NMLS STUDY CARDS (2020)
TRID (RESPA & TILA)
"Know Before you Owe"
2 laws that CFPB (Consumer Financial Protection Bureau) created
1. Dodd-Frank Act 2. Consumer Finance Protection Act
2 loans that don't need a downpayment
1. VA 2. USDA
What's the time something Negative will be on your credit report?
7 years UNLESS it's a bankruptcy and that's 10 years!
Insures Mortgages but doesn't buy them?
FHA!!!!!
Conforming Loans
Follow guidelines of regulators including Fannie Mae (FNML) and Freddie Mac (FMCC)
Purchase Money mortgage
High Cost Home loan
Front End (HER) and Back end (TOR) Ratio's
If a homeowner has a mortgage, the front-end DTI ratio is usually calculated as housing expenses (such as mortgage payments, mortgage insurance, etc.) divided by gross income. In contrast, a back-end DTI calculates the percentage of gross income going toward other types of debt like credit cards or car loans.
MDIA Act
Mortgage Disclosure Information Act - is part of Reg Z (TILA)
Tenure Method
Payment method used in REVERSE MORTGAGES so borrowers can receive a check
APR (Annual Percentage Rate)
The Effective Rate
1003
The Fannie Mae form used for the Universal Residential Loan Application (URLA) is the 1003 Also used by Freddie Mac (LU)
mortgage industry fraud
The person faces a maximum prison term of 30 years and a maximum fine of the greater of $1 million or twice the gain or loss resulting from the crime.
Do you count car leases on on DTI ratio?
YES! but if there's a car payment and it has 9 payments left you don't!
HPML(higher prices mortgage loans) require Reserve accounts?
yes - how much??
Fraud for Profit
"fraud for profit," aims to skim money off of the mortgage process itself, often through the use of inflated appraisals and bogus sales.
Fraud for Property
"fraud for property," involves deceptive practices by the borrower to either obtain a mortgage in the first place or obtain a mortgage they would not normally qualify for. Some consumers may regard the latter as minor "fudging," "stretching the truth" or "being creative" with their mortgage application, but in reality, it is still fraud and is still a felony under U.S. federal law.
RESPA (Real Estate Settlement Procedures Act)
-designed to allow buyers to compare the cost of services from different lenders or closing agent -require the disclosure of all settlement or closing costs using standing HUD-1 settlement statements which are given to borrowers Section 6 - Section 8 - Section 9 - Section 10 - escrow (No sham affiliated biz, sect 8- no kickbacks fee splits, ???
What's the excess amount for a reserve account? (respa)
1/12 (or 2 months in reserve???? So basically you will have your whole yearly escrow amount...you'll split that up by 12 for your monthly..it's basically saying you can't charge more than 1/12 the years amount so let's say it's $120 yearly...you can't charge someone $17/month for escrow
how long must ECOA disclosures be kept and why?
2 years 25 months?
TILA Disclosures timing on Reverse Mortgage?
3 business days The TILA-RESPA rule consolidates four existing disclosures required under TILA and RESPA for closed-end credit transactions secured by real property into two forms: a Loan Estimate that must be delivered or placed in the mail no later than the third business day after receiving the consumer's application, and a Closing .
HELOC - Rescission Rule
3 days (TILA - Reg Z)
Adjustable Rates Mortgage (ARM)
4 different types: 1. Interest-only (3-10 year long) 2. Payment option ARM* (u choose ur payment) - 2008! 3. Convertible ARM (from ARM to Fixed) 4. Hybrid ARM (Adjustable Fixed from 3/1 to 5/1) 4 Components: An ARM has four components: (1) an index, (2) a margin, (3) an interest rate cap structure, and (4) an initial interest rate period.
elderly
62+ for reverse mortgages
QM
A Qualified Mortgage (QM) is a defined class of mortgages that meet certain borrower and lender standards outlined in the Dodd-Frank regulation. ... If a lender makes a Qualified Mortgage available to you it means the lender met certain requirements and it's assumed that the lender followed the ability-to-repay rule. (Examples of a non-QM loan include interest-only or limited/alternative documentation loans.) the points and fees paid by the borrower must not exceed 3%
government-sponsored enterprise (GSE)
A government-sponsored enterprise (GSE) is a type of financial services corporation created by the United States Congress. ... For a comprehensive list of articles discussing Fannie Mae, Freddie Mac, and Government-Sponsored Enterprises, see Bibliography of Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are somewhat private and sponsored by the government and are referred to as government-sponsored enterprises (GSE).
