Lender requesting removal of verbiage

[Mike Boyd]

My report currently reads: The two page document dated 6/20 was submitted to the appraiser for analysis. No atypical terms in the agreement were noted with the exception of the Ameridream Contribution of $12,000. In the contract analysis section.

And this in the section pertaining to concessions:

Seller is to contribute $12,000 to The Ameridream Foundaton for the benefit of the buyer's closing costs and downpayment requirements.
That's funny. I got a stip a couple weeks ago that is almost the reverse. In the contract analysis I had written about the $12,000 credit for NRCC and a seller contribution of $27,000 for the Nehemia program down payment assistance. In the area for concessions I had written..."see contract analysis."

They wanted the whole thing written out in both places. Go figure.

 

[Webbed Feet]

<......snip.....>, (total BS situation caused by WF, but that's another long story).

Ms Platt,

What did I do now?

Webbed.

 

[OSU Beavers]

It is more than 6% of the sales price

$159,800. It's 7.5% contribution, and I don't know if that's their problem. ??? They structured it. I just report it.

A. Seller Contributions. The seller (or other interested third parties such as real estate agents, builders, developers, etc., or a combination of parties) may contribute up to six percent of the property’s sales price toward the buyer’s actual closing costs, prepaid expenses, discount points, and other financing concessions. Contributions exceeding six percent of the sales price or exceeding the actual cost of prepaid expenses, discounts points, and other financing concessions will be treated as inducements to purchase, thereby reducing the amount of the mortgage. Closing costs normally paid by the borrower are considered contributions if paid by the seller. Inducements to purchase are described in paragraph B, below.

The six percent limitation also includes seller payment for permanent and temporary interest rate buydowns and other payment supplements, payments of mortgage interest for fixed rate mortgages and GPMs only (but not principal), mortgage payment protection insurance, and payment of UFMIP.

Fees typically paid by the seller under local or state law, or local custom, such as real estate commissions, charges for pest inspections, fees paid for trustees to release a deed of trust, etc., are not considered contributions. The dollar limit for seller contributions is calculated by using Attachment A on the HUD-92900-PUR/HUD-92900WS. Each dollar exceeding FHA’s six percent limit must be subtracted from the property’s sales price before applying the appropriate LTV ratio.

 

[Caterina Platt]

Poor Webbed,

It just dawned on me that you share the same initials as that stagecoach company to which I was referring.

OSU,

You solved the mystery. I got a peek at the Good Faith Estimate yesterday that the agent was trying to decipher. She faxed it to me along with her original contract. Ms. LO has a few pounds of pork padded into the deal and has this buyer completely hornschwagled into thinking it's a killer rate and deal.

Now, we must assume this is a A borrower, but 6.5% interest rate with a 1% origination and 1% discount and a $1,500 application fee.

She's got some room to trim if she really needs to get it into 6% zone. Not the appraiser's issue, though. Is it?

 

[Webbed Feet]

Ameri - appraisal nightmare.....

http://finance.senate.gov/hearings/testimony/2004test/062204htest.pdf

http://housingpanic.blogspot.com/2006/08/ok-heres-scam-builders-funnel-money-to.html

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/01/AR2006060101969.html

http://www.mtgprofessor.com/a%20-%20down%20payment/are_seller_contributions_kosher.htm

http://www.realtown.com/Maureen/blog/finance/loan-scam

http://www.brokeruniverse.com/grapevine/thread/?thread=510918

http://www.fhabook.com/

http://www.governmentpro.com/down-payment-assistance/HUD-against-ameridream-and-down-payment-assistance/

http://www.azmortgageguru.com/nonprofits-sue-HUD-for-barring-them-from-providing-down-payment-assistance/

One thing is clear. Either the contract prices are being increased to cover the so-called "gift," or the original asking prices are being increased in anticipation of providing the so-called donation to charity.

This is NOT market driven sales prices per our definition of Market Value! .... Either anything used for a comp involving one of these programs has to be adjusted for cash equivalency.... or the comps should be tossed out as unacceptable for use.

Webbed.

 

[Mztk1]

But the 7.5% includes the AmeriDream gift, which is usually 3% and I don't see anything in what OSU wrote that states the gift program is considered as part of that 6%. In fact, I see all the time 6% towards closing plus 3% towards the gift program. So I don't think the 7.5% would be an issue at all if 3% of it is for the gift program.