MI Premium Increase for FHA Case Numbers assigned after April 17, 2011
More than one Buyer/Borrower got burned on April 17th, the last day one could get an FHA Case Number assigned to the loan application in order to lock an FHA loan at the old MIP rate of .90% instead of the current 1.15% MIP.
The last day to get that all-important FHA Case Number was Monday, April 17th. (This was not the last day to lock the FHA loan.) So the question was, "What did I need as a lender from your buyer in order to get the FHA case number?"
HUD Handbook 4155.2 1.A.2
Things are changing very fast right now in the mortgage industry, and the changes don't ever seem to be in the borrower's favor. When in doubt, ask your lender to document what he or she is telling you.
We distributed this reminder from HUD: "Mortgagees are reminded that they must request case numbers only when they have an active loan application for the subject borrower and property in accordance with HUD Handbook 4155.21.A.2... Starting with Case Numbers assigned on 4/18, a certification will be required that this is a live deal.
What Is A Live Deal? You need a PENCIL
How can a REALTOR know if the buyer's transaction is a Live Deal? We use the acronym PENCIL to make sure we have a "live deal."
Property (signed contract by all parties)
Name of Borrower
FHA used to allow lenders to order a Case Number with just the borrower's Name, Social Security number, and address. That's not the case any more. The new RESPA definition of what constitutes a Loan Application has changed that, since you can't have an application without a property. (TBD is not an address... LOL)
Takeaway for REALTORS
Your obligation to look out for your client's best interest means that you need more than a passing knowledge of changes in lending rules.
Use the SEARCH function in Active Rain to see what lenders are saying about particular rule changes, and don't be shy about asking your favorite lender to send you documentation in advance about upcoming changes.
After all, your lender won't make a living without good REALTOR relationships, and your deals won't close if your lender hasn't done his/her homework.
Takeaway for Lenders
The old model of the LO finding the deal and the processor making it work is dead and gone. We have to be knowledgeable and then communicate that knowledge to our borrowers and REALTOR partners.
I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender.
SUNSTREET MORTGAGE LLC ~ Correspondent Mortgage Bank
Offices in Mesa, Tucson, Sierra Vista & Nogales