Presentation on theme: "Department of Veterans Affairs Puerto Rico Lender Training"— Presentation transcript:
1 Department of Veterans Affairs Puerto Rico Lender Training ST Petersburg Regional Loan Center
2 PRESENTED BY REGIONAL LOAN CENTER ST. PETERSBURG, FLORIDA Sharon Glanton-Davis, LPOMonica Collins, ALPOSteven Roberts, ALPO
3 ObjectiveTo provide program participants a better understanding of how to process and underwrite VA Loans.ANDHow to navigate the VA Portal and utilize its resources to make the VA Home loan process easier.
4 VA Regional Loan Center QUESTIONS CONTACT THE VAGo toLender’s HandbookCALL , orThe Lender’s Handbook is referenced throughout this presentationRefer to Websites information on handouts
5 Where we are TodayFind A HomeGo to a lenderClose Days
6 Register in the VA Portal Go toAccess VA Portal and RegisterMust have a VA Lender IDSee handout for registration process
7 WHY A VA LOAN? No Down Payment for loans less than $417,000 No Mortgage Insurance PremiumLimitation on Buyer’s Closing CostNo prepayment penaltyServicing is available through the VA to avoid foreclosures. Check Portal for VALERI updates. Borrowers should contact lender first.
8 Obtain A Certificate of Eligibility Complete VA FormAccess WEBLGY to get electronic COE (through the VA Portal) at orUpload supporting documents , Forms , DD214 (member 4) and Statement of Service. Satisfaction of Mortgages, Recorded Deeds and HUD 1 will support restorations of entitlementMail the Certificate of Eligibility application to:Atlanta Regional Loan Center Attn: COE (262)PO BOXDecatur, GA Toll FreeHTTPS//IRIS.VA.GOVWe ask that very effort be made to save the veteran from a last minute long distance tip to the RLC to get a COE.
9 ACE-Automated COEAccess Internet based application through the VA PortalSee Applications select WEBLGY, proceed to Eligibility, and Create a Record. Input information according to military service records data, i.e. Form DD214 . To avoid electronic errors, documents must be uploaded into (WEBLGY). See pg 15 handoutMaximum guaranty amount is now $104,250 or 25% of conforming loan limit for purchase up to $417,000See Handout Pgs 15-21If electronic application is attempted and the system does not generate a COE, the application can be electronically submitted to the COE Center, but you must also electronically upload the supporting documentation, DD214/ Statement of Service or your application will be returned incomplete.
10 Surviving Spouse COEIf applying for the first time submit form to:Atlanta Regional Loan CenterAttn: COE (262)PO BOX Decatur, GA30031Only paper applications accepted by mail. This process may be lengthy. Please submit immediately.Chapter 2.3, M26-7
11 Restoration of Entitlement When entitlement is used, it must be restored to obtain a 25% guaranty.Complete VA Form and provide proof of service (upload all documents into WEBLGY)ANDProvide proof of loan payoff and disposal of property, ie;HUD 1Recorded Satisfaction of MortgageRecorded copy of DeedRelease of Deed of Trust (Cancellation)Chapter 2-3, M26-7
12 Formula for Entitlement Basic EntitlementBonus EntitlementA Veteran’s basic entitlement is $36,000Loans greater than $144,000 the Maximum Guaranty amount is 25% of the loan amount, up to $104,250See Handout Pg 33Loan amount $417,000 X .25%= 104,250 Max Entitlement 104, = 68,250 Bonus Entitlement 68,250 X 4= $ 273,000 New Loan Amount $273,000
13 Verification of Benefits The Veteran’s Exempt Status is now verified on the Certificate of Eligibility. Please refer to circular See HandoutSince FF status is shown on the COE, lenders in most cases will no longer be required to fax VA Form to VA for processing.Do not send the form if the veteran does not indicate they receive service-connected disability benefits from VA CircularSee Handout Pgs
15 ORIGINATION PROCESSOnce you determine the borrower is an eligible Veteran and have obtained a COE/ACE, begin the application process.Please Obtain COE/ACE and Verification of Benefits early-not the day of closing.