Breaking a Joint Tenancy
A joint tenancy can be broken if one of the co-owners transfers or sells his or her interest to another person, thus changing the ownership arrangement to a tenancy in common for all parties. A tenancy in common can be broken if one of the following occurs: One or more co-tenants buys out the others The property is sold and the proceeds distributed amongst the owners A partition action is filed, which allows an heir to sell his or her stake. At this point, former tenants in common can choose to enter into a joint tenancy via written instrument if they so desire. This type of holding title is most common between husbands and wives and among family members in general since it allows the property to pass to the survivors without going through probate (saving time and money).
mortgage
A mortgage is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest. Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.
mortgagee
A mortgagee is a lender: specifically, an entity that lends money to a borrower for the purpose of purchasing real estate. In a mortgage transaction, the lender serves as the mortgagee and the borrower is known as the mortgagor.
Nominee Loan
A nominee loan is a loan where the proceeds are for the benefit of another and the lender is unaware of the other party.
Revising the LE? (under TILA-RESPA = TRID)
A revised loan estimate may only be provided if the original disclosures stated clearly and conspicuously that at any time prior to 60 days before consummation, the lender may issue revised disclosures. If no such statement is provided, the lender may not issue revised disclosures. Revised Loan Estimate Triggering Events Changed Circumstances Affecting Settlement Charges: If a changed circumstance causes an estimated settlement charge to increase beyond the regulatory tolerance limitations, the lender can issue a revised loan estimate as it relates to that charge. limit tolerance violations is to consider whether the increased fee triggers a revised loan estimate. The TRID rule sets out 6 events that allow using a revised loan estimate for purposes of re-setting fees and performing the good-faith analysis. Those 6 events include: 1. an increase to settlement charges 2. consumer's eligibility for the loan or the value of the property 3. Consumer-requested changes 4. Interest rate locks 5. Expiration of the original loan estimate 6. Construction loan settlement delays 10% tolerance item, the item increased must be added to the other fees in the 10% category. A revised loan estimate, for good faith purposes, would only be allowed if the cumulative tolerance increased by more than 10%.
Acquisition Cost
Acquisition Cost = TOTAL COSTS!! $ sales Price $ CLosing costs $ Points
PITI (principal, interest, taxes, and insurance)
Acquisition cost is always on the sale price Points/dp are on loan Nontaxable are always gross up 25% Rental income times by 0.75
LE - Loan Application form 65/1003 (URLA)
An "application" (URLA) is considered received upon the submission of the following six pieces of information: 1. The consumer's name; 2. The consumer's income; 3. The consumer's social security number to obtain a credit report; 4. The property address; 5. An estimate of the value of the property; and 6. The mortgage loan amount sought
a government insured loan
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, or FHA for short. Popular with first-time homebuyers, FHA home loans require lower minimum credit scores and down payments than many conventional loans. The Federal Housing Administration (FHA) is a loan insurance program associated with HUD. If a borrower defaults, FHA will insure the loan up to 100 percent of the lender's loss.
CFPB (Consumer Financial Protection Bureau)
CFPB gets responses from companies to resolve consumer issues and takes the information into account in supervisory and enforcement work. The CFPB has also released timely information on new programs aimed at helping struggling consumers during this time. These programs include student loan payment suspension; mortgage forbearance; stimulus payments; and the paycheck protection program. Additionally, the Bureau has a centralized webpage with information on how consumers can protect their finances during the pandemic.
4 c's when evaluating a loan application
Cash Collateral Capacity Credit (you could put character as well)
HUD Counselors
Clients must be offered at least 3 alternative loan products counselors may not receive referral fees for sending clients to the lender. The agency as a whole may receive compensation, but individual members of the agency may not.
What's the max loan amounts someone can obtain?
Conventional - FHA loan - vary (up to $765,600) VA - USDA -
MAP ACT
Deals most specifically with representation made in Mortgage Advertising
Reciprocity of education
Essentially, reciprocity is an agreement between states to recognize teaching credentials issued by each other. ... Many states, however, participate in teaching credential reciprocity agreements and will thus recognize your teaching credential if issued in another state. NMLS reciprocity of education means that NMLS approved credits in one state will apply to the NMLS credit hour requirements in other states.
