DU for Government Loans Release Notes July 2012 Release

Transcription

DU for Government Loans Release Notes
July 2012 Release
May 15, 2012
Updated June 26, 2012
During the weekend of July 21, 2012, Desktop Underwriter® (DU®) for government loans
will be updated with the following items for VA and FHA loan casefile submissions:
 VA Bankruptcy and Foreclosure Messaging
 HUD Mortgagee Letter 2012-03 – Miscellaneous Underwriting Issues
 HUD Mortgagee Letter 2012-10 – Miscellaneous Underwriting Issues…
 FHA Reserves Calculation on 3 to 4 Unit Properties
 FHA TOTAL Mortgage Scorecard Version 3.0
NOTE:
For ease of reference, this document generally uses the term “DU” to refer to “DU for government
loans.”
Table of Contents
VA Bankruptcy and Foreclosure Messaging ....................................................................................2
HUD Mortgagee Letter 2012-03 – Miscellaneous Underwriting Issues ..........................................2
Income Documentation for Self Employed Borrowers .......................................................................2
Handling of Disputed Accounts .........................................................................................................2
FHA Reserves Calculation on 3 to 4 Unit Properties .......................................................................3
FHA TOTAL Mortgage Scorecard Version 3.0 ..................................................................................3
Borrower Paid Closing Costs.............................................................................................................3
Current Housing Expenses................................................................................................................4
Gift Letter Source and Gift Letter Amount .........................................................................................4
Required Investment .........................................................................................................................5
Total Closing Costs ...........................................................................................................................6
Total Fixed Payment .........................................................................................................................7
Seller Concession .............................................................................................................................8
Down Payment ..................................................................................................................................9
Condominium Indicator ...................................................................................................................10
Property County Code and County Loan Limits ..............................................................................11
Review Rules ..................................................................................................................................12
Error Messaging ..............................................................................................................................12
Additional Resources .......................................................................................................................15
For More Information ............................................................................................................... 16
© 2012 Fannie Mae. Trademarks of Fannie Mae.
6.26.2012
1
VA Bankruptcy and Foreclosure Messaging
The text of the messages that are issued when DU detects a bankruptcy or foreclosure in the credit report data
will be updated in this release; however, the logic for the messages will remain unchanged. The updated text
for the bankruptcy message is as follows:
This loan casefile has been referred due to the presence of a bankruptcy on the credit report which
appears to have occurred within the last 2 years. The lender must review the credit report and
bankruptcy documentation to verify that the loan meets VA requirements.
The updated text for the foreclosure message is as follows:
This loan casefile has been referred due to the presence of a foreclosure on the credit report which
appears to have occurred within the last 2 years. The lender must review the credit report and
foreclosure documentation to verify that the loan meets VA requirements.
HUD Mortgagee Letter 2012-03 – Miscellaneous Underwriting Issues
This Mortgagee Letter (ML) was issued by HUD on February 28, 2012, and is effective for all FHA Agency
Case Numbers assigned on or after April 1, 2012. The messages in DU will be updated for this ML with this
release. DU is unable to determine the date of the FHA Agency Case Number assignment. Submissions
made prior to the weekend of July 21 will receive the old messaging; loan casefiles submitted after the
weekend of July 21 will receive the updated messaging outlined in these release notes. Lenders are
responsible for ensuring the correct documentation and guidelines are applied based on the date of the FHA
Agency Case Number assignment.
Income Documentation for Self Employed Borrowers
Prior to the issuance of this ML, the documentation requirements for year-to-date (YTD) profit & loss (P&L)
statements and balance sheets varied based on whether the loan casefile submission received an Approve or
Refer recommendation. With this ML, HUD updated its documentation requirements to be the same for all
recommendations. DU will be updated with this release to issue the following message on both Approve and
Refer recommendations:
<Borrower’s Name> is self-employed. Profit and Loss (P&L) Statements and Balance Sheets are
required if more than one calendar quarter has elapsed since the filing date of the most recent tax
return. Additionally, if income used to qualify the borrower exceeds that of the two-year average based
on tax returns, an audited P&L statement or signed quarterly tax returns obtained from the IRS are
required to support the greater income stream.
Handling of Disputed Accounts
The guidance on handling disputed accounts, which is outlined in ML 2012-03, was rescinded with ML 201210. Therefore, the disputed account message in DU will not be updated in this release.
