FHA Streamline Refinance Guide - Carrington Wholesale … · CMS FHA Streamline Refinance . I....
Transcript of FHA Streamline Refinance Guide - Carrington Wholesale … · CMS FHA Streamline Refinance . I....
CARRINGTON MORTGAGE SERVICES 1610 EAST SAINT ANDREW PLACE SUITE B-150 H SANTA ANA, CA 92705 949. 517. 7000
Confidential & Proprietary Presented to:
June 2012
FHA Streamline Refinance Guide
CMS Approved Brokers
1 Confidential & Proprietary
CMS FHA Streamline Refinances
• What Questions do you need to ask
• What systems will you need to access to gain the correct
numbers
• How to complete the 1003 correctly for CMS
• How to complete the proper CMS forms
• How to determine the net tangible benefit for CMS
• What CMS documentation is required
• Examples of 3 CMS streamline scenarios
• HUD Policies
How to Determine Streamline Refinances Eligibility For CMS
2 Confidential & Proprietary
CMS FHA Streamline Refinances
• What is the current balance of the mortgage?
• What was the original loan amount and term?
• Are all Borrowers on existing loan going to be on the new FHA loan?
• Has there been any 30 day late payments in the last 12 months?
• Has the borrower been in the house at least 210 days and made at least 6 payments?
• What is the current interest rate?
• When was the FHA Case number issued?
• Is the Property listed for sale?
• Is the property currently owner occupied?
• Do any Borrowers have additional existing FHA Financing?
Questions You Need to Ask for CMS Streamline Refinances
3 Confidential & Proprietary
CMS FHA Streamline Refinance
1. Loan Origination Software • Employment Information section (pg. 1 of the 1003)
• Income Section (pg. 2 of the 1003)
• Present Housing Expense section (pg. 2 of the 1003)
• Liability Section (pg. 2 of the 1003)
• Asset Section (pg. 2 of the 1003) only if short to close
• Schedule of Real Estate (pg. 3 of the 1003)
• Details of Transaction (pg. 3 of the 1003)
2. FHA Connection (You will need the info below) • FHA Case number from the current loan
• Date of Birth for all Borrowers
• Social Security Number for all Borrowers
• Address of Property
Systems, Forms & Charts to Use
4 Confidential & Proprietary
CMS FHA Streamline Refinance
3. Title Company’s Data Base • Deed of Trust
• Property Profile
4. Pipeline Manager • Pricing
5. Forms • CMS Net Tangible Benefit Worksheet
• FHA Max Mortgage. Calculation Worksheets – Streamline With & Without Appraisal
6. Charts • HUD Upfront & Annual MIP Premium Chart
7. Attachments • CMS Required Documentation Checklist
• CMS FHA Streamline Scenarios
Systems, Forms & Charts to Use (Continued)
5 Confidential & Proprietary
CMS FHA Streamline Refinance
I. Systems – The 1003 for CMS
Make sure you complete the current
employment information section on
the 1003
Compare the current loan’s monthly PI and MI to the new loan in order to calculate the Net Tangible Benefit
If this is a non-credit qualifying loan make sure you
don’t place any income on the 1003
Make sure you complete the Schedule of Real Estate
6 Confidential & Proprietary
CMS FHA Streamline Refinance
I. Systems – Details of Transaction for CMS
The cash from the Borrower is usually at least 1 month’s
payment, unless the rate you selected gives a credit to the
borrower. The loan cannot be structured with any cash back to
the borrower.
7 Confidential & Proprietary
CMS FHA Streamline Refinance
I. Systems – FHA Connection
8 Confidential & Proprietary
CMS FHA Streamline Refinance
I. Systems – Any Title Company’s Database
9 Confidential & Proprietary
CMS FHA Streamline Refinance
I. Systems – CMS Pipeline Manager, Pricing
0 Confidential & Proprietary
CMS FHA Streamline Refinance
II. Forms – CMS Net Tangible Benefit Worksheet
Completed by CMS Underwriters.
