Need Help From My Fellow Loan Originators

Hi,
I was just told by an AE that I was going to Broker an FHA loan, that Investors require 12 months seasoning on borrowers that attempted a loan mod, from date of termination.

Is this actually true? .... Thank you, Rudi
  • September 23 2010 - Tustin
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Answers (20)

Profile picture for Crestico Funding
Perhaps the first Minute and half of this clip can give you a little idea as what MERS does

http://www.thinkbigworksmall.com/mypage/archive/1/53413/


It does explain why MERS is needed to see what has happened with this loan.


  • September 24 2010
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Hamp,

I just learned that Homeowners may have access to MERS: http://www.mersinc.org/homeowners/index.aspx

Happy funding, Rudi
  • September 24 2010
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Rudi
I know what MERS is. I just don't know what info would be in a "MERS Finding". I guess the Mod could result in an assignment that would show up? Or possibly just commentary about servicing issues on the loan in general. I guess it doesn't matter. And, on second thought, I don't even care.

I think this sounds like an excuse to cover some other discomfort with the file. Good luck straightening it out. I used to love cases like this.
  • September 24 2010
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Thanks Andrew, Lewis, HUGD & Ed. I appreciate your input guys.
 
I still have Corporate and a few other AEs doing research. This is something new to everyone that I have spoken with except the first AE, which was from Nations Direct.

Thanks again, Rudi
  • September 24 2010
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@Hamp

Hamp, MERS: http://www.mersinc.org/

Happy funding, Rudi
  • September 24 2010
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Paid as a greed does not mean they are current if they are not current they are late.  I believ that is the issue that they were in a trial period making partial payments...the payments get reported as late..The Consumer will have to wait 12 months to Refi.

I am a DE Lender and bank and have never had an underwriter ask for or reference a MERS report.
  • September 24 2010
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Very interesting topic and one that will certainly be interpreted differently from lender to lender and even underwriter to underwriter. The question is how do they know a loan mod was attempted. Actually, the real question should be, if the consumer paid on time why would they even be penalized for attempting to modify their loan and put themselves in a better financial situation. Just ridiculous if you ask me...

They could have the 700+ score and be past due if the mortgage is not reporting current... for example it could show paid as agreed but has not reported for the past four months while the consumer was making on time modification payments. 

What many don't understand is these payments do not always get applied to the mortgage, especially if the loan mod is turned down. Trust me, I have seen it first hand. It is really quite a travesty. The date last reported is the only thing to my knowledge that would trigger a loan mod attempt.

 
  • September 24 2010
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Guys what does a MERS finding disclose. Being a former lowly, scummish, non FHA approved, Broker, I've never seen one.

HUGD
I thought RUDI was a bank now.
  • September 24 2010
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It's true on the MERS findings.  During the trial payment period of a mod the difference between the actual payment and the trial payment is treated as late.  

If the borrower isn't approved for the loan mod, the borrower must repay the "deferred" payment amount immediately or as some lenders are doing financing the "deferred" amount as a silent second if you will.  It's basically a consumer loan using the home as collateral.

If my memory serves me correctly, I'll check in the morning, USBank is one of the banks without the overlay. 
  • September 23 2010
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I'm calling it a night. I'm up early, so I'll check in to see what's new. Thanks to both of you, Andrew & HUGD!

Have a pleasant evening, Rudi
  • September 23 2010
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HUGD,

No problems with a 707 mid-score.

Thank you, Rudi
  • September 23 2010
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HUGD,

As I responded to Andrew, I was told they would know when they got their MERS back. That makes sense to me, when I was an AE I saw MERS Reports. We were instructed about the information supplied for Broker Approvals and on files. Although an AE I was not suppose to be privileged to see this information.

Thank you, Rudi
  • September 23 2010
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The trial period is usually a partial payment.  If he was reported late on his mortgage then he will need to wait 12 months.  I am guessing he is reporting as late at least once in the last 12 months,

  • September 23 2010
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Andrew,

That implies 12 months seasoning on a short sale, doesn't it?

You couldn't find anything regarding loan modifications? My borrower has a 1st &  2nd through CITI. CITI solicited him last August. They denied him after his 6 month trial in February. All payments were made on time. The question remains if this has the same guidelines as a short sale?

Thanks for you efforts Andrew!

Happy funding, Rudi

  • September 23 2010
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The only reference I could find was to getting an FHA loan after a short sale and as long as the last 12 payments were made on-time that's not an issue.  If anything Rudy it's a lender Overlay.
  • September 23 2010
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Andrew,

I look forward to what you come up with. Thank you for doing this. I receive All Regs email bulletins, although I'm not a subscriber. I was doing very few Agency Loans.

Happy funding, Rudi
  • September 23 2010
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@HUGD,

Yes, although Jumbo Loans and Self-employed borrowers are still my specialties.  I have to conform to our Full-Service Mortgage Banker / Broker ideals. "When in Rome, do as the Romans do."

I also had to give up my upFront Mortgage Broker Membership due to the fact that I work for a bank. I still do business the same as before, without the UMBA Membership. I'll miss the loans I was receiving off of their website. But, we have so much to offer, that will be replaced quickly.

I've had my www.umboc.com website since 2007. Now I'm Upfront Mortgage Banker Orange County, instead of upFront Mortgage Broker Orange County.

So HUGD, have you ever heard this 12 month ruling about mod borrowers?

Thank you, Rudi
  • September 23 2010
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That sounds like BS to me.  So if a homeowner thinks they want a modification and get turned down FHA won't buy the loan...I find that near impossible to believe.  Give me a little bit to check out All Regs.
  • September 23 2010
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Andrew,

Thanks for responding.
I asked the same question. I was told when they receive their MERS findings.

Thank you, Rudi
  • September 23 2010
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How would they know they attempted a modification?

Did they fall behind on the payments?
  • September 23 2010
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