USDA Critical UPDATE and MEMO breakdown on the USDA Guaranteed Rural Housing loan program. REDUX!!! Please review & save!

By
Real Estate Mortgage Broker with Funky Quail Vintage

  This is a very CRITICAL UPDATE and anyone using the USDA loan, or if you KNOW of someone using USDA loans, please pass this blog link along, or RE-BLOG it to your sphere!!

I have included at the bottom of the BLOG, the entire list of loan coordinators within the United States of America!  Email first if you can! 

 

   Also, check out the music video at the end as well!

 

The reason for this update is because the USDA is experiencing it's highest volume since the inception of the program! 

REDUX COMMENT:  Jeff Belonger brought up an issue in the comments that prompted me to do a little investigation.  His comment was directed at JP MORGAN CHASE!  I spoke to an upper level executive today at JP MORGAN about the "rumour" that they may be pulling out of the USDA business!  He kinda laughed and clearly stated there is NO TRUTH to that rumour!  Hence, if you have files there...rest assured, nothing is changing! He did state there was an internal stoppage on the RETAIL banking side regarding USDA loans, and the word he used was SUSPENDED.  This is STILL in effect.  I am confident that is only temporary though!  One more reason to use Mtg Brokers & Bankers! Yahoo..

Taylor Bean & Whittaker, I am still awaiting a response from!

Thanks!  Bucky

************************** 

 

BEFORE I SUMMARIZE the changes, we need to first cover LENDER OVERLAYS!

What is a Lender overlay you ask?  Well, Im glad you asked!  Thanks!

A Lender overlay is a requirement that a specific LENDER has, that maybe another Lender does not have!  For example, if you speak directly with a USDA office about a specific requirement on a loan application, offer to purchase, or confront them about a situation, and you get a FAVORABLE RESPONSE, it may not mean anything at all!  WHY?  Because the LENDER that is UNDERWRITING and approving the loan PRIOR to the loan going to the USDA, may have a sticter rule, or may not approve a loan under those circumstances!  Hence, enter the LENDER OVERLAY

Another example, JP Morgan Chase & Taylor Bean & Whittaker, are the only two companies I AM AWARE of that allow a USDA loan product to be processed as a "Subject to" appraisal, or as a "fixer upper" loan!

Wells Fargo, and other companies do not!  Why?  Because they have LENDER OVERLAYS! What this is REALLY telling you is that they dont understand them, dont want to have anything to do with them, and aren't we all afraid of the unknown?  They do not want to take the risk!  Who does today?

NOW TWO VERY QUICK THINGS TO WATCH FOR IN THE COMING DAYS! 

 Realtors-  If you are not getting them already, start watching for a CHANGE in loan committments!  Loan committments are going to start coming through with stipulations on them!  This isn't a bad thing necessarily, but you will start seeing approvals come through that say..."this loan approval is SUBJECT TO an acceptable appraisal, and any other further sitpulations put forth by the Rural Development office!

Lenders-  Start looking over your appraisals WAY more closely!  DO NOT RELY on your internal underwriter,manager, or processor!  LOOK AT THE DARN THING YOURSELF!  A friend of mine recently had her USDA loan suspended, due to the site value being 30.10% of the appraised value!  Limit in USDA loans is 30%.  Yes, it is only 1/10th of 1 percent, but look at the grief we are getting!

 

Okay, now on to the summary!

  

 Let's first talk about rate locks!

 Rural Development has experienced a HUGE increase in volume.  Directly from the USDA, they are asking both Lenders & Realtors alike to allow ample time for a review of the file and a response.  "Plan accordingly with your rate locks and loan closings. Contacting Rural Development multiple times as a Lender,Broker,Realtor, or borrower, will only delay your important request. "  In other words folks, be patient!  Lenders, make sure your Realtors understand time frames and turn times!  Realtors, take your heart medication and drink lots of fluids!   In other words, plan for an extended delay in high volume processing areas!

 

This is a quote from the USDA alert regarding CONTACTING the RD office!

"While many parties are anxious for their request to be acted upon, commication concerning guaranteed loan applications will occur between the Rural Devlopment and the approved Lender!!!    Brokers, correspondent Lenders,Realtors,or potential borrowers,etc..should communicate with the approved lender, NOT Rural Development."

