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Regulatory Updates

Bank Printouts

Oftentimes, a borrower looks to submit online web histories or bank teller printouts in lieu of standard bank statements. Should you wish to do this, please be sure your web history and/or bank teller printouts meet all of the following underwriting criteria:

Print-outs from Internet or Bank

Print outs provided by the bank must be (1) signed by the bank employee, and (2) either stamped by the bank or accompanied by the employee’s business card, plus (3) clearly identify:

  • The account holder(s) to be the same as the borrower(s),
  • Full account number,  and
  • Name of financial institution.

Internet print outs must clearly identify:

  • The account holder(s) to be the same as the borrower(s),
  • Full account number,  and
  • URL from bank website

NOTE: When bank print outs are used to update accounts or verify additional assets, they must show dates that are consecutive to the statements in the file.  For example, if the bank statement ends 11/30/2010 the printout must start 12/01/2010. Gaps in the dates are not permitted. Beyond that, if used for updating since the last statement, a partial account number is OK as long as it can be tied back to the full account number on the monthly statement that is already on file here at Envoy.

Hidden Mortgage Tax Takes Effect Soon

Did you know that late last month (12/23/2011) our Congress and President passed into law the Temporary Payroll Tax Cut.

That’s great news, right?!

Not so fast…Did you know that they decided to fund this Temporary Payroll Tax Cut via guaranty fee increases by Fannie Mae and Freddie Mac?  What they didn’t realize is that they have, in effect, now put a tax on all potential new homeowners and existing homeowners who borrow money through the traditional channels here in Wisconsin, California and, well, America, frankly, to subsidize payroll tax cuts for all.

The mandated increase is 10bps (0.1%) to the interest rate –  which will equate to a worse price (fees) somewhere in the 30-50bps (0.3% to 0.5% of the loan amount) neighborhood  to my customers – to you – when comparing costs/rates before the change to those same numbers after the change!  This goes into effect on all Mortgage Backed Securities* issued on or after April 1st (per Fannie Mae guide announcement 2011-14) thus we will all be seeing the cost of buying a home  increase very soon.

*This requirement is effective for securities issued on or after April 1, 2012. Thus, for Envoy and the entire lending community, it basically becomes effective in the next week or so, since most locks being taken now will not fund for another 30 days or so, which, in turn will be pooled into April securities.

Update 1/6/2012: The pricing adjustment will be 0.45% to the fees or 0.125% to the rate. This will take effect for all locks executed on or after 1/9/2012 for locks 45 days or longer and on 1/16/2012 for locks 30 days or less.