What are the 4 credit bureaus?
Experian Equifax, TransUnion Innovis
FACT ACT - Section 113
FACT ACT - section 113 1. Truncate the Debit/credit info 2. Right to Place Credit Freeze 3. Secure & Dispose (shred/lockup) 4. Active Duty Alerts? (remember Identity movie - drop all identity)
FHFA vs FHA vs FCRA vs FACT ACT vs F
FHFA - Federal Housing Finance Agency FHA - Federal Housing Agency FHA - Fair Housing Act FCRA - Fair Credit Reporting Act FACT ACT -
HDMA was implemented by?
Federal Reserve Board's Regulation The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and was implemented by the Federal Reserve Board's Regulation C. On July 21, 2011, the rule-writing authority of Regulation C was transferred to the Consumer Financial Protection Bureau (CFPB)
Department of Housing and Urban Development (HUD)
Federal agency that has established rules and regulations that further interpret the practices affected by federal law; for example, HUD distributes an equal housing opportunity poster. Section 8 - a program to pay for rent HUD Secretary - Ben Carson
violating the SAFE Act
Fines for violating the SAFE Act and making unlicensed loans are $25,000 per incident. Criminal penalties include fines and imprisonment for up to 2 years. Actual damages available under the FTC Act. Enforcement authority vested in the bank regulatory agencies when banks are operators of Web sites or online services.
Flood insurance ((NFIP))
Flood Insurance must be purchased from the National Flood Insurance Program (NFIP).. In evaluating flood insurance terms, the risk of flood potential are identified by the Special Flood Hazard Area (SFHA). An SFHA is defined as the area that will be inundated by the flood event having a 1% chance of being equaled or exceeded in any giving year. The 1% annual chance flood is also referred to as the base flood or 100-year flood.. Zone A & V - High-risk flood zones - mandatory Zones B or X - Moderate flood zones - optional Zones C or X- Low-risk flood zones - not required
SAFE Act renewal education
For annual pre-licensure education, the SAFE Act requires state-licensed MLOs to complete: a. 3 hours of Federal law and regulations; b. 3 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues; c. 2 hours of training related to lending standards for the nontraditional mortgage product market; and d. 12 hours of undefined instruction on mortgage origination. For annual continuing education, the SAFE Act requires state-licensed MLOs to complete: a. 3 hours of Federal law and regulations; b. 2 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues; c. 2 hours of training related to lending standards for the nontraditional mortgage product market; and d. 1 hour of undefined instruction on mortgage origination.
INDEX/INDICES
Index is the COST OF THE MONEY!!! INDEX + MARGIN (banks cut) = FULLY INDEXED RATE (indices - teasor rate) COFI CMT LIBOR CODI PRIME
Joint Tenancy
Joint tenants, on the other hand, must obtain equal shares of the property with the same deed, at the same time. The terms of either a joint tenancy or tenancy in common are outlined in the deed, title, or other legally binding property ownership document. The default ownership for married couples is joint tenancy in some states, and tenancy in common in others
Tolerance levels deal with?
LE—>CD
Fair Credit and Reporting Act (FCRA) Reg V
Law that grants consumers to the right to know who requests to view their credit report over the past year FCRA was created by FACT ACT
Right of Survivorship
One of the main differences between the two types of shared ownership is what happens to the property when one of the owners dies. When a property is owned by joint tenants, the interest of a deceased owner gets transferred to the remaining surviving owners. For example, if three joint tenants own a house and one of them dies, the two remaining tenants each obtain a one-half share of the property. This is called the right of survivorship. Tenants in common have no rights of survivorship. Unless the deceased owner's will or other instrument specifies that their interest in the property is to be divided among the surviving owners, a deceased person's interest belongs to the estate.
FACT Act (114 Rules)
Primary role of preventing IDENTITY THEFT (GLBA - SPF!) Red Flags The regulation that requires creditor to verify the VALIDITY of the change of address received
Mortgage Call Report (MCR)
Quarterly
Fair Housing Act (FCA)
Redlining, Blockbusting (racial convincing) & Steering
TRID RULE and LE timing (keep them for 3 yrs!)
