Archive for May, 2010

Veterans Benefits Administration References

Web Automated Reference Material System (WARMS)

Lender’s Handbook
VA Pamphlet 26-7 (Revised)

Table of Content
Current Issues

Chapter 1 – The Lender
Chapter 2 – Veterans Eligibility and Entitlement
Chapter 3 – The VA Loan and Guaranty
Chapter 4 – Credit Underwriting
Chapter 5 – How to Process VA Loans
Chapter 6 – Refinancing Loans
Chapter 7 – Loans Requiring Special Underwriting, Guaranty and Other Considerations
Chapter 8 – Borrower Fees and Charges and the VA Funding Fee
Chapter 9 – Legal Instruments, Liens, Escrows and Related Issues
Chapter 10 – Property Eligibility and Appraisal Requests
Chapter 11 – Appraiser Requirements
Chapter 12 – Minimum Property Requirements
Chapter 13 – Value Notices
Chapter 14 – Construction Inspections
Chapter 15 – Lender Appraisal Processing Program
Chapter 16 – Common Interest Communities, Condominiums and Planned Unit Development
Chapter 17 – VA Sanctions Against Program Participants
Chapter 18 – Servicer Appraisal Processing Program (SAPP)

Appendix A – Listing of VA Offices

Change 1 Change 2 Change 3 Change 4 Change 5 Change 6 Change 7
Change 8 Change 9 Change 10 Change 11 Change 12 Change 13


CalHFA has gone mobile!

CalHFA just launched two mobile apps to help you on the go!

Find a CalHFA-approved Lender or even locate a CalHFA REO property directly from your cell phone.
We are also working on more apps to be launched later this year, including a Mortgage Calculator and a CalHFA Qualifier Tool.

To visit the mobile site all you need to do is use your cell phone to navigate to our web site,, and you’ll be automatically directed to our mobile apps.


The HUD Industry Conference Call scheduled for Thursday,


The HUD Industry Conference Call scheduled for Thursday, May 27th, regarding Mortgagee Letter 2010-18, has been cancelled.

HUD has received a tremendous response from the Industry regarding Mortgagee Letter 2010-18, Update of Property and Preservation Requirements and Cost Reimbursement Procedures. Since the effective date of Mortgagee Letter 2010-18 has been changed to July 13, 2010, we would like to continue to collect your questions and comments; therefore we are cancelling the Industry Conference Call scheduled for Thursday May 27th and we will reschedule at a later date.

We appreciate the feedback that we have received from the industry and we encourage you to continue to submit your questions regarding this Mortgagee Letter and the P&P process. Please send your feedback and suggestions to:

Once we have compiled a list of questions, comments and answers we will publish this document for the industry to review. After this, we will decide on the most suitable method of communication to assist you with implementation of this new guidance. For more information please visit:


RB 37-54

Appraisal Abuse Red Flags

No appraisal or property evaluation in file.

Mortgage broker or borrowers that always use the same appraiser.

Appraiser bills association for more than one appraisal when there is only one in the file.

Unusual appraisal fees (high or low).

No history of property or prior sales records.

Market data located away from subject property.

Unsupported or unrealistic assumptions relating to capitalization rates, zoning change, utility availability, absorption, or rent level.

Valued for highest and best use, which is different from current use.

Appraisal method using retail value of one unit in condo complex multiplied by the number of units equals collateral value.

Use of superlatives in appraisals.

Appraisal made for borrower.

Appraisals performed or dated after loan.

Close relationship between builder, broker, appraiser, lender and/or borrower.

Overvalued (inflated) or high property value.


FEMA earthquake publications

Dear Colleague:

The Department of Homeland Security and Federal Emergency Management Agency (FEMA) are pleased to announce that the following compilations of are now available, at no cost, from the Publications Warehouse.

Earthquake Publications for Teachers and Kids, FEMA P-710CD
Educational resources (posters, teacher packages, a storybook for children, hands-on activities, and guidance) for teachers, students, and child care providers. All of the publications included on the CD are listed in the Teachers and Kids section of the Catalog of FEMA Earthquake Resources, FEMA P-736 (FEMA 159, 240, 253, 527, 529, and 531). Two additional publications are also included: Earthquake Safety Checklist, FEMA 526, and Earthquake Home Hazard Hunt Poster, FEMA 528.