The text of the disputed account message in DU also will be updated in this release as follows:
If the credit report reveals that the borrower is disputing any tradelines (accounts or collections), the
mortgage loan application must be referred to a DE underwriter for review and the file must be
documented according to current FHA guidelines, unless the following two conditions have been met:
1) the total outstanding balance of all disputed tradelines (accounts and collections) is less than $1000;
and 2) the disputed tradelines (accounts and collections) are aged at least two years from date of last
activity as indicated in the credit report.
6.26.2012
2
FHA Reserves Calculation on 3 to 4 Unit Properties
Section 2.B.4.d of HUD Handbook 4155.1 specifies that gift funds cannot be counted towards reserves on 3 to
4 unit properties. DU will be updated in this release to no longer include any gift funds entered in the Assets
section of the loan application in the reserves listed in the Underwriting Analysis section of the DU Underwriting
Findings Report on 3 to 4 unit properties. Also, DU will no longer include gift funds entered in the Assets
section in the Reserves data element sent to the FHA TOTAL Mortgage Scorecard on 3 to 4 unit properties.
NOTE:
The gift funds amount should be entered in both the Source of Downpayment and Assets sections of
the loan application to ensure calculations are performed correctly by DU, and correct information is sent to the
FHA TOTAL Mortgage Scorecard.
FHA TOTAL Mortgage Scorecard Version 3.0
Certain data elements that are currently optional will become required data element inputs to the FHA TOTAL
Mortgage Scorecard the weekend of July 21. These data elements are outlined in the FHA TOTAL Mortgage
Scorecard AUS Developer’s Guide, Version 3.0, and also in these release notes. Since DU is using existing
data elements within its Residential Loan Data (RLD) Format 1003 Version 3.2 and MISMO Automated
Underwriting Specification (AUS) Version 2.3.1 file formats to populate these data elements on submissions to
the FHA TOTAL Mortgage Scorecard, no changes are needed to customers’ systems with this release.
Borrower Paid Closing Costs
This data element is defined by HUD as the resulting amount of line f. Estimated Closing Costs minus the
amount from line k. Closing Costs Paid by Seller from the Details of Transaction screen (shown below). This
information is currently being collected in the Residential Loan Data (RLD) Format 1003 Version 3.2 and
MISMO Automated Underwriting Specification (AUS) Version 2.3.1 file formats. Please note, DU currently
performs the calculation to send this data element to the FHA TOTAL Mortgage Scorecard and will continue to
do so.
6.26.2012
3
Current Housing Expenses
This data element is defined by HUD as the sum of the borrowers’ current monthly housing expenses such as
rent or mortgage payments, insurance, taxes, etc. This data is generally taken from the Combined Monthly
Housing Expense section of the Income and Housing screen (shown below). This information is currently
being collected in the Residential Loan Data (RLD) Format 1003 Version 3.2 and MISMO Automated
Underwriting Specification (AUS) Version 2.3.1 file formats. Please note, DU currently performs the calculation
to send this data element to the FHA TOTAL Mortgage Scorecard and will continue to do so.
Gift Letter Source and Gift Letter Amount
DU was updated in September 2009 along with the Residential Loan Data (RLD) Format 1003 Version 3.2 and
MISMO Automated Underwriting Specification (AUS) Version 2.3.1 file formats to be able to collect the FHA
Gift Letter Source and Gift Letter Amount. This information is entered in the Types, Terms and Property
screen (shown below). DU currently sends this to the FHA TOTAL Mortgage Scorecard and will continue to do
so.
6.26.2012
4
The FHA TOTAL Mortgage Scorecard is currently able to receive only one Gift Source and Gift Amount per
submission. Because it is possible to enter multiple Gift Sources in the available Source of Downpayment
fields, DU will send the Gift Letter Source to the FHA TOTAL Mortgage Scorecard that corresponds with the
highest Gift Letter Amount entered. If multiple Gift Letter Sources have the same dollar amount, DU will apply
the hierarchy detailed below to determine which Gift Source to send to the FHA TOTAL Mortgage Scorecard:
1.
2.
3.
4.
5.
6.
Nonprofit/Religious/Community - Seller Funded
Nonprofit/Religious/Community - Non-Seller Funded
Relative
Employer
Government Assistance
N/A (includes “Gift Funds” option)
In a scenario where multiple Gift Sources are entered, but some do not have a corresponding dollar amount
entered, only the Gift Sources with a dollar amount greater than $0 will be used in determining which Gift
Source will be sent to the FHA TOTAL Mortgage Scorecard. DU will total the dollar amounts for all Gift
Sources (including Seller Funded gifts) and provide this amount (rounded up to the nearest whole dollar) to the
FHA TOTAL Mortgage Scorecard as the Gift Letter Amount.