16 Eligible Loan Purposes Purchase or construct a homeRefinanceIRRRL (streamline or rollover)Cash-Out Refinance-(up to 100%existing property value, mustoccupy)Install Energy-related featuresTrue or false- A vet may use their benefit to purchase land only?Chapter 3 Pgs. 3-5Chapters 6-7
17 COE/ACE IS OBTAINED PROCEED TO: Loan ProcessingCOE/ACE IS OBTAINED PROCEED TO:Complete all required forms (CH 5)Verify credit is satisfactory (CH 4)Obtain appraisal & Notice of Value NOV (CH 13)Obtain VOE’S and AUS-if used (CH 4)Asset verification if needed (CH 4)Obtain Veteran’s (if exempt) Status (COE)Seller Concessions and allowable closing fees (CH 8) See HandoutCalculate funding fee (CH 8) (Circular )Close the loanCh. 5 Procedures the Lender Must complete B4 receiving guaranty; How to submit loan docs to VA; Prior Approval Package submission Procedures (elaborate on philosophy); Automatically closed loan procedures, EDICh. 4 is the Credit underwriting chapter. Information relating to Income, credit history, debts, and assets are included in this chapter. Completion of Form 6393, Loan Analysis, Ch. 4 full instructions.. Back bone of determining financial eligibility, Residuals and Debt to income ratios are explained in a simple to read chart.Staff Appraisal Reviewer (SAR) under the Lender Appraisal process Program (LAPP) is authorized by VA to review the appraisal see CH13 explains the appraisal review process, preparing an NOV, Conditions and Reqmts of the NOV must be met, Changing the NOVVOE/ AUS discussed laterApplicant needs sufficient cash to cover closing costs & points not included in loan, down payment, diff in sales price and NOV, price exceeds value. Only assets needed to close the loan must be verified.No FF for exempt vets and un-remarried widows of service connected disabled vetsSeller Concessions (Ch8) do not include paying vets closing cost, points as appropriate to the market… eg. Interest rate is 7.5 % with 2 discount points. Seller could pay the 2 points, but if seller paid 5 points, 3 would be considered as seller concession. Seller concessions, in the extreme, may entice unqualified vets into unaffordable mortgages and may disguise the vets inability to qualify for the loan.Calculation of FF is simple and electronically transmitted to VA through the Funding Fee Payment System. . Instruction are listed in Ch8Close the loan. Back to Back closings. Vet has VA loan to be sold/closed on same day as the purchase of a new VA loan closes. Vet must complete and sign the 1880 application, and it should be attached to the 2 HUD Sett Stmnts, showing the selling and purchase of the two homes. The vets Ent wld be restored and used on the new purchase.
18 VA Required Documentation CAIVRSAUS (Automated underwriting Print out, Data Integrity).Debts and obligations (Credit reports)NOV Notice of Value/AppraisalLoan Application URLAVerified, available income, 2 years minimumOccupancyAssetsAdverse Data(Credit)Form Loan AnalysisChapter 4, M26-7
19 Occupancy Requirement The veteran borrower must intend to occupy the home as his/her primary residenceThis must be indicated on VA Form at closingThe spouse is the “only” other person that can satisfy the occupancy requirementChapter 3, M26-7
20 Debts and ObligationsSignificant Debts must be deducted from effective income to determine repayment ability. Form1 full month of paystubs may reveal additional unreported debts such as alimony, garnishment, etc.Analyzing Credit, Adverse data, supporting documents are requiredChapter 4, M26-7Definition for significant debt.. Debts and obligations with 10 mos or more remaining. If less than 10 months with large payments that severely impact the family’s resources for any length of time.Ch. 4 also covers alimony/child support obligation, pending sale of Real Estate, secondary borrowing, deferred student loan payments, loans secured by deposited funds
21 APPRAISALSOrder appraisals through VA Portal atSelect Webgly, Go into Loan- Request appraisal. Select Lapp for Automatic Lenders or IND if Prior approval. Indicate LGI if liquidation appraisals and Submit.Complete application with correct information and submit. The system will generate a VA request for determination of reasonable value (form ) See HandoutChapter 12-13, M26-7Follow the prompts to register. If already registered, click into TAS, to obtain VA loan number, appraisal and Notice of ValueAppraisals are required to beProvide both Uniform Residential Appraisal Report and NOVTo verify property meets minimum property requirements -chapter 10All contingencies should cleared-provide required documentation only with full review package
