Mortgage Forbearance: Guidelines for Homeowners - NerdWallet

Mortgage Forbearance: Guidelines for Homeowners - NerdWallet




FORBEARANCES AGAIN

I am still getting a lot of questions in regard to forbearances so I am going to repeat and update some information.

• Who Qualifies for Forbearances? Anyone suffering financial hardship b/c of the COVID-19 crisis. Some servicers will take the borrower’s word but many will request “proof” of some sort. Borrowers who are not in financial peril should be careful about claiming they are, as they risk fraud charges.
• How Do I Obtain a Forbearance? Borrowers need to contact their servicer and apply for it. They should not simply stop making payments.
• Do I Have to Pay Back Missed Payments? Yes – without a doubt. Some servicers will want all of the missed payments repaid as soon as the forbearance ends; some will want to restructure entire loans; and some will want to set up repayment over a period of months. Servicers will most likely try to work out the repayment system when borrowers apply for forbearances.
• Does It Matter What Type of Mortgage I Have? Yes. Forbearances will be easier to obtain for conforming (Fannie/Freddie), FHA and VA loans. Jumbo and non-QM borrowers, however, will have a more difficult time obtaining forbearances b/c the government does not have as much influence over those channels.
• How Will a Forbearance Affect My Credit? If borrowers obtain a formal approval for a forbearance, it should not affect their credit. If borrowers just stop making payments, however, without getting an approval from their servicer, it will likely impact their credit – severely. There is a caveat here too: while credit reports will not show late payments when borrowers get their forbearances approved, future lenders will be able to see if a borrower obtained a forbearance in many cases, and that could affect credit decisions. This is something we saw with loan modifications after the 2008 crisis.
• Should I Go Through With My Purchase or Refinance If I Am Likely to Seek a Forbearance? Absolutely not. Not only will it be extremely difficult for borrowers to obtain a formal forbearance approval for a recently funded loan, missing payments on newly funded loans put the originating lender in extreme financial peril.

Here is a short article from Nerd Wallet with additional

info.https://www.bankrate.com/mortgages/everything-you-should-know-about-mortgage-forbearance/

Kentucky FHA Home buyers with heavy debt might find it tougher to get a mortgage with FHA in 2019

Homebuyers with heavy debt might find it tougher to get a mortgage:

Here’s what’s happening: For several years, FHA has insured loans to buyers who previously would have been considered too risky or marginal at best. Those applicants often carried crushing monthly personal debts — for credit cards, auto loans, student loans and other obligations — totaling more than half of their monthly incomes. Many also had histories of credit problems that lowered their credit scores. Combined with skimpy down payments of 3.5 percent and minimal bank reserves, these borrowers have a high statistical probability of defaulting on their loans.

To prevent big losses to FHA’s insurance fund, the agency recently informed lenders nationwide that from March 18 onward, it would be applying more stringent standards to applications from high-risk home-buyers. In its letter, FHA documented its reasons for the crackdown. According to FHA Commissioner Brian Montgomery, the agency has been seeing disturbing trends in the quality of loans lenders have been delivering to it:

— Nearly one of every four approved home purchasers had a debt-to-income (DTI) ratio exceeding 50 percent, the worst since 2000. In January, 28 percent of buyers were in that category.

— FICO credit scores are tanking. They’ve fallen to the lowest level since 2008 — an industry-low average of 670. In the first quarter of fiscal 2019, more than 28 percent of all new purchase loans had FICOs below 640. In the same quarter, more than 13 percent of new loans had scores under 620 — 19 percent higher than the same period in the previous fiscal year. (FICO scores range from 300 to 850; low scores predict higher risks of nonpayment. Average scores for purchasers at giant mortgage investors Fannie Mae and Freddie Mac average around 750.)

— Borrowers are siphoning equity from their homes at an alarming rate. In fiscal 2018, FHA saw a 60 percent increase in “cash-out” refinancing as a percentage of all refinancings. Cash-outs allow borrowers to convert equity into spendable money.

— Growing numbers of loans have multiple indications of serious future risk of nonpayment — combinations of low credit scores of 640 or less and DTI ratios that exceed 50 percent.

Given these omens, FHA clamped down by amending its automated underwriting system. Lenders must now conduct time-consuming “manual” analysis of every new loan application flagged as high risk. Compared with standard automated underwriting, manual processing is far more intensive and entails higher staffing costs and liabilities for lenders. Many balk at it. Some investors refuse to buy manually underwritten loans. As a result, fewer of them make it through the process.

“Absolutely they’re going to turn a lot of loans down,” said Skeens. Joe Metzler, a loan officer at Mortgages Unlimited in St. Paul, Minnesota, welcomes the stricter standards. “FHA has become the dumping ground for crappy [loan] files with ridiculous DTI allowances and bad scores,” he said. “A lot of it lately has been straight-up subprime. We should not be doing them.”

According to FHA, nearly 83 percent of its home-purchase loans in January went to first-time buyers. Just under 40 percent went to minorities. Those who have the weakest financial profiles — FICO scores under 640 with debt ratios above 50 percent — could be shocked when they go to buy a house this spring. They may have to turn to subprime lenders who charge much higher interest rates, or they may have to simply postpone their purchase until they’re in better financial shape.

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

 

Text/call 502-905-3708
kentuckyloan@gmail.com

 

 

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

-- 

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Kentucky FHA Mortgage Guidelines for a Kentucky First Time Home Buyer

HUD Streamline Your Louisville Kentucky FHA Mortgage

HUD Streamline Your Louisville Kentucky FHA Mortgage

HUD   >   Program Offices   >   Housing   >   Single Family   >   Buying   >   HUD Streamline Your FHA Mortgage

Streamline Your FHA Louisville KY Mortgage FHA has permitted streamline refinances on insured mortgages since the early 1980s. “Streamline refinance” refers only to the amount of documentation and underwriting that the lender must perform, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:   The mortgage to be refinanced must already be FHA insured.   The mortgage to be refinanced should be current (not delinquent).   The refinance results in a lowering of the borrower's monthly principal and interest payments, or, under certain circumstances, the conversion of an adjustable rate mortgage (ARM) to a fixed-rate mortgage.   No cash may be taken out on mortgages refinanced using the streamline refinance process. Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction. FHA does not allow lenders to include closing costs in the new mortgage amount of a streamline refinance. Investment properties (properties which the borrower does not occupy as his or her principal residence) may only be refinanced without an appraisal.  Detailed instructions to the lenders are contained in HUD Handbook 4155.1.6.C. Contact your lender to get started. You can find your lenders contact information by clicking on ourList of approved lenders.

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KENTUCKY FANNIE MAE CONVENTIONAL LOAN MINIMUM BORROWER CONTRIBUTIONS CHANGES

KENTUCKY FANNIE MAE CONVENTIONAL LOAN MINIMUM BORROWER CONTRIBUTIONS CHANGES FOR 2019 

Fannie Mae New Loan Limits for Kentucky in 2019 Fannie mae has just announced an increase to Kentucky's County Loan Limits for 2019. Effective Thursday November 29th, Fusion will be updated to allow Kentucky Conventional loans to be locked using the 2019 Loan Limits. The new loan limits are listed below. Individual County Loan Limits for 2019 can be found on Kentucky Fannie Mae Conventional  Loan Limit Look-Up Table HERE.

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

 

Text/call 502-905-3708
kentuckyloan@gmail.com

 

 

If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

Fill out my form!