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Fannie Mae Home Path Renovation Loans
 

Fannie Mae Home Path Renovation Loans

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Outline of Fannie Mae HomePath Renovation Loan Process. Feel free to share with your buyers. Call me with any questions.

Outline of Fannie Mae HomePath Renovation Loan Process. Feel free to share with your buyers. Call me with any questions.

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    Fannie Mae Home Path Renovation Loans Fannie Mae Home Path Renovation Loans Presentation Transcript

    • HomePath® FinancingThe information contained herein represents confidential and proprietary information of Prospect Mortgage, LLC – Primary Series, including all information related to the REO BOSS™open house marketing and lead generation system. Any disclosure, copy, reproduction, or download is strictly prohibited.REO BOSS™ is a trademark of Prospect Mortgage, LLC – Primary Series.The Home Buyers Scouting Report® (HBSR) is a free home finding service provided directly to homebuyers by Home Buyers Marketing II, Inc., a licensed real estate brokerage servicescompany. The Preferred Real Estate Agent and Home Buyers Marketing II, Inc. (HBM Il) are cooperating, licensed real estate professionals. The Preferred Loan Officer’s role is to assistin determining a comfortable home price range for Home Buyers Marketing II, Inc. (HBM II) to use when it is searching for properties within the homebuyer’s search criteria.Home Buyers Scouting Report®, HBSR®, and Contact Conversion® are registered trademarks of Home Buyer Marketing II, Inc. or Affiliated Companies. Equal Housing Lender. Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC is a Delaware limited liability company licensed by the CA Dept. of Corps. under CRMLA and operates with the following licenses: AZ Mortgage Banker License #BK0903027, #BK0909362, #BK0908046, #BK0908050, #BK0908056, BK#0908057, #BK0908058, #BK0908731, BK#0903112, BK#0903912, BK#0906650, BK#0906913; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA Mortgage Lender/Broker License #MC2011; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932415; Operates as Metrocities Mortgage, LLC in NY (Licensed Mortgage Banker‫ر‬NYS Banking Department); Operates as Metrocities Mortgage, LLC in OH (Ohio Mortgage Broker Act, Lic # MB.803629.000); OR Mortgage Lender Licensee #ML-2006; PA Dept. of Banking license #1740; RI Licensed Lender #20021343LL, Broker #20041643LB; licensed by the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under MN law‭ ‭ r any other applicable law‭ – 0509-63‭0 HomePath® Financing Overview ,o . Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath®…What’s In It for Me?  Fannie Mae HomePath® loans provide you with a broader pool of potential buyers − Fannie Mae HomePath® guidelines allow for easier underwriting and a faster closing − Properties require no Appraisal or Mortgage Insurance − Selling Agents can have more successful closed sales − Listing Agents have greater success in closing a property with a HomePath® Mortgage versus other financing options  More closed sales = More Commissions ($$$ in your pocket)Prospect Mortgage is the largest Retail Lender of HomePath® Financing in the Nation1 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: Prospect Mortgage Prospect Mortgage is the Nation’s Largest Independent Residential Retail Lender − 9th largest Lender in the nation − 2nd largest 203K Lender in the nation − 7th largest in FHA loan origination nationwide, according to Mortgage Data Web. − 12th largest in total purchase loan origination nationwide, according to Mortgage Data Web • Purchase volume accounts for 62.7% of our total applications, reflecting our deep legacy and strong relationship with real estate agents. Largest Retail Lender of Fannie Mae HomePath® Financing in the Nation − There are two types of HomePath® Loans: 1. Normal Fannie Mae HomePath® Loan 2. Fannie Mae HomePath® Renovation Loan - Prospect Mortgage does not provide financing for the HomePath® Renovation Loan at this time2 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: Fannie Mae HomePath® Fannie Mae has over 100,000 real estate owned (REO) properties currently on their books There is a need to find buyers for these properties and lenders to provide financing to assist in stimulating the economy Fannie Mae owned properties eligible for the Fannie Mae HomePath® Mortgage offer affordable housing opportunities with up to 97% financing Only 10% down on 1 unit investment properties Note: Fannie Mae identifies properties eligible for the