The “Gift Funds” option will still be available in the Source of Downpayment field. If this option is selected, DU
will send a Gift Source of “N/A” to the FHA TOTAL Mortgage Scorecard. The Gift Source of N/A will also be
provided to the FHA TOTAL Mortgage Scorecard when no other Gift Source with a corresponding dollar
amount greater than $0 is entered in the loan application.
Required Investment
This data element is defined by HUD as the amount from line p. Cash From/To Borrower from the Details of
Transaction screen (shown below). DU calculates this amount based on existing fields in the Residential Loan
Data (RLD) Format 1003 Version 3.2 and MISMO Automated Underwriting Specification (AUS) Version 2.3.1.
DU does not currently send this data element to the FHA TOTAL Mortgage Scorecard, but will do so starting
with this release.
6.26.2012
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Total Closing Costs
This data element is defined by HUD as line f. Estimated Closing Costs from the Details of Transaction (shown
below). This information is currently collected in an existing field in the Residential Loan Data (RLD) Format
1003 Version 3.2 and MISMO Automated Underwriting Specification (AUS) Version 2.3.1. Please note, DU
currently sends this data element to the FHA TOTAL Mortgage Scorecard and will continue to do so.
6.26.2012
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Total Fixed Payment
This data element is defined by HUD as the sum of the borrowers’ total fixed monthly expenses such as the
mortgage payment, insurance, taxes, fees, and other recurring charges, including all monthly payment debts
and housing debts. DU calculates this amount based on existing fields in the Residential Loan Data (RLD)
Format 1003 Version 3.2 and MISMO Automated Underwriting Specification (AUS) Version 2.3.1. Please
note, DU currently sends this data element to the FHA TOTAL Mortgage Scorecard and will continue to do so.
The amount sent to the FHA TOTAL Mortgage Scorecard for this data element should align with the Total
Expense Payment shown in the Underwriting Analysis Report section of the DU Underwriting Findings.
6.26.2012
7
Seller Concession
This data element is defined by HUD as the amount the seller and/or interested third party contributes toward
the buyer’s closing costs, prepaid expenses, discount points, Upfront Mortgage Insurance Premium (UFMIP),
and interest rate buydowns. There is an existing field in the Residential Loan Data (RLD) Format 1003 Version
3.2 and MISMO Automated Underwriting Specification (AUS) Version 2.3.1 that captures the seller
concessions. However, based on FHA’s definition of the data element, DU for government loans will add
together the amounts from line k. Closing Costs Paid By Seller on the Details of Transaction; All Seller Credits
entered in the Other Credit section of the Details of Transaction; and any amount entered in the Seller
Concessions field in the Government Information screen (shown in the following two screenshots). DU does
not currently send this data element to the FHA TOTAL Mortgage Scorecard, but will do so after this release.
6.26.2012
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Down Payment
This data element is defined by HUD as line a. Purchase Price from the Details of Transaction screen (shown
below) minus line m. Loan Amount (Exclude PMI, MIP, Funding Fee). DU calculates this amount based on
existing fields in the Residential Loan Data (RLD) Format 1003 Version 3.2 and MISMO Automated
Underwriting Specification (AUS) Version 2.3.1. DU currently sends this data element to the FHA TOTAL
Mortgage Scorecard and will continue to do so.
NOTE:
DU automatically populates line m. Loan Amount (Exclude PMI, MIP, Funding Fee) in the Details of
Transaction screen with the amount entered in the Loan Amount field on the Types, Terms and Property
screen (shown below).
6.26.2012
9
Condominium Indicator
If Condominium, Detached Condo, or High Rise Condo is selected as the Subject Property Type in the
Additional Data section (shown below), then DU will send a “Y” to the FHA TOTAL Mortgage Scorecard to
indicate the property is a condominium. For all other property types, DU will send an “N” to the FHA TOTAL
Mortgage Scorecard to indicate the property is not a condominium. DU for government loans does not
currently send this data element to the FHA TOTAL Mortgage Scorecard, but will do so starting with this
release.
6.26.2012
10
Property County Code and County Loan Limits
With this release, DU will start sending the Property County Code to the FHA TOTAL Mortgage Scorecard and
start receiving the County Loan Limit information in return. This update will mean that there will be less of a lag
time for the correct amounts to be reflected in DU when adjustments are made to the FHA county loan limits.
To make this possible, customers will need to enter both the Property State and Zip Code on the Types, Terms
and Property screen (shown below) for all FHA submissions to allow the Property GeoCoder to determine the
correct county. If the Zip Code is not entered, or the Property GeoCoder is not able to determine a county, the
statutory state minimum will be used in DU.
