endorsement may be charged to the veteran. Special Mailing Fees For refinancing loans only, the veteran can pay charges for for Refinancing Loans Federal Express, Express Mail, or a similar service when the saved per diem interest cost to the veteran will exceed the cost of the special handling. VA Funding Fee Unless exempt from the fee, each veteran must pay a funding fee to VA. Mortgage Electronic The veteran may pay a fee for MERS. MERS is a one-time Registration System fee for the purpose of electronically tracking the ownership (MERS) Fee of the beneficial interest in a loan and its servicing rights. Other Fees Authorized Additional fees attributable to local variances may be by VA charged to the veteran only if specifically authorized by VA. The lender may submit a written request to the RLC for approval if the fee is normally paid by the borrower in a particular jurisdiction and considered reasonable and customary in the jurisdiction. Whenever the charge relates to services performed by a third party, the amount paid by the borrower must be limited to the actual charge of that third party. Example: If the lender obtains a credit report at a cost of $30, the lender may only charge the borrower $30 for the credit report. The lender may not charge $35, even if it believes that a $5 handling charge is fair. 13 of 19
  • In addition, the borrower may not pay a duplicate fee for services that have already been paid for by another party. Examples: a. An appraisal is completed on a property and paid for by a prospective purchaser, but the sale is never completed. A second purchaser applies for a loan before the validity period of the Notice of Value (NOV) expires. The lender uses the same NOV. The lender may not charge the second purchaser an appraisal fee if no second appraisal is ordered. b. A survey or flood zone determination, if the lender elects to use an existing survey or flood determination. LENDER’S 1% FLAT CHARGE In addition to the “itemized fees and charges,” the lender may charge the veteran a flat charge not to exceed 1 percent of the loan amount. c. Calculate the 1 percent on the principal amount after adding the funding fee to the loan, if the funding fee is paid from loan proceeds (except IRRRLs). d. Note: For IRRRLs, use VA Form 26-8923, IRRRL Worksheet for the Calculation. The lender’s flat charge is intended to cover all of the lender’s costs and services which are not reimbursable as “itemized fees and charges.” The following list provides examples of items that cannot be charged to the veteran as “itemized fees and charges.” Instead, the lender must cover any cost of these items out of its flat fee. • lender’s appraisals • lender’s inspections, except in construction loan cases • loan closing or settlement fees • document preparation fees • preparing loan papers or conveyancing fees • attorney’s services other than for title work • photographs • interest rate lock-in fees • postage and other mailing charges, stationery, telephone calls, and other overhead • amortization schedules, pass books, and membership or entrance fees • escrow fees or charges • notary fees 14 of 19
  • • commitment fees or marketing fees of any secondary purchaser of the mortgage and preparation and recording of assignment of mortgage to such purchaser • trustee’s fees or charges • loan application or processing fees • fees for preparation of truth-in-lending disclosure statement • fees charged by loan brokers, finders or other third parties whether affiliated with the lender or not, and tax service fees. 15 of 19
  • VA FUNDING FEE TABLES Purchase And Construction Loans Note: The funding fee for ALL subsequent use loans closed on or after October 1, 2006, and before October 1, 2007, is 3.35 percent. This applies to all purchase loans where no downpayment of 5 percent or more is made as well as cash-out refinances where the fee would have been 3.3 percent. Effective October 1, 2007, the subsequent use fee reverts back to 3.3 percent. Type of Veteran Down Payment Percentage Percentage for for First Subsequent Time Use Use Regular Military None 2.15% 3.3% * 5% or more (up to 10%) 1.50% 1.50% 10% or more 1.25% 1.25% Reserves/ None 2.4% 3.3% * National Guard 5% or more (up to 10%) 1.75% 1.75% 10% or more 1.5% 1.5% Cash-Out Refinancing Loans Type of Veteran Percentage for First Percentage for Time Use Subsequent Use Regular Military 2.15% 3.3% * Reserves/National Guard 2.4% 3.3% * *The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home loan. Type of Loan Percentage for Either Type of Veteran Whether First Time or Subsequent Use Interest Rate Reduction Refinancing Loans .50% Manufactured Home Loans (NOT permanently 1.00% affixed) Loan Assumptions .50% 16 of 19