HomePath® financing on the HomePath® web site. Prospect Mortgage is only offering the HomePath® Mortgage program – not the HomePath® Renovation Mortgage3 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: Indentifying HomePath® Properties Eligible HomePath® Mortgage Financing This identifies that the HomePath Property is eligible for either a HomePath Mortgage OR a HomePath Renovation Mortgage HomePath® Renovation Mortgage Financing This identifies that the HomePath Property is eligible for a HomePath Renovation Mortgage ONLY! (Not offered by Prospect Mortgage at this time)4 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath® Financing Special Offers HomePath® Buyer Incentive – Fannie Mae is currently offering buyers up to 3.5% in closing cost assistance through June 30, 2011 – The HomePath property buyer must meet the following qualifications to be eligible:  Buyers and/or Selling Agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible  The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive  The sale must close on or before June 30, 2011. No exceptions will be made to this deadline  Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive  Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum  If a buyers total closing costs are under 3.5%, the difference will not be available as a credit to the buyer 5 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath® Financing Special Offers (continued) HomePath® Selling Agent Incentive – Fannie Mae Offering Selling Agent Bonus through June 30, 2011:  Selling Agents, representing clients who affirm they will become owner occupants of a primary residence purchasing a HomePath property, may receive a bonus of $500 in Arizona and Texas OR $1,000 in California and Washington – Selling Agent bonus must be requested in the initial offer in order to be eligible – No bonus will be given for second homes or investment properties. – No bonus will be given on any property not located in AZ, TX, CA, or WA.  Retail and public entities are eligible for the incentive; however pool and auction sales are not eligible.  The incentive may not be available for a property where Fannie Mae acquired the property in connection with financing under a reverse mortgage. Ask the listing agent for details  Fannie Mae reserves the right to remove any property from promotion or end the promotion at any time. Any dispute over the payment of the incentive shall be resolved by Fannie Mae in its sole discretion. Note: Fannie Mae can give no assurance on the time required to close, but initial Offers submitted after May 15, 2011 are particularly questionable for closing by the incentive deadline of June 30, 2011. 6 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: Fannie Mae HomePath® Update For HomePath® Mortgages only: − Even though an appraisal is not obtained by the lender for HomePath® Mortgages, a market-rent schedule from an appraiser is acceptable for determining rent for qualifying purposes in accordance with standard policy For both the HomePath® Mortgage and HomePath® Renovation Mortgage, we will: − Waive the investor property loan-level price adjustments for investor purchase transactions that have both an LTV ratio of 70 percent or lower and a credit score of 740 or higher Enhancements are effective for loans delivered on or after February 1, 2011.7 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: Fannie Mae HomePath® Update (continued)  HomePath® Financing Changes Impact Desktop Underwriter® (DU®). We will no longer label high-LTV or high-CLTV ratio transactions as "Flexible Mortgages." DU will be updated to remove all references to Flexible Mortgages and will permit the following transactions up to a 97 percent LTV/CLTV/HCLTV ratio under standard eligibility: − One-unit – Fully amortizing fixed-rate and all standard ARM products − Principal residence – Transactions with non-occupant borrowers as parties − Purchase  The following transactions will be excluded from the standard 97 percent LTV/CLTV/HCLTV ratio eligibility: − High-balance mortgage loans – Interest-only loans − HomeStyle® Renovation mortgages – Manufactured homes − Loan purpose of construction – Co-op properties Enhancements are effective for loans delivered on or after February 1, 2011.8 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath® Program Highlights The Fannie Mae HomePath® Mortgage features: − Up to 97% financing for owner occupied properties − Up to 90% financing for investment properties − Purchase transactions only − No MI required – pricing‭adjustments‭in‭lieu‭of‭MI‭will‭apply‭to‭LTV’s‭greater‭ than 80% − No appraisal