NOTE:
If for any reason the County Loan Limit displayed in DU is inaccurate, the customer should document
the file by printing out the correct loan limit information from the FHA Mortgage Limits lookup tool, which is
located at the following URL: https://entp.hud.gov/idapp/html/hicostlook.cfm
6.26.2012
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With this release, the County field located in the FHA Government Information screen (shown below) will no
longer be used by DU to determine the county. The field will be removed from the user interface in a future
release of DU.
Review Rules
Review Rules are codes sent to DU to note the reason the loan casefile submission received a Refer
recommendation from the FHA TOTAL Mortgage Scorecard. HUD is incorporating four new Review Rules in
the FHA TOTAL Mortgage Scorecard. DU is adding two new corresponding messages as well as updating two
existing messages. The following two messages are new with this release:
This loan casefile has been referred because the current housing expense is greater than the total
monthly income.
This loan casefile has been referred because the amount being contributed by the seller exceeds 6
percent of the sales price.
The following two messages are being updated with this release:
This loan casefile has been referred due to the presence of one or more 30-day late mortgage
payments showing on the credit report that occurred within the last 12 months, and the transaction type
is a cash-out refinance.
This loan casefile has been referred because at least one borrower does not have a credit score.
Error Messaging
The handling of Error Codes returned from the FHA TOTAL Mortgage Scorecard to DU will be updated in this
release. After the release implementation over the weekend of July 21, if DU does not recognize an error code
returned by the FHA TOTAL Mortgage Scorecard, the numeric code will be passed to the customer in the
following new error message:
6.26.2012
12
The following error codes were returned from the FHA TOTAL Mortgage Scorecard, but aren't
recognized by Desktop Underwriter. Please refer to the current version of the FHA TOTAL Mortgage
Scorecard AUS Developer's Guide available on HUD's Web site for additional details.
The list of error codes and corresponding messages will also be updated in this release to incorporate two new
error messages, update the text of one error message, and remove three existing error messages. The
updated error code list is below. The current list of error codes and messages can be found in Appendix B of
the FHA TOTAL Mortgage Scorecard AUS Developer’s Guide located at the following URL:
http://www.hud.gov/pub/chums/aus-developers-guide.pdf
Code
Type of Error Message
Message Text
001
FHA TOTAL Mortgage Scorecard
The FHA TOTAL Mortgage Scorecard server was not set up correctly.
004
One SSN must be entered.
005
SSN1 is not valid.
006
SSN2 is not valid.
007
SSN3 is not valid.
008
SSN4 is not valid.
009
SSN5 is not valid.
010
SSN2 is required.
011
SSN3 is required.
012
SSN4 is required.
290
Invalid FHA Case Number.
300
Applicant(s) combined monthly income must be greater than 0.
305
Appraised Value must be between $9,000 and $9,999,999. Otherwise, it must be 0.
310
Loan amount including MIP must be greater than 0.
315
Monthly payment, including Principal, Interest, Taxes and Insurance, must be greater
than 0.
320
Mortgage Insurance Premium cannot be less than 0.
325
Mortgage term in months must be between 48 and 360.
330
Sales price must be between $9,000 and $9,999,999.
335
Either Appraised Value or Sales price is required.
340
Total number of applicants must be between 1 and 5.
345
Total number of applicants does not match number of SSNs entered.
350
Unique identification for AUS must be entered
355
Unique identification for loan application assigned by AUS must be entered
360
Loan To Value Ratio must be between 11 and 125.
365
Front End Ratio must be greater than 0 and less than or equal to 100.
370
Back End Ratio must be greater than 0 and less than or equal to 100.
372
Back End Ratio must be greater than or equal to Front End Ratio.
375
Underwriting P & I must be greater than 0 and less than $15,000.
380
Underwriting Interest must be greater than 0.
385
Either Lender ID or Sponsored Originator EIN is required.
386
Both Lender ID and Sponsored Originator EIN not allowed. Please submit either
6.26.2012
13
Code
Message Text
Lender ID or Sponsored Originator EIN.
387
Sponsored Originator EIN is invalid. Sponsored Originator EIN must be nine numeric
digits.
388
Sponsored Originator EIN is invalid. Sponsored Originator EIN must be in the
CHUMS Sponsored Originator list.
390
Lender ID must contain 10 digits.
391
Invalid Lender ID. Please ensure lender ID is entered correctly. If it is entered
correctly, please contact Lender Approval Division at (202)708-3976.
392
Lender ID is not active.
393
Sponsor ID is required.