11 Confidential & Proprietary
CMS FHA Streamline Refinance
II. CMS Forms - FHA Max Mortgage Calculation w/o Appraisal
12 Confidential & Proprietary
CMS FHA Streamline Refinance
II. CMS Forms - FHA Max Mortgage Calculation with Appraisal
13 Confidential & Proprietary
CMS FHA Streamline Refinance
III. CMS Charts – Upfront & Annual MIP Chart.
Find more details about changes effective in April and June 2012 in the HUD Mortgagee Letter at:
• http://portal.hud.gov/hudportal/documents/huddoc?id=12-04ml.pdf
and the official HUD press release here:
• http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/HUDNo.12-037
14 Confidential & Proprietary
CMS FHA Streamline Refinance
CMS Resources:
15 Confidential & Proprietary
CMS FHA Streamline Refinance
CMS Resources:
16 Confidential & Proprietary
CMS FHA Streamline Refinance
• With a little preparation you should be able to quickly identify if a CMS FHA Streamline product is the best program for your customer.
• Remember to ask the proper questions so you can estimate the new maximum loan limit.
• Remember to pull the Refinance Authorization Results record from FHA Connection.
• Complete the CMS forms correctly.
• Do not complete the income section (pg. 2 of the 1003 for CMS) for CMS Non Credit Qualifying Streamline Refinances.
• If created correctly, CMS FHA Streamline Refinances should be easier to sell, process and fund.
17 Confidential & Proprietary
CMS FHA Streamline Refinance
Attachments
• CMS Checklist of Required Documentation
• 3 CMS Example Files
• Financing 60 days Interest
• Financing 30 days Interest
• Financing 30 days Interest w/ a twist
• HUD Mortgagee Letter 12-4
p 949.517.7000 1610 E. Saint Andrew Place, Suite B‐150, Santa Ana, CA 92705
Non-Credit Qualifying FHA Streamline (without Appraisal) Required Documentation
1. Completed submission sheet
2. FHA Maximum Mortgage Calculation Worksheet
3. FHA Streamline Net Tangible Benefit Worksheet
4. Initial 1003 completed in its entirety (do not include any income or liabilities
with the exception of the mortgage being paid off)
5. Initial 92900-A
6. Credit Authorization
7. Copy of Current Mortgage Note
8. Copy of Current Mortgage Statement – Evidencing MIP
9. Driver’s License / Identification Card
10. Social Security Card
11. Payoff Demand
12. FHA Case # with Refinance Authorization **
13. 2 Months Current Bank Statements (If $$$ is due escrow)
14. Estimated HUD-1
15. Escrow Instructions
16. Prelim
17. All Applicable Disclosures
** Contact your Carrington Mortgage Account Manager for FHA Case # ordering and to
request refinance authorization / Unearned UFMIP amount.
CMS Example #1 – Financing 60 Days Interest HUD allows for borrowers to finance up to 60 days of interest into the new FHA streamline provided it is itemized on the payoff demand. In this example, our payoff demand shows the borrower is due for their Mar. 1st payment (Interest from 2/01/12 – 3/31/12). To complete our FHA streamline loan amount worksheet, we will do the following: March 2012 Closing: 1a. Total Loan Amount of Current FHA Loan – This can be found on the existing note or the credit report. 2a. Unpaid Principal Balance – We may include up to 60 days interest for the current month but may not include late charges, escrow shortages, delinquent interest and processing type fees. For this example, we will include the unpaid principal balance of $236,188.13 + 60 days interest $2165.06 for a total of $238,353.19. 2b. Maximum UFMIP - The unearned UFMIP can be found on line 4(h) of the refinance authorization. In our example, the amount is $2,605.40 (closing date of Mar. 2012. New Estimated UFMIP – Multiply line 2a by 1%. In our example, the amount is $2,383.53. 3a. Maximum Base Mortgage – Line 3a will be calculated by utilizing the payoff amount as described in line 1a minus the lesser of the unearned UFMIP or the new UFMIP. In this case, our the new UFMIP is less so we would subtract $2,383.53 from our payoff amount of $238,353.19 to get a new base loan amount of $235,969.66. 4a. UFMIP (if Financed) – Multiply line 3a by 1%. 4b. Total New Mortgage Amount – This is the maximum new mortgage that can be utilized in the FHA streamline. Notes:
When utilizing your new mortgage amounts within your mortgage origination software, always remember to drop the “cents” from the totals on the worksheet. Work in whole dollars only.