Revised loan estimate timing The TRID rule requires that the revised loan estimate be provided within 3 business days of receiving information supporting the need to revise. "Business day" is defined as any day the lender's offices are open for substantially all business functions. Therefore, lenders will need to determine whether Saturday is a business day for their institution. The window for issuing the revised loan estimate is short, so lenders must be on the alert for fee changes that trigger the ability to re-set tolerances. Note that with a revised loan estimate, there is no requirement to provide the revised document 7 business days before consummation - that timing rule only applies to the original loan estimate. However, the consumer must receive the revised loan estimate no later than 4 business days prior to consummation. And, the revised loan estimate cannot be provided on or after the date the closing disclosure is issued.
ARM's
START/INTIAL PERIODIC LIFE CAP Some ARM's allow higher rate changes at the 1st adjustment and then apply a periodic adjustment cap to future adjustments. 5/2/6 5% to beg, 2% periodic 6% MAX! (so 11% total max)??
Steering
Steering occurs when a mortgage loan originator offers a consumer only one option for mortgage terms instead of offering multiple choices.
Suspicious Activity Report (SAR)
Suspicious Activity Report (SAR) is a document that financial institutions, and those associated with their business, must file with the Financial Crimes Enforcement Network (FinCEN) whenever there is a suspected case of money laundering or fraud. These reports are tools to help monitor any activity within finance-related industries that is deemed out of the ordinary, a precursor of illegal activity, or might threaten public safety.
Who CREATED TILA?
THE FED! The Truth in Lending Act (TILA) is a federal law enacted in 1968 to help protect consumers in their dealings with lenders and creditors. The TILA was implemented by the Federal Reserve Board through a series of regulations. For loans covered under TILA, you have a right of rescission, which allows you three days to reconsider your decision and back out of the loan process without losing any money. This right helps protect you against high-pressure sales tactics used by unscrupulous lenders.
TILA Disclosures
TILA disclosures must be kept for 2 years (EXCEPT - LE is kept for 3 yrs and the CD is kept for 5 yrs)
CFPB's ATR/QM rule (almost all closed-end loans )
The ATR/QM rule requires you to make a reasonable, good-faith determination that a member has the ability to repay a covered mortgage loan before or when you consummate the loan. You must consider, at a minimum, 8 specific underwriting standards (1) current or reasonably expected income or assets; (2) current employment status; (3) the monthly payment on the covered transaction; (4) the monthly payment on any simultaneous loan; (5) the monthly payment for mortgage-related obligations; (6) current debt obligations, alimony, and child support; (7) the monthly debt-to-income ratio or residual income; and (8) credit history. Prior to the ATR/QM rule, Regulation Z, which implements the Truth in Lending Act (TILA), prohibited a creditor from making a higher-priced mortgage loan without regard to the member's ability to repay the loan. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended TILA to adopt similar Ability-to-Repay (ATR) requirements for virtually all closed-end mortgage loans. The Dodd-Frank Act also provides a presumption of compliance with ATR requirements and protections from legal liability for a certain category of mortgages, called Qualified Mortgages (QMs). CFPB adopted a rule to implement the Dodd-Frank Act ATR/QM provisions. The rule also implements other Dodd-Frank Act provisions requiring you to retain records for a minimum of three years after consummation to demonstrate you complied with the ATR/QM rule and restrictions on prepayment penalties for QM loans. BUT!!!! The rule does not apply to: 1. home equity lines of credit, or HELOCs); 2. Time-share plans; 3. Reverse mortgages; 4. Temporary or bridge loans with terms of 12 months or less (with possible renewal); 5. A construction phase of 12 months or less (with possible renewal) of a construction-to-permanent loan; 6. Consumer credit transactions secured by vacant land; 7. Loan modifications (as opposed to certain types of refinancings).
The Bank Secrecy Act (BSA)
The Bank Secrecy Act (BSA) is U.S. legislation aimed toward preventing criminals from using financial institutions to hide or launder money. The law requires financial institutions to provide documentation to regulators whenever their clients deal with suspicious cash transactions involving sums over $10,000.
Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (FCRA) is a federal law that regulates credit reporting agencies and compels them to ensure the information they gather and distribute is a fair and accurate summary of a consumer's credit history.
What law states you can get a free credit report
The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.