  • Training Broadcasts for Industry Partners and Program Participants FY 2008 Broadcast Schedule - Programs will air at 12:00 Noon Eastern Standard Time (EST) and can be viewed via streaming video on the web (links will be added below on the day of the broadcast) or at VA Regional offices. For more information, contact your Regional Loan Center. December 5, 2007 - The A to Z of the COE and GNMA Update Topics include WebLGY and Certificate of Eligibility procedures, and an update on Ginnie Mae Loan Limits for VA loans. A guest from Ginnie Mae is scheduled to participate. December 7, 2007 - Annual Fee Appraiser Training Our annual update on policies and procedures for members of the Fee Appraiser Panel as well as Staff Appraisal Reviewers and Regional Loan Center Construction and Valuation Staff. January 23, 2008 - Full Reviews of Loan Packages One of your loan files has been selected for Full Review by the Regional Loan Center? This broadcast will cover: • Responding to a request for the Full Review package • Avoiding adverse findings from a Full Review • Using the results of the review for effective training February 13, 2008 – TAP/DTAP Overview An overview of the Loan Guaranty Program, specifically for: • Transition Assistance Program counselors; • Disabled Transition Assistance Program counselors • Veterans Service Officers • Lender Staff and Veterans Topics will include eligibility, procedures, fees and a segment on Specially Adapted Housing grants for severely disabled veterans. March 19, 2008 – LGY IT Systems Overview of the Veterans Information Portal and computer applications 17 of 19
  • March 19, 2008 – LGY IT Systems Overview of the Veterans Information Portal and computer applications for lender personnel, Fee Appraisers, Real Estate Professionals and VA Staff. Topics will include: • The Appraisal System (TAS) • E-appraisal • WebLGY • Automated Certificates of Eligibility (ACE) • The Funding Fee Payment System (FFPS) April 16, 2008 – Why VA? This broadcast will cover the benefits and advantages of using the VA Home Loan Program and impact of the Sub-prime crisis on VA loans. It is intended for Lenders, Real Estate Professionals, Veterans, and VA Employees. May 14, 2008 – Construction and Valuation Update – Manufactured Housing and Coop Housing We will cover VA Rules for manufactured housing and how to distinguish between co-ops, fee simple and leasehold ownership and how to accurately prepare and review appraisal reports for co-ops under VA requirements. Intended audience is VA staff, Lenders, SARs, Fee Appraisers, Real Estate Professionals. July 9, 2008 – VA ReView Our third annual edition of our popular “talk show” format broadcast. This year we will cover: • Becoming an approved agent/broker • Automated Underwriting Systems • Changes to the Lender’s Handbook September 10, 2008 – To be announced 18 of 19
  • Streaming Internet and Videos Loan Guaranty has produced 17 short videos (One hour or less) targeted to provide just-in-time training on specific subjects for Lenders about the VA home loan program. They are available via On-Demand streaming video at http://www.homeloans.va.gov/train.htm Titles are: Home Loans - A Program Overview (1 hour) News & Updates on the VA Home Loan Program (35 min) VA Borrowers: There are Alternatives to Foreclosures (17:50) WebLGY New Generation Replacing ACE & WBLS!* (est. 1 Hour) Guidance on Servicing VA Home Loans During National Disasters (8:27) The Appraisal System (TAS) (12:28) The Certificate of Eligibility (16:00) Restoration of Entitlement (14:52) VA Myth-busters (18:29) Active Duty Issues in Underwriting (26:12) So,You’ve Been Selected for an Audit (19:14) VA Home Loans & You (18:35) VA Income Guidelines (19:52) Refinancing for Lenders (12:31) Energy Efficient Mortgages (7:30) America’s Dream for America’s Veterans (29:00) Special Homes for Special Vets/Specially Adapted Housing (12:00) 19 of 19