 

 Lenders

The Guaranteed Underwriting System (GUS), will reduce proceesing times and allow approved lenders to verity loan data for accuracy in a timely manner!  Here's the rub tho:  There are MANY new GUS rules that may REQUIRE ADDITIONAL DOCUMENTATION to be submitted on "ACCEPT" loan files when a "final" underwriting submission is executed. 

Read all  your findings!  What does this mean to Realtors?  Well, sadly, they can add things at the end!  I know we don't like hearing that...but they can!  Tough!  However, communication is VERY important on this!

   

 

 Okay, now here are Bucky's Tips & Best Practices straight from the USDA!

Any of these changes may adversely affect your Conditional Loan Committment!

 

1.  if the loan amount increases

2.  if the loan interest rate increases

3.  if there is an increase in mortgage or personal liabilities

4.  if there is a decrease of assets, and/or the income decreases 

 

 

 How about an example?  Let's say, your customer is buying a home.  They get their Conditional Loan Committment and everybody is happy!  House is inspected and/or appraised, and it is determined that the house needs a new roof.  Seller refuses to pay for it!  Well, the USDA plan allows for a new roof to be financed!  Hurrah!  However, that spells DELAY!  Hence, the loan amount increases,the mortgage liability increases, and more than likely the debt ratio goes up!  This means that it will need to go BACK to underwriting!  Sometimes this is 1 day, or 1 week!  Depends on volume!  PLAN AHEAD!

 

LASTLY

USDA LOANS DO NOT REQUIRE HOME INSPECTIONS!  Hello??  Bueller??

Click HERE for the income limits link

 Click HERE for the income income eligibility link

Click HERE for the property eligibility link

 

 THE FOLLOWING STATEMENT BELOW IS DIRECTLY FROM THE USDA!

         Sign up for our email distribution list to receive timely updated information regarding program origination, GUS underwriting or servicing.  Sign up at:  http://www.rdlist.sc.egov.usda.gov/listserv/mainservlet.

  