Earthquake Publications for Individuals and Homeowners, FEMA P-711CD
Resources (guides and safety checklists) to help individuals, families, and homeowners prepare for an earthquake and prevent earthquake damage to their homes. The CD includes all of the publications listed in the Individuals and Homeowners section of the Catalog of FEMA Earthquake Resources, FEMA P-736 (FEMA 74, 232, 526, 528, 530, and Are You Ready? An In-depth Guide to Citizen Preparedness). The CD also includes the Drop, Cover, and Hold Poster, FEMA 529, and The Adventures of Terry the Turtle and Gracie the Wonder Dog, Grades 3 through 6, FEMA 531.

Earthquake Publications for Community Planners and Public Policy Makers, FEMA P-712CD
Resources for local planners, policy makers, and advocates interested in reducing the risks posed by seismic hazards to their communities. Seven of the publications are offered separately in the Catalog of FEMA Earthquake Resources, FEMA P-736 (FEMA 83, 84, 154, 266, 275, 366, and 474). Also included on the CD are Seismic Retrofit Incentive Programs: A Handbook for Local Governments, FEMA 254, and a series of mitigation planning “how-to” guides (FEMA 386-1 through 386-8) applicable to earthquakes and other hazards.

To order your copy of FEMA P-710CD, FEMA P-711CD, or FEMA P-712CD from the Publications Warehouse, call 1(800) 480-2520 or fax your request to (240) 699-0525.

To view or download these publications, please visit the FEMA Library.

To view or download other National Earthquake Hazards Reduction Program (NEHRP) publications and products or to sign up for updates on earthquake risk mitigation publications, news, and events, visit Earthquake Publications and Tools.


Fannie Mae and Freddie Mac Introduce Uniform Approach to Mortgage Loan and Appraisal Data Collection

Fannie Mae and Freddie Mac Introduce Uniform Approach to Mortgage Loan and Appraisal Data Collection
The Federal Housing Finance Agency (FHFA) has announced that, under its direction, Fannie Mae and Freddie Mac are working together to implement uniform appraisal and other loan delivery data standards, as well as to develop a joint appraisal data delivery system for the single-family loans they purchase and/or securitize. In response, Fannie Mae and Freddie Mac have announced the Uniform Mortgage Data Program (UMDP) to provide common requirements for appraisal and loan delivery data.

Under the umbrella of our Loan Quality Initiative (LQI), Fannie Mae previously announced that we would require electronic submission of appraisal data, require additional data about the loan at delivery, and transition to the industry-standard MISMO format for delivery of loan data. The UMDP does not replace the LQI, but rather it implements two of our LQI objectives — electronic submission of appraisal data and collection of additional loan data in an updated format — through a uniform approach with Freddie Mac.

For details, including implementation dates, refer to the UMDP Overview, FAQs, and other resources on


Independent Valuation Protection Institute

Independent Valuation Protection Institute
The Independent Valuation Protection Institute is being created pursuant to the Home Valuation Code of Conduct.
The Home Valuation Code of Conduct is a product of negotiations between the New York Attorney General, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac. Its goal is to improve accuracy and independence in the real estate appraisal process and to provide additional protections for homebuyers, mortgage investors and the United States housing market.

The Independent Valuation Protection Institute is intended to implement the Home Valuation Code of Conduct.


Basic information about the Independent Valuation Protection Institute
The Independent Valuation Protection Institute is to be established to maintain the integrity of HVCC by monitoring and studying federal and state laws and regulations as well as market practices and standards.

The Independent Valuation Protection Institute is to be headed by a Board of Directors. The Board is to consist of experts in the fields of real estate finance, loan origination, law enforcement, compliance review and real estate valuation and appraisal. Members of the Board may not have financial connection to Fannie Mae or Freddie Mac.

The Independent Valuation Protection Institute is to be funded primarily by Fannie Mae and Freddie Mac for a period of not less than five years.

Appraisers will be able to contact the Independent Valuation Protection Institute if they feel pressured, threatened or bribed into situations that compromise their independent valuation(s) and compliance with HVCC.

The Independent Valuation Protection Institute will mediate incoming complaints and concerns to the appropriate federal and state regulators and in some cases, may even forward complaints to federal law enforcement agencies when warranted.