is required – we will use sale price as the appraisal value − Prospect Mortgage cannot order, see or receive an appraisal. Borrowers will be required to sign an appraisal disclosure form at application − Fixed Rates, ARM options are available (I/O not available) − Allows for a Loan score of 660 with 80% LTV or greater. For loans with less than 80% LTV, follow standard guidelines. − High Balance transactions are allowed. Check with your Loan Officer about the specifics of this program. − The more restrictive policy applies when combining Fannie Mae HomePath® with other programs. − Non-traditional credit is not allowed9 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath® Program Benefits (continued) Program can be used for Owner occupied, Second Home and Investment properties − Down payment (at least 3%) can be funded by borrowers own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer. DAPs (Down Payment Assistance Programs) and subordinate financing are not allowed as a source of down payment for LTV’s‭over‭95%‭at‭this‭time. − A‭5%‭minimum‭borrower‭down‭payment‭is‭required‭for‭LTV’s‭from‭80.01‭to‭ 95%. − There are No appraisal fees. Collection of itemized Credit Report Fees only, has been approved10 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Overview: HomePath® Program Benefits (continued) First Look™ for Fannie Mae Homes − Fannie Maes First Look period contributes to neighborhood stabilization by encouraging home ownership. During this period, owner occupants, public entities, and their partners can submit offers and purchase properties without competition from investor offers. This gives Buyers buying their home‭as‭a‭“primary‭residence”‭a‭“first‭look”‭at‭Fannie‭Mae‭homes. − The First Look period is typically the first 15 days a property is listed on HomePath.com. Properties within‭the‭First‭Look‭period‭now‭include‭a‭“countdown‭clock”‭on‭the‭property‭details‭page,‭which‭ displays the number of days remaining for owner occupants and public entities to submit offers. − If the property remains available for sale after the expiration of the First Look period, investor offers may be submitted and will be considered along with all other offers. Sample of a Listing Showing11 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Eligible Products  The following Conventional Conforming products are eligible for this program: − 30 year fixed − 15 year fixed − LIBOR 5/1 ARM12 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Pricing Adjustments The following pricing adjustments apply to all lenders and are mandated by Fannie Mae for the Fannie Mae HomePath® Mortgage: − Loan‭level‭price‭adjustments‭in‭lieu‭of‭MI‭for‭LTV’s‭>‭than‭80% − Loan‭level‭price‭adjustments‭specific‭to‭LTV’s‭>‭95% − Loan level price adjustments for Investment properties − Other standard conforming adjustments apply in addition to the above except‭for‭investment‭which‭are‭in‭“replacement”‭of‭our‭standard‭investment‭ property adjusters − HomePath® Mortgage pricing adjustments will be listed at the bottom of the HomePath® Rate Sheet. Note: Especially‭for‭high‭LTV’s‭/‭higher‭risk‭transactions‭– with pricing adjustments in lieu of MI – the overall pricing under this program may not be favorable and could cause a transaction to be high cost as well. As always, compare the HomePath® Mortgage to other options (FHA, VA, standard conforming) in order to assist the customer in determining the best option for them. If at all possible do a Fannie Mae HomePath Mortgage.13 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Additional Program Information Appraisals or property inspections are NOT to be ordered or reviewed by the Lender − Borrowers should not be discouraged from obtaining an appraisal or a property inspection for their own benefit but it is for their information, only − The Borrower or lender cannot use the appraisal they paid for on their own if they end up switching to a non- HomePath® loan If the loan does NOT qualify for the Fannie Mae HomePath® Mortgage, the loan may qualify under other program parameters − Appraisal impacts must be communicated to the customer. i.e., fees, issues getting water turned on etc. when this occurs. The appraisal fee disclosure must comply with RESPA guidelines Fannie Mae as a seller may require copy of the credit report or prequalification / preapproval letter − The borrower is responsible to obtain and provide if required by Fannie Mae We cannot provide a copy of the credit report to the borrower Fannie Mae will pay up to 6% in seller concessions on owner occupied HomePath Properties – Asking for closing costs in the initial