STATE CONTACT PHONE # EXT. FAX # E-MAIL ADDRESS
AK  Karen LaMouria  (907)761-7732    (907)761-7794  klamouri@ak.usda.gov 
AL  Al Butler  (256)532-1677    (256)532-1931  al.butler@al.usda.gov 
AL  Lou Rambo  (334)279-3442    (334)279-3448  lou.rambo@al.usda.gov 
AR  Linda McCaslin  (501)301-3235    (501)301-3290  linda.mccaslin@ar.usda.gov 
AS  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
AZ  Earl Tatlow  (602)280-8709    (602)280-8879  earl.tatlow@az.usda.gov 
CA  Annete Joyer  (916)714-1104  107  (916)714-1118  annette.joyer@ca.usda.gov 
CA  Ed Amen  (530)226-2589    (530)226-2567  ed.amen@ca.usda.gov 
CA  Nellie Nunez  (559)734-8732  110  (559)732-3481  nellie.nunez@ca.usda.gov 
CA  Viloet Gomes  (831)757-5294  106  (831)424-7289  violet.gomes@ca.usda.gov 
CO  Jamie A Spakow  (720)544-2918    (720)544-2970  jamie.spakow@co.usda.gov 
CT  Arlene Nunes  (413)253-4300  4333  (413)253-4347  arlene.nunes@ma.usda.gov 
DE  Stacey Slacum  (302)857-3603    (302)857-3611  stacey.slacum@de.usda.gov 
FL  Bob Coordsen  (352)338-3435    (352)338-3437  bob.coordsen@fl.usda.gov 
FL  Roger Taylor  (352)338-3435    (352)338-3437  roger.taylor@fl.usda.gov 
FM  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
GA  Ashley Carlan  (706)546-2169    (706)613-3046  ashley.carlan@ga.usda.gov 
GU  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
HI  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
IA  LindaKay Rhoades  (515)284-4723    (515)284-6668  linda.rhoades@ia.usda.gov 
ID  Pamela S. Cook  (208)378-5628  (208)378-5643  pamela.cook@id.usda.gov 
IL  Lindsey Rademacher  (217)403-6216    (217)403-6231  lindsey.rademacher@il.usda.gov 
IN  Vince Maloney  (317)290-3100  414  (317)290-3096  Vincent.Maloney@in.usda.gov 
KS  Kevin Culley  (785)271-2722    (785)271-2784  kevin.culley@ks.usda.gov 
KS  Tim Rogers  (785)271-2718    (785)271-2784  tim.rogers@ks.usda.gov 
KY  Don Johnson  (859)224-7361    (859)224-7450  don.johnson@ky.usda.gov 
LA  Scott Pousson  (318)473-7630    (318)473-7829  scott.pousson@la.usda.gov 
MA  Arlene Nunes  (413)253-4300  4333  (413)253-4347  arlene.nunes@ma.usda.gov 
MD  Stacey Slacum  (302)857-3603    (302)857-3611  stacey.slacum@de.usda.gov 
ME  Dale D. Holmes  (207)990-9110    (207)990-9119  dale.holmes@me.usda.gov 
ME  Lorrie Hamlin  (207)990-9110  113  (207)990-9119  lorrie.hamlin@me.usda.gov 
MH  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
MI  Kevin Smith  (888)771-6993  113  (517)676-1909  kevin.smith@mi.usda.gov 
MN  Linda Behrendt  (651)602-7797    (651)602-7825  linda.behrendt@mn.usda.gov 
MO  Nathan Tutt  (573)876-0990    (573)876-9348  nathan.tutt@mo.usda.gov 
MO  Randall L. Griffith  (573)876-0976    (573)876-9348  randy.griffith@mo.usda.gov 
MP  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
MS  Ivan Kiani  (601)965-4325  133  (601)965-4561  ivan.kiani@ms.usda.gov 
MS  Robert (Don) Thames  (800)548-0071  146  (601)965-5384  Robert.Thames@ms.usda.gov 
MT  Laura Horn  (406)585-2559    (406)585-2565  laura.horn@mt.usda.gov 
NC  Dale Darroch  (919)873-2036    (919)873-2075  dale.darroch@nc.usda.gov 
NC  Mel Ellis  (919)873-2041    (919)873-2075  mel.ellis@nc.usda.gov 
NC  Neal Sherrod  (919)873-2059    (919)873-2075  neal.sherrod@nc.usda.gov 
ND  Barry Borstad  (701)530-2046    (701)530-2111  barry.borstad@nd.usda.gov 
NE  Krista K. Stevens  (402)437-5518    (402)437-5408  krista.stevens@ne.usda.gov 
NE  Michael Buethe  (402)437-5574    (402)437-5408  mike.buethe@ne.usda.gov 
NH  Colleen Ladew  (603)223-6035    (603)223-6061  colleen.ladew@nh.usda.gov 
NJ  Neal Hayes  (856)787-7732    (856)787-7737  neal.hayes@nj.usda.gov 
NM  Art Garcia  (505)761-4973    (505)761-4977  arthur.garcia@nm.usda.gov 
NV  William L. Brewer  (775)887-1222  13  (775)885-0738  william.brewer@nv.usda.gov 
NY  Janette Smith  (607)753-0851  (607)753-3190  janette.smith@ny.usda.gov 
OH  Jerry Greenbaum  (614)255-2405    (614)255-2561  Jerry.Greenbaum@oh.usda.gov 
OK  Jackie Walther  (405)742-1070    (405)742-1084  jackie.walther@ok.usda.gov 
OK  Richard Himbury  (405)742-1079    (405)742-1084  richard.himbury@ok.usda.gov 
OR  Rachel Shultz  (503)414-3337    (503)414-3394  rachel.shultz@or.usda.gov 
PA  Jeremy Wilson  (717)237-2277    (717)237-2193  jeremy.wilson@pa.usda.gov 
PA  Rob Lane  (717)237-2275    (717)237-2193  robin.lane@pa.usda.gov 
PR  Arlene Zambrana  (787)766-5095  222  (787)281-4993  arlene.zambrana@pr.usda.gov 
PW  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
RI  Arlene Nunes  (413)253-4300  4333  (413)253-4347  arlene.nunes@ma.usda.gov 
SC  George Randolph  (803)253-3094    (803)253-3827  george.randolph@sc.usda.gov 
SD  Kathy Chase  (605)352-1132    (605)352-1154  kathy.chase@sd.usda.gov 
TN  Tom Favreau  (615)783-1364    (615)783-1391  tom.favreau@tn.usda.gov 
TX  Joyce McGlothlin  (254)742-9763    (254)742-9735  joyce.mcglothlin@tx.usda.gov 
TX  Leon Carey  (254)742-9772    (254)742-9735  leon.carey@tx.usda.gov 
UM  Stephanie Taketa  (808)933-8308    (808)933-8327  stephanie.taketa@hi.usda.gov 
UT  Kristine Dahlberg  (801)524-4329    (801)524-4406  kristine.dahlberg@ut.usda.gov 
VA  Agnes Rollins  (540)433-9126    (540)432-1707  Agnes.rollins@va.usda.gov 
VA  Byron Waters  (804)287-1547    (804)287-1784  Byron.Waters@va.usda.gov 
VA  Gwen Fender  (804)287-1598    (804)287-1784  Gwen.Fender@va.usda.gov 
VI  Bob Coordsen  (352)338-3474    (352)338-3437  bob.coordsen@fl.usda.gov 
VI  Roger Taylor  (352)338-3495    (352)338-3437  roger.taylor@fl.usda.gov 
VT  Bob McDonald  (802)828-6013    (802)828-6018  bob.mcdonald@vt.usda.gov 
VT  Michael Bard  (802)828-6013    (802)828-6090  michael.bard@vt.usda.gov 
VT  Rita Weisburgh  (802)828-6003    (802)828-6067  rita.weisburgh@vt.usda.gov 
WA  Benjamin (Ed) Reynolds  (360)704-7765    (360)704-7718  WA-grh@wa.usda.gov 
WI  Julie Czappa  (715)345-7620  119  (715)345-7699  Julie.Czappa@wi.usda.gov 
WV  Scott Mullin  (304)263-6461  110  (304)267-9172  scott.mullin@wv.usda.gov 
WY  Shauna Gibbs  (307)233-6722    (307)233-6739  shauna.gibbs@wy.usda.gov 