It is important to remember that if the borrower in this example was to make their 3/1 payment prior to funding, the payoff amount would change and you would need to recalculate the loan amount based on financing 30 days of interest only.
The new loan amount may never exceed the previous loan amount (line 1a)
Payoff Demand Statement
Escrow # Xxx Faxed to: 1-555-1212 (FHA)
PAYOFF CALCULATION
Principle Balance as of 02/01/2012 $236,188.13Interest from 02/01/2012 to 03/31/2012 2,165.06
Uncollected Late Charges 72.94 Mortgage Insurance Premium 105.60 Escrow Balance Due 420.89
Total Amount Required to Release Lien (As of March 30, 2012) $238,952.62 Payoff Statement Via Facsimile Fee 10.00
Total Amount Due $238,962.62AMENDED DEMAND STATEMENTS ARE SENT AUTOMATICALLY IF THE TOTAL AMOUNT DUE INCREASES
BEFORE MARCH 30, 2012
PAYOFF INSTRUCTIONS Payoff funds must be made payable to Bank of America, N.A. and will be accepted by WIRE or CERTIFIED FUNDS ONLY. They MUST reference the YOUR BANK loan number, property address and borrower’s name in the OBI (Originator Beneficiary Information) field of the wire transfer or on the face of the check and must be sent per the instructions below. Failure to do so may cause delays resulting in additional interest due or the return of the funds to the remitter. Funds received after 4:00 p.m. Central Time may be posted the following business day.
Wire Funds to: Beneficiary Band: YOUR BANK
ABA Routing #: 4444-5555-6 Beneficiary Acct Name: BBB MRC Account #123456-7890
Mail CERTIFIED Funds to: YOUR BANK
Attention: Payoff Department 5555 Corporate Drive
Anywhere, CA 55555-4444
PLEASE DO NOT SEND CERTIFIED FUNDS TO THE WIRE FUNDS INTRUCTIONS ABOVE AS CERTIFIED FUNDS MUST BE PROCESSED IN OUR PAYOFF DEPARTMENT.
STATEMENT VOID AFTER March 30, 2012
Statement Date March 19, 2012
Your Bank Here Loan No: FHA Case #:
Name & Property Address:
FHA CONNECTION
Refinance Authorization Results FHA Case Number:
Contact Name: Contact Phone:
Projected Closing Date: 03/20/12
Pricing LTV: $96.50
Term: Upfront MIP Factor: Annual MIP Factor:
360 1.000% TBD
* Refinance Authorization *
New Case Old Case
Borrower Name:
Address:
Lender ID: 2475100005 13065
Lender Name: CARRINGTON MORTGAGE SERVICES L YOUR BANK IN YOUR TOWN
New Closing Month 03/12 04/12
Computed Premium (4B): $4,070.94 (4B): $4,070.94
Period of Insurance (4C): 9 (4C): 10
Old Term (in months) (4D): 360 (4D): 360
Original Mortgage Amt (4E): $411,164 (4E): $411,164
Refund UFMIP Factor (%) (4F): .64000 (4F): .62000
UFMIP Earned by HUD (4G): $1,465.54 (4G): $1,546.96
Unearned UFMIP (4H): $2,605.40 (4H): $2,523.98
Original Property Value (4I): $421,860 (4I): $421,860
Unpaid Balance (4J): $406,106 (4J): $405,533
Authorization No. 9946320120320
Expiration Date 07/31/12
HSG/FHA Home Page | HUD Single Family Housing Page
HUD Multifamily Housing Page | HUDCLIPS | Lenders Information | Mortgagee Letters
