USDA Rural Housing 2012 Income Limits Published

The 2012 Income Limits for USDA RD home loans have been published.  Effective  January 18, 2012.  USDA’s  and the Income Eligibility calculator in the Eligibility website (http://eligibility.sc.egov.usda.gov) has been updated to use the new income limits.

USDA Rural Development Annual Fee Payments

 All section 502 guaranteed loans require a 0.3 percent annual fee effective October 1, 2011.  Some lenders have attempted to pay a portion of the annual fee payment in advance.    USDA will bill lenders annually or when the loan is paid off.  USDA will bill lenders for the fee 12 months from the date the loan funded.

• For example, if a loan was closed October 25, 2011, the first annual fee will be billed by the Agency and due on November 1, 2012.  The first billing for the annual fee will be in October 2012 and will be due November 1, 2012.

Lenders should collect 1/12 of the annual fee on a monthly basis into an escrow account, until billed by USDA Rural Development.

USDA has its guarantee up-front and annual fee calculator it will be posted on the USDA LINC website identified below.  This version corrects the annual fee payment date information and is the most current version to utilize. 

https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do

Know Before You Owe: Closer to Closing — Testing, Testing ….

The Consumer Finance Protection Bureau has begun testing two new forms to replace the current HUD-1 and Final TIL, which integrate the existing forms into one consumer user friendly form.

The Bureau is seeing feedback on which of the two designs works best.  To see examples go to:  http://www.consumerfinance.gov/knowbeforeyouowe/  and share your thoughts.

Unlike previous changes that have impacted mortgage brokers and bankers, the Bureau is seeking input on the forms, the process and how functionality of disclosures.  The new forms are being tested in Birmingham Alabama.  To have your say go to:

http://www.consumerfinance.gov/knowbeforeyouowe/

• Which design works best? Why?
• Is the information presented in a consumer-friendly format?
• Could consumers easily identify key loan terms and closing costs?
• Does the disclosure cover all the important information you need?
• Is the document easy for lenders and settlement agents to use?

2012 USDA Refinance Fees

EFFECTIVE Wednesday, December 7, 2011: The upfront guarantee fee for all refinance transactions increased from 1 percent to 1.5 percent at this time.
Conditional Commitments for refinance transactions that have previously been issued by USDA “subject to the receipt of commitment authority” at the 1 percent upfront guarantee fee structure will be honored by the Agency once the commitment authority becomes available.
Effective Wednesday, December 7, 2011, new Conditional Commitment requests for a refinance transaction will be issued by the Agency utilizing a 1.5 percent upfront guarantee fee and a 0.3 percent annual fee. The new fee structure for FY12 is as follows:
•2 percent upfront guarantee fee for purchase transactions;
•1.5 percent upfront guarantee fee for refinance transactions; and
•0.3 percent annual fee for both purchase and refinance transactions.

Mortgage Market Update

Good morning,

We are seeing unprecedented trading in the MBS markets this morning and traders as well as Tier One lenders have been struggling to come up with prices to convert to mortgage rates-we will have pricing posted as soon as possible however the lock desk may be delayed slightly from the 11am ET start time to allow some consensus to be built in the markets.

MBS is trading up 24 ticks after the huge run up late yesterday so expect some improvement once pricing is established.

 

Thank you,

Mike Brown

Capital Markets