 

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 Thanks for reading & Keep selling!

 

-Darin-

 

As always, I welcome your concerns,comments,issues and suggestions!  Darin@Osmwi.com

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Re-Bloggged 4 times:

Re-Blogged By Re-Blogged At
  1. Tom Burris 07/16/2009 01:28 PM
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  3. Jeani Codrey 07/17/2009 10:05 AM
  4. Raine Carraway 07/17/2009 06:55 PM
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Topic:
Mortgage / Finance
Location:
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Groups:
FOR SALE BY OWNER - MARKETING(FSBO)
Keller Williams 'Rainers
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Posts to Localism
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Tags:
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darin osenberg
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Rainmaker
122,037
Jim Valentine
RE/MAX Realty Affiliates

Good stuff, Darin.  It is long, but aren't lender rules, regs and memos long and detailed anyway?  It is the details, after all, that separate one lender from another.  The USDA product is great and I really like how you advocate it.  Thanks for the information.

July 19, 2009 11:19 AM
Anonymous #50
Anonymous
Anonymous

Very informative post today.

I'll re-read later.

Thanks,

Patricia Aulson/portsmouth nh

July 19, 2009 12:15 PM
Ambassador
42,041
Darin Osenberg
Funky Quail Vintage

Jim V-  Thanks!  You know, I hate having to DO the long ones, but when they are important...if you LEAVE something out, then you get heckled by people for leaving something out!  It is a no win situation!  Hence, I blog for my business partners and customers!  THANK YOU for sharing Jim!

Patricia-  Thanks for commenting!  I post them just for people like you, who will re-read it, and in some small way, it hopefully helps them!!!-  Thanks again!  Darin

July 19, 2009 03:28 PM
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231,842
Lisa Udy
Logan Utah Realtor
Platinum Real Estate Group

Hey Darin, 

Thank for the awesome post, so much info, and I need to call my rep today and find out what's going on. Thanks for the number, and I will be returning to get my head around all of this great info! :)

-Lisa

July 20, 2009 12:31 PM
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Darin Osenberg
Funky Quail Vintage

Hi Lisa!  You are welcome!  I have been "suggested" by my friends here in the RAIN, that my blogs are a little too meaty...but on THIS particular topic, I dont think there is any way around it!  I am hoping people will at least cut & paste their local phone# and contact information out..so, like you , they know where to call!  Additionally, if you do a home buyer seminar, and you talk to your rep, sometimes they will come out and work them with you!!=  Thanks as always lisa!   -  Darin

July 20, 2009 12:38 PM
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Blogging important and factual information, enabling the general public and Realestate professionals lto stay informed on market happenings!