FINALLY!!! FHA HAS SPOKEN
By Submitted by Theresa Ballard 01/ 4/2010
HUD has finally issued a Mortgagee Letter (ML 2009-53) stating that FHA will no longer limit the origination fee to 1% of the mortgage amount on standard FHA loans. There was no change to the statutory origination caps for HECM and 203K Rehab loans.
In the Mortgagee Letter, FHA reminds Lenders that the sum of all fees and charges from origination - related services must be included in Box 1 on Page 2 of the GFE.
FHA goes on to say that although the 1% cap has been lifted, "FHA expects that lenders will continue to charge fair and reasonable fees for all origination services and the agency will continue to ensure that FHA borrowers are not overcharged."
What does this mean? FHA will be watching and if they see that fees are getting out of hand, they "have the authority toset limits on the amount of any fees that mortgagees charge borrowers for obtaining an FHA loan.."
The Mortgagee Letter goes on to state that all copies of GFEs issued must be included in the Case Binder when the loan is submitted to FHA for Endorsement. Copies of the GFEs are to be included with all Test Case files as well. Trust me, this is how they will be keeping an eye on the Origination fees being quoted.
So what does that mean....
1. Keep an eye on your origination fees
2. Make sure you have a reason for any revised GFEs done
3. Keep copies of all GFEs
4. Don't forget to document why you have a revised GFE
(Changed Circumstance)
The Mortgagee Letter also talks about Seller Credits and how the fee will be shown on the HUD-1.
The link below will take you directly to the Mortgagee Letter. Now let's work on VA!!
ML 2009-53
Submitted by Theresa Ballard
Theresa Ballard is the CEO of BFO Solutions. BFO provides clients with the following services among others: Quality Control Review, Due Diligence, Compliance Training. You can reach Theresa at 619-397-2603 or at tballard@bfosolutions.com
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