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?

Columbus Day

Monday, October 10^th is Columbus Day, a federal holiday.  Stonegate Mortgage Corporation offices will be open, however bond market and most if not all banks are closed for the day. 

 As such there will be no funding of loans Monday October 10^th, and the lock desk will not be open.

Most importantly, as a federal holiday, Monday October 10^th cannot be counted as a rescission day for refinance loan closing purposes. 

Lock expirations falling on a weekend or holiday “roll” to the next business day, however we remind you to check your expiration dates to account for the non-rescission day and shorter week in your loan funding schedules.

USDA Rural Housing Availability of Funds

Stonegate Mortgage has received word from USDA that funds for USDA refinance transactions are not available, at this time.  USDA refinances may be originated, processed, underwritten and submitted to USDA for a conditional commitment.  However, these loans may not close until funds are available again.

USDA’s fiscal year ended September 30, 2011.  The word from USDA is that funds should be available the latter part of October.  We hope this is a short lived issue.  When we get word that funds are available again, we will begin closing refinance transactions.

Purchase transactions are still able to close, as there is no shortage of funds for purchases.

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