Danny Salas

Welcome to Access Real Estate Lending

Welcome, Real Estate Agents & New Readers, to AccessLoans.net . Our top two articles, Industry Updates and Interest Rate Updates, are updated regularly. Industry Updates is primarly a Real Estate Agent’s Informative site, educating Real Estate Agents as to current changes in the Real Estate Lending Industry. Interest Rate Updates are for all readers to follow. It helps understand what makes rates move up and down and what drives that market. Scroll below to enjoy the most recent articles from similar topics.

What to Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Become A Fan On Facebook
Connect With Us On Linkedin

Strategies For Processing 2011’s Income Tax Returns

(Originally written for 2010 taxes, but still applicable and helpful!)

4506-T Form Processing Needs To Be Particular

Requirements for 2011 IRS Transcripts

When filling out an application package, you’ll notice a form called the 4506-T.  This form enables a lender to obtain an electronic print-out of the Federal 1040 Tax Returns that have been filed with the IRS.  If the tax returns provided do not match the computer’s electronic print-out, line-by-line, than the loan may not fund.

Why Buyers should physically take their 2011 Returns to the Local IRS Office

E-filing could be an eight to 12 week wait, before a buyer’s loan may fund, causing Escrows not to close on time!

What If The Print Out Is NOT Available Yet?

Generally speaking, if the electronic print out was not available, than you couldn’t use that year’s income, from the 1040’s.  If 2009 was not a particularly good year, and you need 2011’s income to make certain that your qualifying ratios work, for the home of your dreams…than there’s a dilema.  Answer:

For loans underwritten before April 15, 2011, if the borrower has filed their 2010 tax returns, and the tax transcripts are not yet available, the tax transcript request will be returned from the IRS and reflect “No Record Found”, the following must be provided:

• 2011 Tax Transcript showing “No record or return filed”; and,
• Copy of the 2011 Tax Return, and,
• For Salaried Borrowers: a 2009 and 2010 tax transcript, current paystub and 2011 W-2;
• For Self Employed Borrowers: a 2009 and 2010 transcript, and 2011 1040’s stamped received by local IRS office along with 2009 and 2010 tax returns.

Don’t worry about the transcripts.  Access Real Estate Lending’s Processing Team takes care of ordering and processing the forms, using the 4506-T form, through an IRS portal.

Common Scenario question:

Self Employed borrower has filed their 2011 returns (no transcripts available yet) and they need the 2011 income to qualify for the loan. (Yes) We can drop 2009 income and use 20010 and 2011 provided the 2011 increase is “reasonable.” In order to do this, we must have copies of 2010 tax returns STAMPED received by the local IRS office. Unfortunately the copy of Electronic filing of 2010 returns is not acceptable, a copy, of the 2011 returns, must be a stamped copy, from IRS office.

We will provide further direction the closer we get to April 15, 2012. At that time we can give guidance when borrowers are filing extensions and what will be required. This policy is subject to change as we receive direction from our investors.

What to Subcribe To:

Get Our Twitter Updates
Get Our Blog Blast
Become A Fan On Facebook
Connect With Us On Linkedin

Temporary Payroll Tax Cut

Market Conditions

The Temporary Payroll Tax Cut Continuation Act of 2001 has all investors and lenders going into a pricing tailspin. The response by investors to absorb the initial increase in guarantee fee was uniformly quick, but the impact on pricing and rate sheets is quite diverse because each investor has its own pricing model and structure. This has become clearly evident in our routine comparative analysis of our rates sheets against a select group of lenders. We anticipate that this will continue over the next 30 days as the April 1, 2012 effective date draws near.

Our rate sheet will be no exception to this turbulent trend. We thus encourage all our loan originators to pick up the phone and call Secondary Marketing, if any rate sheet pricing appears to be out of whack, or when a concession may be needed to make deals work.

Fannie Mae and Freddie Mac Pricing Changes Due to G-Fee Increase

CAPITAL MARKETS

January 2012
Fannie Mae and Freddie Mac Pricing Changes due to Guarantee Fee Increase

As you probably have gathered from the notices you have recently received from other wholesale lenders, investors have immediately implemented the increase in the Fannie Mae and Freddie Mac guarantee fee. We apologize and wish we could have given you more notice. The following schedule illustrates the timing of guarantee fee increase on 45, 30 and 15 day locks.

Lock Period

Price Change effective Date

45 days                                         1/11/2012
30 days                                         1/18/2012
15 days                                          1/23/2012

In addition, we need to temporarily adjust our lock extension and relock fees. Again, this is temporary until the new guarantee fee is completely absorbed. The following schedule illustrates the cost and timing of the our temporary relock and extension policies;

Expiration Date

Additional Extension/Relock Fee

Prior to 2/10/12 0                                                 0
After 2/10/12 50 bps                                         50 bps

As you will see, our pricing, relock and extension fee changes are consistent and in line with what you will see from other lenders.

The following are some FAQ’s that might help explain this:

Why is this occurring?
As directed by the Federal Housing Finance Agency (FHFA), pursuant to the Temporary Payroll Tax Cut continuation Act of 2001, Fannie Mae and Freddie Mac are required to increase the guarantee fee charged for all mortgages delivered on or after April 1, 2012 by 10 basis points. In the next few months, FHFA will further analyze whether additional guarantee fee increases are appropriate to ensure the new requirements of the law are being met.

What is a guarantee fee?
It is a fee charged by mortgage-backed securities (MBS) providers such as Fannie Mae and Freddie Mac, to lenders for bundling, servicing, selling and reporting MBS to investors. The main component of the guarantee fee is charged to protect against credit-related losses in the mortgage portfolio. Think of it as insurance. Commonly known in the mortgage industry as “g-fee”, this is a deduction in relation to the interest rate.

How does a 10 basis points increase in guarantee fee impact my borrower?
A 10 bp increase in g-fee effectively raises the interest rate to the borrower by 12.5 basis points. A 12.5 bp increase in rate generally translates to a 50 bp increase in fee or a 50 bp reduction in rebate. Since all investors have already implemented this increase in their respective pricing structures, you will be seeing the effect of this increase in the rate sheets published by all lenders.

What to Subcribe To:

Get Our Twitter Updates
Get Our Blog Blast
Become A Fan On Facebook
Connect With Us On Linkedin

Desktop Underwriter® (DU®) Enhancements

National Association of Home Builders/First American Improving Markets Index reports that the number of improving housing markets rose from 30 to 41 this past December, making it the 4thmonth in a row of expansion. 

In other recent real estate news, on January 3, 2012, Fannie Mae will be releasing updated Version 8.3 of Desktop Underwriter® (DU®) to implement enhancements to DU Refi Plus during the weekend of March 17, 2012.

Fannie Mae Desktop Originator/Underwriter Release Notes Update 

PDF Used from Fannie Mae

What to Subcribe To:

Get Our Twitter Updates
Get Our Blog Blast
Become A Fan On Facebook
Connect With Us On Linkedin