SS Memo 09-07

SELLING GUIDE REVISIONS: CONTACT UNDERWRITING

Date: June 24, 2009

Computer Conversion

Beginning on or about July 15th, Lenders will see a change in format for lock-ins and commitments. Attached are sample Lock-in Confirmation and Commitment Confirmations. The procedures for lenders to request lock-ins and commitments will remain unchanged.

Escrow for Completion
(Section 9001.06)

Recent reviews of Escrow for Completion accounts being held on AHFC single family loans has revealed that the escrow accounts are not being closed out as required by Section 9001.06 of the Selling Guide. 

To more closely monitor the Escrow for Completion accounts, AHFC will conduct annual audit reviews of the accounts. Beginning in September, Lenders will be notified in writing to submit the following information on open Escrow for Completion accounts to AHFC mortgage underwriting.

·         AFHC Commitment #
·         Borrower Name
·         Property Address
·         Account Balance
·         Brief summary of work to be completed
·         Escrow completion date

Lenders will be expected to describe steps being taken to close any escrows that have passed the completion date.

Credit Underwriting
(Part IV)

Memorandum 09-01 announced revisions to Part IV of the Selling Guide to clarify AHFC requirements for sound credit underwriting and to include a discussion of acceptable credit scores. A query of loan submissions since the date of the memorandum through the end of May revealed 50% had representative credit scores below 660 or no credit score at all. To insure that lender’s are adhering to the underwriting guidelines set forth in Part IV of the Selling Guide,  AHFC will call for a post purchase audit for all loan files where no credit score is available or the credit score is below 660. The lender’s file should clearly demonstrate that the loan’s credit profile is appropriate for delivery to AHFC.

FHA Refinances
(Section 7003.01)

Memorandum 09-03 announced that all FHA loans submitted to AHFC for commitment must be underwritten to AHFC Credit Guidelines. Effective immediately, Section 7003.01 is being revised to reflect that for an FHA insured refinance of a non-AHFC loan, a full credit package and appraisal is required and all AHFC limitations must be met.

Attachments

Attachments are available in PDF. Adobe Acrobat or Adobe Reader is required to read and print PDF files.

Sample - Lock-in Confirmation
Sample - Commitment Confirmation