A hotline number and email address is to be established and provided for consumers to contact if they believe the appraisal process has been tainted or if they have been affected by appraisal fraud.

The New York Attorney General’s Office and the Office of Federal Housing and Enterprise Oversight (OFHEO) will approve membership of the Board members and the Independent Valuation Protection Institute may be affiliated with existing academic, professional and/or industry organizations.

As the Independent Valuation Protection Institute begins its work, we will have more information available here.

Federal Housing Finance Agency Fannie Mae Freddie Mac

Comments (1)

COST V VALUE-What’s New in the 2008-09 Report?

What’s New in the 2008-09 Report?
New Name
In the past, the Report name has always contained the year in which the data was gathered. But because the data aren’t published until November, people who come upon the Report in January or later often conclude, mistakenly, that they are looking at out-dated results. We hope that the new naming convention will clear up any confusion. (Titles of archival reports will not be changed.)

New Project
This year’s Report reshuffles the two existing deck projects and introduces a third. The basic wood deck project stays the same, but the composite deck that was listed as “upscale” in 2007 is now reclassified as a “midrange” project. This makes it much easier to compare composite and pressure-treated wood decking and railing because the two midrange projects are identical in all other respects. The new upscale deck project, which is the only new project introduced this year, specifies composite materials, but also increases the dimensions of the deck and adds design complexity and accessories. (Complete project descriptions are available by clicking on any project name in the data tables.)

New Cities
We have added 22 cities to this year’s Report, increasing the total number of cities surveyed from 60 to 80. The seeming anomaly in the arithmetic stems from adjustments made to conform to U.S. Census reclassifications of MSAs (Metropolitan Statistical Areas) into CBSAs (Core Base Statistical Areas). This involved consolidating four cities into two: Philadelphia now includes Wilmington, Del.; and Denver now includes Colorado Springs. And if you are looking for Norfolk, it has been renamed Virginia Beach, also to conform to Census reclassifications. By aligning Cost vs.Value data with U.S. Census standards, we are better able to compare and cross-reference statistics between the two sources. (There are just 79 cities in the 2008–09 Report. We omitted results for Portland, Maine, due to incorrect cost data in the questionnaire. Portland will be included next year.)

New cities were added based on a variety of factors, including U.S. Census Bureau population estimates, availability of ancillary data (such as construction costs and median home prices), and the number and proximity of other cities in the same state or general geographic area. Some cities that would otherwise qualify for inclusion are, in fact, omitted from the Report because they are close in size and median home value to another city in the same geographic area. In that case, the other city was either a legacy city or the larger of the two.

New Commentary
We asked remodelers and Realtors for their reactions to the Cost vs. Value results, and about trends they are seeing in the marketplace. Their comments cover a range of topics, from kitchen and bath trends, to energy improvements, to downsizing square footage, to the value of low-cost replacement projects, and more. To read these stories, click here.


Regulation Z

§ 226.36 Prohibited acts or practices in connection with credit secured by a consumer’s principal dwelling.

(a) Mortgage broker defined. For purposes of this section, the term “mortgage broker” means a person, other than an employee of a creditor, who for compensation or other monetary gain, or in expectation of compensation or other monetary gain, arranges, negotiates, or otherwise obtains an extension of consumer credit for another person. The term includes a person meeting this definition, even if the consumer credit obligation is initially payable to such person, unless the person provides the funds for the transaction at consummation out of the person’s own resources, out of deposits held by the person, or by drawing on a bona fide warehouse line of credit.

(b) Misrepresentation of value of consumer’s dwelling–(1) Coercion of appraiser. In connection with a consumer credit transaction secured by a consumer’s principal dwelling, no creditor or mortgage broker, and no affiliate of a creditor or mortgage broker shall directly or indirectly coerce, influence, or otherwise encourage an appraiser to misstate or misrepresent the value of such dwelling.

(i) Examples of actions that violate this paragraph (b)(1) include:

(A) Implying to an appraiser that current or future retention of the appraiser depends on the amount at which the appraiser values a consumer’s principal dwelling;

(B) Excluding an appraiser from consideration for future engagement because the appraiser reports a value of a consumer’s principal dwelling that does not meet or exceed a minimum threshold;

(C) Telling an appraiser a minimum reported value of a consumer’s principal dwelling that is needed to approve the loan;

(D) Failing to compensate an appraiser because the appraiser does not value a consumer’s principal dwelling at or above a certain amount; and

(E) Conditioning an appraiser’s compensation on loan consummation.

