My New Blog

Refi Plus

On February 18th 2009, the Home Owner Affordable and Stability Plan was enacted by President Obama. As part of this plan the administration subsequently announced a Home Affordable Refinance Initiative to provide refinance opportunities for borrower whose mortgages are either held or guaranteed by Fannie Mae.

Refi Plus allows responsible borrowers who are current on their mortgages but have been unable to refinance because of a decline in home prices or limited availability of Mortgage Insurance Coverage to take advantage of historically low interest rates. This product is meant to improve the home owner's financial position by reducing the payment or / and improving the terms of the payment.

LOOK UP PROPERTY ELIGIBILITY

• Current property must be owned or guaranteed by FNMA
• Existing loan was delivered to FNMA prior to March 1st, 2009
• Check FNMA's website Click Here

• Include copy of the note and mortgage statement with submission
• It is critical to CMG value estimates that the address is entered accurately
• Appraisals are not required unless value is overstated upon submission

• Prior to May 2nd, 2009
• CMG will not offer Refi Plus on properties that currently have Mortgage Insurance
• CMG is forced to wait until MI Companies will be fully participating in this program
• CMG will not offer Refi Plus on Non-Owner Occupied and 2-4 Units

• Changes coming May 2nd, 2009
• DU will be updated to identify if property has MI
• Property has MI - DU will search for lower rates for borrower
• Property does not have MI - No new MI required
• CMG will offer Refi Plus on Non-Owner Occupied and 1-4 Units

LOAN LIMITS

• Conforming $417,000 (One Unit)
• Agency High Cost balances are not eligible

FEES

• NRCCs can be rolled into new loan amount
• Not to exceed 105% LTV

TERMS AVAILABLE

• 30 Year Fixed

TRANSACTION PURPOSE

• Rate and Term only

LTV / CLTV

• 105% LTV (may be increased to 125%)
• No Minimum on CLTV
• No limit on CLTV
• Existing 2nd lien mortgage cannot be paid off through Refi Plus product
• Existing 2nd lien mortgage must be re-subordinated
• Use current payment on 2nd from credit report to qualify

CREDIT

• 620 middle Fico
• No FICO score requirement May 2nd, 2009

• Borrowers must be current on their mortgage
• No more than 2x60 day lates in last 2 years

• Bankruptcy - 4 years since date of discharge
• Foreclosure / Deed in Lieu - 7 years

BORROWER / CO-BORROWER

• All borrowers on current loan must be on new Refi Plus loan
• No exceptions to this rule
• Without all original borrowers, Refi Plus is not available

• Co-Borrowers can be added with no restriction
• Non-Occupied Co-Borrowers are not allowed

PROPERTY ELIGIBILTY

• No Maximum Property restriction for owner occupied transactions
• 4 properties owned restriction for nonowner occupied transactions

• 1 - 2 Unit SFR, PUD and Condo
• 1 - 4 Unit will be available May 2nd 2009

• Condotels & Manufactured Homes are not eligible
• Modular Homes are allowed
• Condos
• No warranty required
• No owner occupancy ratio requirement
• No HOA cert
• No verification of pending litigation required

• Insurance Policy Coverage
• HOA must maintain "Blanket" Policy
• Must cover equipment and fixtures inside individual units
• If no "Blanket" Policy, borrower must obtain "Walls-In" or HO-6 Policy
• Coverage amount must be for 20% of the value
• Must cover 100% of replacement costs of project improvements

• Fidelity Bond Insurance
• Required on all projects with > 20 units
• Current HOA reserve balance is required to determine coverage adequacy

OCCUPANCY

• Owner Occupied
• Nonowner Occupied will be available May 2nd 2009
• 2nd Homes are not eligible

QUALIFYING

• Wage, Salary, Bonus and Overtime
• 1 recent pay stub and VOE

• Self Employed and Commissioned
• Most recent 1 year tax return

• Assets
• 2 months PITI Typically

• Qualifying with Subordinated 2nd Lien
• Qualify with current payment from credit report