HOEPA (part of TILA - Z)
The Home Ownership and Equity Protection Act (HOEPA) was enacted in 1994 as an amendment to the Truth in Lending Act (TILA) to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees. Section 32 - High Cost Loan Section 35 - High Priced Loan
Loan Estimate (TILA)
The Loan Estimate tells you important details about the loan you have requested. The lender must provide you a Loan Estimate within 3 business days of receiving your application. estimated interest rate, monthly payment, and total closing costs taxes and insurance, and how the interest rate and payments may change in the future. penalties or increases (negative amortization). When you receive a Loan Estimate, the lender HAS NOT yet approved or denied your loan application. If you decide to move forward, the lender will ask you for additional financial information. (not with Reverse Mortgages!)
MLO License Required via The Safe Act
The SAFE Act specifically prohibits an individual employed by an agency-regulated institution from engaging in the business of residential mortgage loan origination without first obtaining and maintaining annually a registration as a registered mortgage loan originator and obtaining a unique identifier. The SAFE Act requires that state-licensed Mortgage Loan Originators (MLOs) pass a written qualified test with a score of 75% or better, complete at least 20 hours of pre-licensing education courses, and take eight hours of annual continuing education courses.
Uniform Residential Loan Application
The Uniform Residential Loan Application, also known as a Fannie Mae Form 1003 or just a 1003 form, is a standard form that contains all the information necessary for a lender to establish the risk profile of a borrower. ... There is room on the form for co-borrower information in the case of joint credit.
Ability to Pay
The final rule implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for "qualified mortgages." The final rule also implements section 1414 of the Dodd-Frank Act, which limits prepayment penalties. Finally, the final rule requires creditors to retain evidence of compliance with the rule for three years after a covered loan is consummated.
Who Needs Flood Insurance? when is it mandatory?
The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water). V Zones According to FEMA and the National Flood Insurance Program, any building located in an A or V zone is considered to be in a Special Flood Hazard Area, and is lower than the Base Flood Elevation. V zones are the most hazardous of the Special Flood Hazard Areas. V zones generally include the first row of beachfront properties. The hazards in these areas are increased because of wave velocity - hence the V designation. Flood insurance is mandatory in V zone areas. Living in a V Zone If your home is in a "V" zone (this includes VE and V-1-V-30), adhere to the following recommendations: The bottom of the lowest horizontal structural member of the lowest floor elevation must be at or above the Base Flood Elevation (BFE). Enclosed areas below the lowest floor cannot be used for living space. The building must be elevated on piles, piers, posts or column foundation. Electrical, heating ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE. A Zones A zones - the next most volatile of the Special Flood Hazard Areas - are subject to rising waters and are usually near a lake, river, stream or other body of water. Flood insurance is mandatory in all A zones because of the high potential of flooding. A-zone maps also include AE, AH, AO, AR and A99 designations, all having the same rates. The different A zones are named depending on the way in which they might be flooded. Living in an A Zone If your home is in an A zone (includes AE, A1-A30, AH, AO, AR) follow these important recommendations: The lowest floor elevation must be at or above the Base Flood Elevation (BFE). Enclosed areas below the lowest floor cannot be used for living space. Electrical, heating, ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE. Other Zones X zones are minimal-risk areas where flood insurance is not mandatory. D zones are areas that have not been studied, but where flooding is possible.
USA PATRIOT Act
The purpose of the USA PATRIOT Act is to deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and other purposes, some of which include: To strengthen U.S. measures to prevent, detect and prosecute international money laundering and financing of terrorism; To subject to special scrutiny foreign jurisdictions, foreign financial institutions, and classes of international transactions or types of accounts that are susceptible to criminal abuse; To require all appropriate elements of the financial services industry to report potential money laundering; To strengthen measures to prevent use of the U.S. financial system for personal gain by corrupt foreign officials and facilitate repatriation of stolen assets to the citizens of countries to whom such assets belong.