CMS Example #2 – Financing 30 Days Interest HUD allows for borrowers to finance up to 60 days of interest into the new FHA streamline provided it is itemized on the payoff demand. In this example, our payoff demand shows the borrower is due for their April 1st payment (Interest from 3/1/2012 – 3/31/2012). To complete our FHA streamline loan amount worksheet, we will do the following: March 2012 Closing: 1a. Total Loan Amount of Current FHA Loan – This can be found on the existing note or the credit report. 2a. Unpaid Principal Balance – We may include 30 days interest for the current month but may not include late charges, escrow shortages, delinquent interest and processing type fees. For this example, we will include the unpaid principal balance of $406,676.31 + 30 days interest $1,482.67 for a total of $408,158.98. 2b. Maximum UFMIP - The unearned UFMIP can be found on line 4(h) of the refinance authorization. In our example, the amount is $2,605.40. New Estimated UFMIP – Multiply line 2a by 1%. In our example, the amount is $4,081.58. 3a. Maximum Base Mortgage – Line 3a will be calculated by utilizing the payoff amount as described in line 1a minus the lesser of the unearned UFMIP or the new UFMIP. In this case, our unearned UFMIP is less so we would subtract $2,605.40 from our payoff amount of $408,158.98 to get a new base loan amount of $405,553.58. 4a. UFMIP (if Financed) – Multiply line 3a by 1%. 4b. Total New Mortgage Amount – This is the maximum new mortgage that can be utilized in the FHA streamline. Notes:
When utilizing your new mortgage amounts within your mortgage origination software, always remember to drop the “cents” from the totals on the worksheet. Work in whole dollars only.
The new loan amount may never exceed the previous loan amount (line 1a)
Payoff Demand Statement
Escrow # Xxx Faxed to: 555-555-1212 (FHA)
PAYOFF CALCULATION
Principle Balance as of 03/01/2012 $406,676.31Interest from 03/01/2012 to 03/31/2012 1,482.67
Mortgage Insurance Premium 387.21Total Amount Required to Release Lien (As of March 30, 2012 $408,546.19
Payoff Statement Via Facsimile Fee 5.00Total Amount Due $408,551.19
AMENDED DEMAND STATEMENTS ARE SENT AUTOMATICALLY IF THE TOTAL AMOUNT DUE INCREASES BEFORE MARCH 30, 2012
PAYOFF INSTRUCTIONS
Payoff funds must be made payable to Bank of America, N.A. and will be accepted by WIRE or CERTIFIED FUNDS ONLY. They MUST reference the YOUR BANK loan number, property address and borrower’s name in the OBI (Originator Beneficiary Information) field of the wire transfer or on the face of the check and must be sent per the instructions below. Failure to do so may cause delays resulting in additional interest due or the return of the funds to the remitter. Funds received after 4:00 p.m. Central Time may be posted the following business day.
Wire Funds to: Beneficiary Band: YOUR BANK
ABA Routing #: 4444-5555-6 Beneficiary Acct Name: BBB MRC Account #123456-7890
Mail CERTIFIED Funds to: YOUR BANK
Attention: Payoff Department 5555 Corporate Drive
Anywhere, CA 55555-4444
PLEASE DO NOT SEND CERTIFIED FUNDS TO THE WIRE FUNDS INTRUCTIONS ABOVE AS CERTIFIED FUNDS MUST BE PROCESSED IN OUR PAYOFF DEPARTMENT.
