New Loan Disclosures and Settlement Statement

By Todd Abelson NMLS #180858 on .

CFPB-LogoAs part of its continuing overhaul of residential mortgage rules, the Consumer Financial Protection Bureau (CFPB) is replacing the long standing HUD-1 Settlement Statement with a new Closing Disclosure. The new version, which goes into effect on August 1, 2015, is designed to provide disclosures to help consumers better understand all of the costs associated with their transaction. A sample of this document, to be provided to consumers three business days before they close on their mortgage loan, is particularly helpful in understanding what the Closing Disclosure will look like upon completion.

Additionally on August 1, 2015, the current Good Faith Estimate and Truth in Lending Disclosures will be replaced by a new Loan Estimate. This form, which will be provided to consumers within three days after they submit a mortgage loan application, is designed to provide disclosures that will help borrowers understand the key features, costs and risks of the mortgage loan for which they are applying. Click to see a sample of the PURCHASE version or the REFINANCE version. Click to see a COMPARISON of the existing forms vs. the forms that will take effect on August 1, 2015.

One of the more helpful & concise guides which is easy to understand is titled Final Rule on Simplified and Improved Mortgage Disclosures, can be found HERE. This 7-page guide, issued on November 20, 2013, provides a broad overview of the upcoming changes. A more detailed guide is the bureau’s TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide found HERE (although more recent, it’s 91 pages long and addresses detailed and complex topics! Not for the faint-of-heart).

Call Todd Abelson at Sunstreet Mortgage, LLC (520) 331-LEND (5363) for all your mortgage needs!

Property flips reverting back to 91-days on Dec 1, 2014

By Todd Abelson NMLS #180858 on .

By Kenneth R. Harney October 17

fha-mortgageCan you still do a short-term house flip using federally insured, low-down-payment mortgage money? That’s an important question for buyers, sellers, investors and realty agents who have taken part in a nationwide wave of renovations and quick resales using Federal Housing Administration-backed loans during the past four years.

The answer is yes: You can still flip and finance short term. But get your rehabs done soon. The federal agency whose policy change in 2010 made tens of thousands of quick flips possible — and helped large numbers of first-time and minority buyers with moderate incomes acquire a home — is about to shut the program down, officials at FHA confirmed to me last week.

In an effort to stimulate repairs and sales in neighborhoods hard hit by the mortgage crisis and recession, the agency waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping — it to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a purchaser using an FHA mortgage — provided you followed guidelines designed to protect consumers from being ripped off with hyperinflated prices and shoddy construction.

Since then, according to FHA estimates, approximately 102,000 homes have been renovated and resold using the waiver. The reason for the upcoming termination: The program has done its job, stimulated billions of dollars’ worth of investments, stabilized prices and provided homes for families who were often newcomers to ownership.

As they say “the devil is in the details” so… call Todd Abelson with Sunstreet Mortgage for all your mortgage needs! (520) 331-LEND (5363)