(ii) Examples of actions that do not violate this paragraph (b)(1) include:

(A) Asking an appraiser to consider additional information about a consumer’s principal dwelling or about comparable properties;

(B) Requesting that an appraiser provide additional information about the basis for a valuation;

(C) Requesting that an appraiser correct factual errors in a valuation;

(D) Obtaining multiple appraisals of a consumer’s principal dwelling, so long as the creditor adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value;

(E) Withholding compensation from an appraiser for breach of contract or substandard performance of services as provided by contract; and

(F) Taking action permitted or required by applicable federal or state statute, regulation, or agency guidance.

(2) When extension of credit prohibited. In connection with a consumer credit transaction secured by a consumer’s principal dwelling, a creditor who knows, at or before loan consummation, of a violation of paragraph (b)(1) of this section in connection with an appraisal shall not extend credit based on such appraisal unless the creditor documents that it has acted with reasonable diligence to determine that the appraisal does not materially misstate or misrepresent the value of such dwelling.

(3) Appraiser defined. As used in this paragraph (b), an appraiser is a person who engages in the business of providing assessments of the value of dwellings. The term “appraiser” includes persons that employ, refer, or manage appraisers and affiliates of such persons.

(c) Servicing practices. (1) In connection with a consumer credit transaction secured by a consumer’s principal dwelling, no servicer shall–

(i) Fail to credit a payment to the consumer’s loan account as of the date of receipt, except when a delay in crediting does not result in any charge to the consumer or in the reporting of negative information to a consumer reporting agency, or except as provided in paragraph (c)(2) of this section;
(ii) Impose on the consumer any late fee or delinquency charge in connection with a payment, when the only delinquency is attributable to late fees or delinquency charges assessed on an earlier payment, and the payment is otherwise a full payment for the applicable period and is paid on its due date or within any applicable grace period; or

(iii) Fail to provide, within a reasonable time after receiving a request from the consumer or any person acting on behalf of the consumer, an accurate statement of the total outstanding balance that would be required to satisfy the consumer’s obligation in full as of a specified date.

(2) If a servicer specifies in writing requirements for the consumer to follow in making payments, but accepts a payment that does not conform to the requirements, the servicer shall credit the payment as of 5 days after receipt.

(3) For purposes of this paragraph (c), the terms “servicer” and “servicing” have the same meanings as provided in 24 CFR 3500.2(b), as amended.

(d) This section does not apply to a home equity line of credit subject to § 226.5b.

[Codified to 12 C.F.R. § 226.36]

[Section 226.36 added at 73 Fed. Reg. 44604, July, 30, 2008, effective October 1, 2009]

§ 226.37–226.45 [Reserved]

Subpart F—Special Rules for Private Education Loans



In today’s letter, DeMarco informed the Attorney Generalrnthat Fannie Mae and Freddie Mac, both of which are operating under a federalrnconservatorship, will no longer be funding the Independent Valuation Protection Institute.

DeMarco said, “As conservator of Fannie Mae and FreddiernMac, our priority is to keep the Enterprises focused on the important role theyrnplay in supporting the mortgage market. rnThe need for a complaint process is being addressed in a way that wernbelieve is more practical than with the Institute.”

He cited “the billions of dollars in taxpayer funds thernEnterprises have drawn since entering conservatorships” and said herncannot, as conservator, justify the Enterprises funding the Institute. Therefore, he said, he has determined thatrnthey will not proceed with that portion of the Cooperation Agreements.

In lieu of the Institute, DeMarco has directed thernEnterprises to provide a targeted complaint process for violations of HVCC. Freddie and Fannie will use arnstandardized complaint form and process to facilitate submission of the formrnthrough an Internet-based process. ThernEnterprises will act on matters received, will refer cases to state regulatoryrnagencies where appropriate, identify practices suggestive of fraud orrnnon-compliance with the Code and provide a summary of results to FHFA and Cuomo’srnoffice. The process will be in place in a matter of weeks.

New York’s Attorney General has a reputation as a, shall wernsay, aggressive and tenacious law enforcement officer. It will be interesting to see his reaction tornFHFA’s unilateral change to the Agreements.



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