STATEMENT VOID AFTER March 30, 2012
Statement Date March 19, 2012
Your Bank Here Loan No: FHA Case #:
Name & Property Address:
FHA CONNECTION
Refinance Authorization Results FHA Case Number:
Contact Name: Contact Phone:
Projected Closing Date: 03/20/12
Pricing LTV: $96.50
Term: Upfront MIP Factor: Annual MIP Factor:
360 1.000% TBD
* Refinance Authorization *
New Case Old Case
Borrower Name:
Address:
Lender ID: 2475100005 13065
Lender Name: CARRINGTON MORTGAGE SERVICES L YOUR BANK IN YOUR TOWN
New Closing Month 03/12 04/12
Computed Premium (4B): $4,070.94 (4B): $4,070.94
Period of Insurance (4C): 9 (4C): 10
Old Term (in months) (4D): 360 (4D): 360
Original Mortgage Amt (4E): $411,164 (4E): $411,164
Refund UFMIP Factor (%) (4F): .64000 (4F): .62000
UFMIP Earned by HUD (4G): $1,465.54 (4G): $1,546.96
Unearned UFMIP (4H): $2,605.40 (4H): $2,523.98
Original Property Value (4I): $421,860 (4I): $421,860
Unpaid Balance (4J): $406,106 (4J): $405,533
Authorization No. 9946320120320
Expiration Date 07/31/12
HSG/FHA Home Page | HUD Single Family Housing Page
HUD Multifamily Housing Page | HUDCLIPS | Lenders Information | Mortgagee Letters
CMS Example #3 – Financing 30 Days Interest (with a twist) HUD allows for borrowers to finance up to 60 days of interest into the new FHA streamline provided it is itemized on the payoff demand. In this example, our payoff demand shows the borrower is due for their March 1st payment (Interest from 2/01/2012 – 4/30/2012). The catch here is that we will be closing in March and since we pay mortgage interest in arrears, we cannot include the interest from 4/1/2012 – 4/30/2012. To complete our FHA streamline loan amount worksheet, we will do the following: February 2012 Closing: 1a. Total Loan Amount of Current FHA Loan – This can be found on the existing note or the credit report. 2a. Unpaid Principal Balance – We may include 30 days interest for the current month but may not include late charges, escrow shortages, delinquent interest and processing type fees. For this example, we will include the unpaid principal balance of $428,609.68 + 60 days interest ($5,905.42/3 x 2) $3,936.95 for a total of $432,546.63. 2b. Maximum UFMIP - The unearned UFMIP can be found on line 4(h) of the refinance authorization. In our example, the amount is $2,605.40. New Estimated UFMIP – Multiply line 2a by 1%. In our example, the amount is $4,323.46. 3a. Maximum Base Mortgage – Line 3a will be calculated by utilizing the payoff amount as described in line 1a minus the lesser of the unearned UFMIP or the new UFMIP. In this case, our unearned UFMIP is less so we would subtract $2,605.40 from our payoff amount of $432,546.63 to get a new base loan amount of $429,941.23. 4a. UFMIP (if Financed) – Multiply line 3a by 1%. 4b. Total New Mortgage Amount – This is the maximum new mortgage that can be utilized in the FHA streamline. Notes:
When utilizing your new mortgage amounts within your mortgage origination software, always remember to drop the “cents” from the totals on the worksheet. Work in whole dollars only.
It is important to remember that if the borrower in this example was to make their 3/1 payment prior to funding, the payoff amount would change and you would need to recalculate the loan amount based on 30 days of interest only.
The new loan amount may never exceed the previous loan amount (line 1a)
Payoff Demand Statement
Faxed to: 555-555-1212 (FHA)
PAYOFF CALCULATION
Principle Balance as of 02/01/2012 $428,609.68Interest from 02/01/2012 to 04/30/2012 5,905.42
Uncollected Late Charges 135.84 Mortgage Insurance Premium 390.14
Total Amount Required to Release Lien (As of April 2, 2012 $435,041.08 Payoff Statement Via Facsimile Fee 5.00
Total Amount Due $435,046.08AMENDED DEMAND STATEMENTS ARE SENT AUTOMATICALLY IF THE TOTAL AMOUNT DUE INCREASES BEFORE MARCH 30, 2012
PAYOFF INSTRUCTIONS
Payoff funds must be made payable to Bank of America, N.A. and will be accepted by WIRE or CERTIFIED FUNDS ONLY. They MUST reference the YOUR BANK loan number, property address and borrower’s name in the OBI (Originator Beneficiary Information) field of the wire transfer or on the face of the check and must be sent per the instructions below. Failure to do so may cause delays resulting in additional interest due or the return of the funds to the remitter. Funds received after 4:00 p.m. Central Time may be posted the following business day.
Wire Funds to: Beneficiary Band: YOUR BANK
ABA Routing #: 4444-5555-6 Beneficiary Acct Name: BBB MRC Account #123456-7890
Mail CERTIFIED Funds to: YOUR BANK
Attention: Payoff Department 5555 Corporate Drive
Anywhere, CA 55555-4444
PLEASE DO NOT SEND CERTIFIED FUNDS TO THE WIRE FUNDS INTRUCTIONS ABOVE AS CERTIFIED FUNDS MUST BE PROCESSED IN OUR PAYOFF DEPARTMENT.