offer is recommended – All that can happen is that they are accepted, reduced or not accepted14 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Versus Alternative FinancingHomePath® Financing – Alternative Financing –Getting Buyers into Homes! Creating Issues Where the Loan Will Not Close! Key benefits of a HomePath® Loan:  Detriments Using Alternative Financing: - Only 3% down required on a primary residence - Greater down payment required with seller property and up to 6% in seller concessions concessions based on loan program on owner occupied properties guidelines - Mortgage terms based on loan program and - Flexible mortgage terms (Fixed-rate, ARM or availability Interest-Only) - Credit eligibility based on loan program - Buyers qualify with less than perfect credit - Down payment (min. 3%) can be funded by - Down payment sources are based on loan your own savings; a gift, grant or loan from a program and underwriting guidelines nonprofit organization, state or local government or employer - No mortgage insurance required** - Mortgage insurance required - No property appraisal required - Appraisal required - Only 10% down on 1 unit investment - Greater than 20% down on 1 unit investment properties properties - Allows investors to finance up to 10 properties - Limit on the amount of properties that can be - Investors with more than 10 properties will now financed be considered on a “case by case basis” 15 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Versus Alternative FinancingKey benefits of a HomePath® Loan: Detriments Using Alternative Financing: Minimal Condominium requirements  Condominium requirements - HOA Certification required – subject to Owner - HOA Certification not required Occupancy ratios, delinquent dues ratios and FNMA project standards - $1 million Liability Insurance coverage - Insurance to meet program guidelines required - HO6 coverage (20% of purchase price) – - Master Policy/Binder must state verbiage, - CC&R’s, Bylaws and Articles of Incorporation "Walls‐In" or HO6 coverage will be required requirements - Master Policy Hazard Coverage to include - Insurance to meet program guidelines 100% replacement cost - Fidelity Bond – 21 units or more - Fidelity Bond requirements - Insurance to meet program guidelines - Flood insurance (if in a flood zone) - HomePath listing or REO ID required - Subject to FNMA guidelines, pending litigation, commercial space requirements & - Full review is not required HOA Budgeted Reserve Requirement16 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Automatic Notifications Sign up for the “Automatic Notifications” on the HomePath website for the zip codes in your geographic market at http://www.homepath.com − It will get provide you with new listings and price reductions the moment they are activated − Very useful information to connect with Fannie Mae HomePath Listing Agents.17 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Marketing MaterialsHere are instructions for Listing Agents on how to get information from Storefront.Loan Officers should pass on this information in an effort to work more closely Realtors. 18 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Fannie Mae HomePath®: Appendix Appendix19 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Appendix: HomePath® Credit Policy Parameters Credit Policy Parameters – HomePath® Property Type LTV TLTV CLTV LTV TLTV CLTV Primary Fully Amortizing Interest-Only 1 unit 97 97 97 80 95 95 2 unit 80 80 80 N/A N/A N/A 3 – 4 unit 75 75 75 N/A N/A N/A Second Home 90 90 90 80 90 90Investment Property 1 unit 90 90 90 N/A N/A N/A 2 unit 80 80 80 N/A N/A N/A 3 – 4 unit 75 75 75 N/A N/A N/A Co-op and Manufactured Housing is NOT available20 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Appendix: HomePath® Property Types Property TypesProperty Type Primary Second/Vacation InvestmentSingle-family – detached or attached X X X2 units X N/A X3 units X N/A X4 units X N/A XLow-rise condo X X XHigh-rise condo X X XPUD X X XCooperatives (allowed in New York) N/A N/A N/ACondotels N/A N/A N/AManufactured Housing N/A N/A N/AFactory Built Housing (Modular) X X X21 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series
    • Appendix: Fannie Mae HomePath® Marketing Collateral  HomePath® Marketing - Provides HomePath® Flyers to assist in your marketing efforts - Increased Property exposure - Increase loan closings with more qualified HomePath® Buyers - Sells faster because of greater exposure - Property can potentially sell at a higher net price22 HomePath® Financing Overview Copyright © 2011 Prospect Mortgage, LLC – Primary Series