22 Appraisal Requirements Sales contract , must provide a complete copy to appraiser, failure to provide will hold assignment.Title Study and Legal Description, lender must provide complete legal on the 1805Burglar Bars – VA no longer offering waivers.Release on at least one window per room or rapid egressWood destroying Insect info not required unless part of the property constructed of WoodSee C & V Manual
23 REFINANCING Refer to chapter 6 Check occupancy rules Verify active VA LoanCash Out–up to 100% value, credit, appraisal and occupancy required.IRRRL- No credit, No Appraisal required Chapter 6 M26-71.Discuss IRRRLs, -vet must certify that he/she PREVIOUSLY lived in home.2. Cash out refi and new loansamt of guaranty, extra entitlement, correct input to lgy (reduced guaranty)3.Ch 3 occupancy rules– law requires vet obtaining a va loan to certify that he/she intends to live in the propertyW/I a Reasonable time-60 days. If more than 60 days… a) there must be a specific date that vet will move in and b) a particular future event that will make the move possible. Past 12 months is not considered reasonable. Only the spouse can satisfy occ reqmt, in vets absence
24 Submitting Loan Package WEBLGY is programmed to mark every 10th case for full review/audit as required in MP26-1Provide full package to the RLC when WEBLGY shows “YES” in the top right corner (shows once the loan has been guaranteed)If submitting package to VA for LGC (Loan Guaranty Certificate), provide documents required per Modified Submission PackagesIRRRL or Cash Out Refinance-refer to Chapter 6 and provide required documentsChapter 5, M26-7 Pgs 1-23
25 Submitting loan package Cash out refinance loans must have entitlement restored prior to obtaining LGC for the new loan. Only VA has the authority and ability to restore entitlement.Entitlement needs to be restored in order to obtain 25% guaranty.Chapter 5 M26-7 Pgs. 1-23
26 Allowable Fees and Charges Pay VA Funding Fee (unless exempt). Circular1% flat charge from lenderSee Chart, Handout pg. 35Chapter 8 M26-7See Handout Pgs
27 VA Funding FeeThe basic funding fee for a first-time user is 1.40% of the loan amount as of November 18, 2011 (See Circular for changes)The funding fee for Reserves/Guard is 1.65%(Effective November 18, 2011)For subsequent use, except for IRRRLS the funding fee is 2.8%The funding fee for an IRRRL or an assumption is .50%See CircularHandout Pgs
28 Funding Fee SystemThe funding fee is paid electronically by the lender within 15 days of closing. FFPS requires a password to access. FFPS can be accessed at https://va.pay.gov.The lender must obtain a Vendor ID number. Call Funding Fee Helpline at , orAll VA loans, including exempt cases must show a funding fee record in order to obtain a Guaranty.See Handout Pg. 31
29 To Issue Automatic Guaranty LGC A Loan Guaranty Certificate ( LGC) is obtained by automatic lenders thru the WEBLGY System.Log into VA Portal Select Weblgy. Go into Loan, enter New Loan, select the Automatic option and submit all information required as per loan closing documents.All data must coincide with Certificate of Eligibility, Property information and funding fee system. Next submit. Loan Guaranty Certificate will be generated in seconds.See Handout Pg. 32
30 LENDER MAINTENANCE Lenders and agents must be approved by VA Mergers and acquisitions are submitted to VA Central OfficePayment of fees is to defray costsYearly corporate company financial statements are requiredOnline training required for underwritersInformation, forms may be obtained on VA websiteSee Handout PgsChapter 1 M26-7
31 Supervised lenders require VA approval Supervised lenders require VA approval. However they are supervised by entities other than VA. Examples are Banks and Credit Unions.VA Agents require a VA Lender ID number. Agents must be approved by a sponsor with Supervised or Non Supervised Automatic Authority. For Applications callVA LENDERSPrior Approval lenders also require a VA Lender ID Number. All packages must be submitted to VA for processing prior to closing the loan.Chapter 1, Lenders Handbook
32 Notary Fees Puerto Rico Refer to Serial letter issued July 17, 2010.Puerto Rico Notarial Act Law 43 of July 23, Letter sets the maximum Abogado-Notary fees payable by veterans at closing of home purchases in Puerto Rico, Vieques and Culebra.See handout or call