HUD Issues Mortgagee Letter 99-38 increasing loan limits. HUD
has issued Mortgagee Letter 99-38, which contains a comprehensive list of new loan limits for all areas of the country. FHA loan limits were adjusted as a result of the recent increases in the Freddie Mac conforming
loan limits. Mortgagee Letter 99-38 also corrects the loan limits that were reduced last year for 2, 3 and 4 unit properties located in certain areas. The new loan limits are effective for mortgages insured on or after
January 1, 2000. A copy of the Mortgagee Letter may be obtained from MBA’s website at www.mortgagebankers.org - click
on Residential Finance. Contact
Bud Carter at (202) 861-8194.
VA Issues Circular 26-99-20 – "Paperless" processing of LGCs. VA has announced the availability of an Electronic Data Interchange (EDI) process to enable lenders to
electronically submit VA loans for guaranty and receive back electronically generated Loan Guaranty Certificates (LGCs) within two business days. At the time the LGC is electronically generated, the lender will be
notified if the case has been selected for review by the VA and must be submitted to the agency. The VA views this EDI process as a significant opportunity for both lenders and the VA to move toward a
"paperless" processing environment. Lenders should benefit from this new EDI process in the following ways:
- Faster receipt of the LGC (usually within two days).
- No need to mail paper loan package to VA for guaranty (unless selected by VA for review).
- Ability to submit loans for guaranty at most hours of the day.
- No need to complete VA Form 26-0286 – Loan Summary Sheet.
- Ability to deliver final documents to investors quicker.
To take advantage
of this EDI process, lenders should contact Ms. Dana Shields,
who is the Project Manager at VA. Ms. Shields’ telephone number
is 202-273-7406 and her email address is LGYDSHIE@VBA.VA.GOV.
A copy of VA Circular 26-99-20 can be obtained from MBA’s website
at www.mortgagebankers.org
and clicking on "Residential
Finance." Contact Bud Carter at (202) 861-8194.
HUD issues Mortgagee Letter 99-35 on the National Appraisal Examination. HUD has issued Mortgagee Letter 99-35 to remind lenders and appraisers that any appraiser on the FHA Roster of
Appraisers that has not taken and passed the FHA national appraisal examination must do so before February 1, 2000, in order to remain on FHA’s Roster. Appraisers wanting information about the appraisal examination
should contact the HUD Real Estate Assessment Center customer service telephone line at 888-245-4860. A copy of HUD Mortgagee Letter 99-35 can be obtained from MBA’s website at www.mortgagebankers.org and clicking on "Residential Finance."
Contact Bud Carter at (202) 861-8194.
HUD issues Mortgagee Letter 99-37 containing guidance for processing FHA mortgage insurance cases if Y2K problems are encountered. HUD has issued Mortgagee Letter 99-37 to make
lenders aware of FHA’s guidelines for processing mortgage insurance cases should there be any Year 2000 (Y2K) deficiencies that cause disruptions in HUD’s systems. HUD has tested and certified that all its systems
are Y2K ready, but a Contingency Plan has been prepared for mortgage insurance processing in case of unexpected disruptions. If disruptions do occur in HUD systems, lenders can continue mortgage insurance processing
using the following guidelines:
- Lenders are not required to obtain FHA case numbers
to process and close FHA mortgages. However, case numbers
must be obtained prior to submitting the loans for insurance.
- Up-front mortgage insurance premiums (UFMIP) that are
not paid within 15 days of closing because of a Y2K failure,
will not be assessed late charges or interest during the
first 30 days of the new year. Lenders may request a waiver
of late charges and interest after the 30 day period by
following normal procedures and including evidence that
UFMIP could not be transmitted because of a Y2K failure.
- Lenders may close mortgages without obtaining Credit
Alert Interactive Voice Response System (CAIVRS) authorization,
but do so at their own risk. If it is subsequently
determined that the borrower is not eligible for FHA financing
because of information in CAIVRS, the mortgage will not
be insured.
Contact Bud Carter at (202) 861-8194.
VA issues guidance in the event of Y2K problems. VA has tested and certified that all its systems are Y2K ready. However, in the event the VA Assignment System should become
unavailable, the VA advises lenders to contact the Philadelphia IT Support Division by email at vaa@vba.va.gov or by telephone at 215-381-3050. If the VA Funding Fee system becomes unavailable, lenders are to use the operator assisted method for payment of the funding fee.
Contact Bud Carter
at (202) 861-8194.
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