CRA - Credit Reinvestment Act
The regulator designed to help meet the needs of the communities in which it operates (if a bank is going to be inside a community - then it needs to give back)
Straw Buyer
The straw buyer is a person who applies for a mortgage and makes a home purchase on behalf of another. The actual buyer maybe someone with bad credit who is unable to qualify for a mortgage themselves, or a scam artist looking to profit by manipulating the mortgage and real estate transaction process. transferred to the actual buyer through a quitclaim deed; the actual b actual buyer must then keep up on the mortgage payments to avoid foreclosure. It's considered fraudulent because the lender is not aware that the actual buyer is a dubious credit risk. In the latter, the scam artist may simply be selling the property at an inflated price to the straw buyer, who has no intention of making payments. (see property flipping, above.) Straw buyers are frequently people with clean credit but little money of their own. They are often willing to be paid to accept the risk that the actual buyer will default and ruin their credit, or are desperate for money and willing to ruin their credit in return for an immediate payoff.
toolkit
The toolkit helps you calculate how much you can afford for a home, gives you questions to ask your lender, and features worksheets and checklists to fill out during the process. "Your Home Loan Toolkit" is a resource we revised to help make the mortgage process more understandable. The toolkit is a booklet associated with the TILA RESPA Integrated Disclosure Rule (TRID). It replaces the "RESPA Special Information Booklet."
How long must a appraiser keep a appraisal for?
USPAP requires that an appraiser retain a work file for each appraisal for a period of 5 years after the appraisal was prepared or - at least 2 years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, - whichever period expires last.
a Good Faith Estimate (GFE) and an initial Truth-in-Lending disclosure
Used with Reverse Mortgages (If you are applying for a HELOC, a manufactured housing loan that is not secured by real estate, or a loan through certain types of homebuyer assistance programs, you will not receive a GFE or a Loan Estimate, but you should receive a Truth-in-Lending disclosure.)
regulation "H"
When authority for the SAFE Act was transferred from HUD to the CFPB, the CFPB changed the name for the SAFE Act to regulation "H" for non-depository institutions and regulation "G" for depository institutions.
Tenancy in Common
While none of the owners may claim a specific area of the property, tenants in common may have unequal shares and different ownership interests. For instance, Tenant A and Tenant B may each own 25% of the home, while Tenant C owns 50%. Tenancies in common also may be obtained at different times, so an individual may get an interest in the property years after one or more other individuals have entered into a tenancy in common ownership. Tenants in common have no rights of survivorship. Unless the deceased owner's will or other instrument specifies that their interest in the property is to be divided among the surviving owners, a deceased person's interest belongs to the estate.
upfront funding fee
You are exempt from paying the VA funding fee if you meet one of the following criteria: You're a veteran receiving VA disability pay for a service-connected disability. You're a veteran who would be entitled to receive disability pay for a service-related disability if you weren't receiving retirement or active-duty pay.
INTEREST RATE
also known as Nominal Rate and The Note Rate
Residual income requirements for VA
at or above income of $80k: VA Mortgages : Minimum Residual Income Family size of 1 : $450. Family size of 2 : $755. Family size of 3 : $909. Family size of 4 : $1,025. Family size of 5 : $1,062. For each additional family member, add $80 up to a family of 7. Residual income is a major reason why VA loans have such a low foreclosure rate, despite the fact that about 9 in 10 people purchase without a down payment. The heart of this is discretionary income. Residual income looks at how much money you have leftover each month after all of your major expenses are paid. Those leftovers cover things like gas, food, clothing and other typical family needs. Income Variable Calculation Gross monthly income=$5,000 Installment loans (ex: auto & student loans)-$800 Revolving loans (ex: credit cards)-$100 Child care/child support/alimony-$300 Full monthly mortgage payment-$1,200 Estimated utility costs-$280 Estimated residual income=$2,200
Sellers Contributions
based upon the acquisition cost Conventional $5k FHA 6% VA 4% USDA ?%
Fair Housing Act of 1968 - FHA (a.k.a. Title VIII of the Civil Rights Act)
prohibited discrimination concerning the sale, rental and financing of housing based on race, religion, national origin or sex. Intended as a follow-up to the Civil Rights Act of 1964, the bill was the subject of a contentious debate in the Senate, but was passed quickly by the House of Representatives in the days after the assassination of civil rights leader Martin Luther King, Jr. The Fair Housing Act stands as the final great legislative achievement of the civil rights era. Monitored by HUD President Johnson signed
mortgagor
the borrower of a mortgage
when to give a disclosure
when issuing a re-disclosure (CD) is that when it should be GIVEN to the borrower 4 days before closing with 3 days to revise and 1 day to close - total of 7 days