394
Sponsor ID must contain 10 digits.
395
Invalid Sponsor ID.
396
Sponsor ID is not active.
397
Both Lender ID and Sponsor ID cannot be mortgagee type 4.
398
Lender ID is not certified through FHA Connection Certification Screen.
399
Sponsor ID is not certified through FHA Connection Certification Screen.
400
Credit report is required.
405
Each Credit Report must include a Credit Report Type and Credit Report Data.
415
First Time Home Buyer must by “Y” or “N”.
420
Counsel Type is not valid.
425
Current Housing Expense must be between $0 and $99,999.99.
430
Gift Letter Amount must be between $0 and $999,999.
435
Gift Letter Source must be “00”, “01”, “03”, “06”, or “15”.
440
Required Investment must be greater than the Negative Loan Amount.
445
For a refinance, Required Investment must be less than or equal to $999,999. For a
purchase, Required Investment must be less than: 120 percent (Sale Price) Mortgage Amount.
450
Down Payment is required.
465
Total Fixed Payment must be between $0 and Monthly Income.
470
Condo Indicator must be “Y” or “N”.
475
Total Closing Costs cannot exceed 20 percent of Sale Price on a purchase. Total
Closing Costs cannot exceed 20 percent of Appraised Value on a refinance.
480
Seller Concession Amount must be between $0 and 20 percent of Sales Price.
485
Borrower Closing Costs cannot exceed 20 percent of Sale Price on a purchase.
Borrower Closing Costs cannot exceed 20 percent of Appraised Value on a refinance.
490
Gift Letter Amount must be greater than zero when Gift Letter Source is not “N/A”.
495
Gift Letter Source cannot be “N/A” when Gift Letter Amount is greater than zero.
999
The FHA TOTAL Mortgage Scorecard experienced an unexpected error while
processing.
9010
DU for Government Loans
Invalid property type.
9013
GPM is not a valid amortization type for automated underwriting.
9014
Other is not a valid amortization type for automated underwriting.
9018
Scheduled Amortization is not a valid repayment type for Government Loans.
6.26.2012
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Code
Message Text
9019
Interest Only is not a valid repayment type for Government Loans.
9020
Possible Negative Amortization is not a valid repayment type for Government Loans.
9021
Scheduled Negative Amortization is not a valid repayment type for Government
Loans.
9022
Bi-weekly repayment type is not valid for Government Loans.
9023
Second Mortgage is not a valid lien type for Government Loans.
9024
Other Mortgage is not a valid lien type for Government Loans.
9990
HUD Scorecard output error, resubmit
9991
No longer eligible for FTS.
9995
Internet server err, resubmit
9996
Credential Svc. err, resubmit
9997
A failure has occurred while connecting to the FHA TOTAL Mortgage Scorecard.
Please resubmit your case.
9998
HUD Proxy Server error, resubmit
Additional Resources
For additional information, please reference the documents and Web sites listed in the table below.
Document
URL
HUD Handbook 4155.1, Mortgage
Credit Analysis for Mortgage
Insurance
http://portal.hud.gov/hudportal/HUD?src=/program_offices/a
dministration/hudclips/handbooks/hsgh
HUD Mortgagee Letters
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/
FHA Mortgage Limits Lookup Tool
https://entp.hud.gov/idapp/html/hicostlook.cfm
HUD CHUMS Data Files Page (Loan
Limit Files)
http://www.hud.gov/pub/chums/file_layouts.html
FHA Resource Center: Contact
Information and FAQs
http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm
AUS Developer’s Guide
http://www.hud.gov/pub/chums/aus-developers-guide.pdf
VA Lenders Handbook
http://www.benefits.va.gov/warms/pam26_7.asp
VA Circulars
http://www.benefits.va.gov/homeloans/new.asp
VA Regional Loan Centers: Contact
Information
http://www.benefits.va.gov/homeloans/rlcweb.asp
VA Loan Limit Page
http://www.benefits.va.gov/homeloans/loan_limits.asp
6.26.2012
15
For More Information
More information can be found in the Help Center located within the User Interface of Desktop Originator®
DO®/DU. Additionally, lenders may contact their Fannie Mae Account Team, and mortgage brokers should
contact their DO sponsoring wholesale lender. For questions regarding HUD policies and guidelines, lenders
and mortgage brokers should contact HUD at 1-800-CALL-FHA (1-800-225-5342). For questions regarding VA
policies and guidelines, lenders and mortgage brokers should contact their VA Regional Loan Center.
6.26.2012
16

DU for Government Loans Release Notes July 2012 Release

Transcription

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