STATEMENT VOID AFTER April 2, 2012
Statement Date March 16, 2012
Your Bank Here Loan No: FHA Case #:
Name & Property Address:
FHA CONNECTION
Refinance Authorization Results FHA Case Number:
Contact Name: Contact Phone:
Projected Closing Date: 03/30/12
Pricing LTV: $96.50
Term: Upfront MIP Factor: Annual MIP Factor:
360 1.000% TBD
* Refinance Authorization *
New Case Old Case
Borrower Name:
Address:
Lender ID: 2475100005 13065
Lender Name: CARRINGTON MORTGAGE SERVICES L YOUR BANK IN YOUR TOWN
New Closing Month 03/12 04/12
Computed Premium (4B): $4,070.94 (4B): $4,070.94
Period of Insurance (4C): 9 (4C): 10
Old Term (in months) (4D): 360 (4D): 360
Original Mortgage Amt (4E): $411,164 (4E): $411,164
Refund UFMIP Factor (%) (4F): .64000 (4F): .62000
UFMIP Earned by HUD (4G): $1,465.54 (4G): $1,546.96
Unearned UFMIP (4H): $2,605.40 (4H): $2,523.98
Original Property Value (4I): $421,860 (4I): $421,860
Unpaid Balance (4J): $406,106 (4J): $405,533
Authorization No. 9946320120320
Expiration Date 07/31/12
HSG/FHA Home Page | HUD Single Family Housing Page
HUD Multifamily Housing Page | HUDCLIPS | Lenders Information | Mortgagee Letters
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSING-
FEDERAL HOUSING COMMISSIONER
1
Date: March 6, 2012
To: All Approved Mortgagees
Mortgagee Letter 12-4
Subject Single Family Mortgage Insurance: Annual and Up-Front Mortgage
Insurance Premium – Changes
Purpose This Mortgagee Letter (ML) announces changes to the FHA Single
Family Annual Mortgage Insurance Premium (Annual MIP) and Up-
Front Mortgage Insurance Premium (UFMIP). Changes are applicable
to all Single Family (SF) Forward Mortgage programs except those
noted in the section below titled, “Exceptions to Announced Premium
Changes”. Current Annual MIP and UFMIP remain unchanged for those
excepted programs and products at this time.
Effective Date These changes are effective for FHA case numbers assigned on or
after April 9, 2012, unless otherwise specified below.
Mortgagees must continue to comply with the requirements of
ML 2011-10 concerning requests for, and cancellation of, FHA case
numbers. Specifically, mortgagees must:
request case numbers only when they have an active loan application
for the subject borrower and property; and
certify at the time of requesting a case number that they have an
active loan application for the subject borrower and property; and
provide the subject borrower’s name and social security number for
all new construction (proposed construction and existing
construction less than one year old).
Continued on next page
2
Mortgagee Letter 12-4, Continued
Affected Topics Below is a list of the blocks in the subject handbook that are affected.
HUD 4155.2 Lender’s Guide to Single Family Mortgage Insurance
Process
7.3.e, Reference Chart: UFMIP and Annual MIP for Mortgages with
Terms More Than 15 Years
7.3.f, Annual Premiums for Mortgages with Terms More Than 15
Years
7.3.g, Reference Chart: UFMIP and Annual Premiums for Mortgages
with Terms Less Than 15 Years
Increase to
Annual
Mortgage
Insurance
Premium
On December 23, 2011, the President signed into law the Temporary
Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), which
requires FHA to increase the Annual MIP it collects by 10 basis points
(bps). This change is effective for case numbers assigned on or after
April 9, 2012.
The table below shows the new effective annual premium rates by
amortization term, base loan amount and LTV ratio. It also shows when
the new Annual MIP takes effect, based on FHA Case Number
assignment date.
Term > 15 Years
Base Loan Amount LTV Effective Annual MIP
Any Amount ≤ 95.00% April 9, 2012 120 bps
Any Amount > 95.00% April 9, 2012 125 bps
Term ≤ 15 Years with LTV above 78%
Any Amount ≤ 90.00% April 9, 2012 35 bps
Any Amount > 90.00% April 9, 2012 60 bps
Note: SF forward mortgages with amortization terms of 15 years or less,
and a loan-to-value (LTV) ratio of 78 percent or less, remain exempt
from the Annual MIP (see Mortgagee Letter 2011-35).
Continued on next page
3
Mortgagee Letter 12-4, Continued
Increase to
Annual
Mortgage
Insurance
Premium on
Mortgages with
a High
Outstanding
Base Loan
Amount
FHA is also exercising its pre-existing statutory authority to add an
additional 25 bps to mortgages with base loan amounts exceeding
$625,500. This change is effective for case numbers assigned on or
after June 11, 2012.
The table below shows the new effective annual premium rates by
amortization term, base loan amount and LTV ratio. It also shows
when the new Annual MIP takes effect, based on FHA Case Number
assignment date.
Term > 15 Years
Base Loan Amount LTV Effective Annual MIP
≤ $625,500 ≤ 95.00% June 11, 2012 120 bps
≤ $625,500 > 95.00% June 11, 2012 125 bps
Above $625,500 ≤ 95.00% June 11, 2012 145 bps
Above $625,500 > 95.00% June 11, 2012 150 bps
Term ≤ 15 Years with LTV above 78%
≤ $625,500 ≤ 95.00% June 11, 2012 35 bps
≤ $625,500 > 95.00% June 11, 2012 60 bps
Above $625,500 ≤ 90.00% June 11, 2012 60 bps
Above $625,500 > 90.00% June 11, 2012 85 bps
Note: SF forward mortgages with amortization terms of 15 years or
less, and a loan-to-value (LTV) ratio of 78 percent or less, remain
exempt from the Annual MIP (see Mortgagee Letter 2011-35).
Decrease to
Annual
Mortgage
Insurance
Premium on
Certain
Streamline
Refinance
Transactions
For all SF Forward Streamline Refinance transactions that are
refinancing FHA loans endorsed on or before May 31, 2009, the
Annual MIP will be 55 bps, regardless of the base loan amount. The
endorsement date is on the Case Query screen in FHA Connection.
This change is effective for case numbers assigned on or after
June 11, 2012.
Continued on next page
4
Mortgagee Letter 12-4, Continued
Increase to
Up-Front
Mortgage
Insurance
Premium
The UFMIP for affected SF forward mortgages will be increased from
1 percent to 1.75 percent of the base loan amount. This increase
applies regardless of the amortization term or LTV ratio. FHA will
continue to permit financing of this charge into the mortgage and will
continue to calculate actual premium charges against the base loan
amount before adding any financed UFMIP. This change is effective
for case numbers assigned on or after April 9, 2012.
Decrease to
Up-Front
Mortgage
Insurance
Premium on
Certain
Streamline
Refinance
Transactions
For all SF Forward Streamline Refinance transactions that are
refinancing existing FHA loans that were endorsed on or before
May 31, 2009, the UFMIP will decrease from 1 percent to 0.01
percent of the base loan amount. The endorsement date is on the Case
Query screen in FHA Connection. This change is effective for case
numbers assigned on or after June 11, 2012.
Exceptions to
Announced
Premium
Changes
The changes specified in this ML apply to all mortgages insured under
FHA’s Single Family Mortgage Insurance Programs except:
Title I
Home Equity Conversion Mortgages (HECM)
Section 247 (Hawaiian Homelands)
Section 248 (Indian Reservations)
Section 223(e) (Declining Neighborhoods)
Continued on next page
5
Mortgagee Letter 12-4, Continued
Please address any questions about the topics in this Mortgagee Letter
to the FHA Resource Center at 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number via TTY
by calling the Federal Information Relay Service at 1-800-877-3339.
Signature
__________________________________
Carol J. Galante
Acting Assistant Secretary for Housing – Federal Housing Commissioner