7 Times You’ll Need Extra Paperwork to Get a Mortgage

When you apply for a mortgage the first time, or if you’re a little rusty on the process, it’s reasonable to expect some shell shock when you’re told what documentation you need to gather, as there’s often quite a bit of it. If you plan to buy a home in the near future, a good best practice is to save all paperwork just in case it’s something you end up needing.

Some of the initial information lenders may ask for includes:

• Tax returns for the past two years
• W-2s for the past two years
• Pay stubs from the past 30 days
• Asset reports for the past 60 days

These are the basic essentials, although you may be asked for other items, such as:

• A financial paper trail
• Specific dates on previous derogatory credit events
• A marital settlement agreement (MSA) from a previous divorce
• Any missing pages of bank statements
• Any missing pages of tax returns
• Details outlining anything that appears inconsistent

It is a good idea to provide the financial documentation to a lender as quickly as possible. Any delays in submitting these documents may postpone your interest rate lock as well as your ability to perform on your real estate contract. (Remember, a good credit score can help you qualify for the best terms and conditions on a mortgage and even help you afford a bigger mortgage. You can see where you currently stand by viewing your two free credit scores, updated each month, on Credit.com.)

To help you establish what other information you might need, consider the following.

1. You have undocumented money

If you have additional deposits in your bank account, other than your income, you will need to paper trail and source them, whether you plan to use that money for the loan or not. Lenders cannot ignore money in your bank account that cannot be documented.

2. You’re divorced

If you were divorced, even as long as 10 years ago, a lender may ask for a copy of the full divorce decree with all pages and schedules, including the marital settlement agreement. Even if you mark the “single” box on the mortgage application, lenders run a background check and will see any previous marital statuses, addresses, or names. If you didn’t provide a divorce decree upfront, lenders will likely ask for one after the background check.

3. You’re not a U.S. citizen

Two instances when you’ll be required to provide your birth certificate are if you are unable to provide picture identification or if you note on the application that you are not a U.S. citizen. In these instances, an underwriter will generally sign off on your loan without the supporting document. One way to prevent unnecessary holdups related to your birth certificate is to go over all raw data on the loan application and make sure you answered all of your declarations questions correctly.

4. You’ve been through a short sale

The final settlement statement from the transaction is critical. Many mortgage loan programs have a waiting time to be eligible for new financing.

5. You’ve been through a foreclosure

You’ll want the date of the trustee sale. This is usually accomplished by obtaining a copy of the trustee’s sale date deed from your local recorder’s office.

6. You’ve filed for bankruptcy

If you filed for Chapter 7 or even Chapter 13 bankruptcy, you’ll need all the pages and schedules, including the schedule of creditors specifically identifying everything associated with the discharge. The discharge date is the date at which the waiting time starts to secure new mortgage loan financing. Even if you’re already past the date, but you don’t have all the Chapter 7 paperwork, your new loan process for buying a home can be put on hold until you have all of the appropriate documentation.

7. You’ve had a loan modification

You will need the full loan modification agreement you signed with your original loan servicer when you apply for a new mortgage.

Lenders do not intentionally try to make you provide more paperwork when buying a home. Based on your financial picture it might be necessary in order to meet federal compliance regulations all lenders must abide by. If anything identified above exists in your past or your financial picture is unique, make sure to have supporting documentation and a seasoned loan professional (full disclosure: I am one) working in your best interests.

Source: Realtor.com, Credit.com - Scott Sheldon
http://www.realtor.com/advice/finance/7-times-youll-need-extra-paperwork-to-get-a-mortgage/?iid=rdc_news_hp_carousel_theLatest

Incrreased Recording Fees Will Fund California Affordable Housing

The California legislator has come up with scheme to raise money for affordable housing by adding a fee for recording documents for refinance and other situations where a document needs to be recorded (such as a trust deed). It won't apply to purchases, so if you are buying a home, you don't have to worry about it, but if you are refinancing, they you will need to pay $75 per document up to $225 max per transaction. The California Association of Realtors endorses the plan and there seems to be some specific measures in place that specify exactly what percentage of the money is used for what.

Not sure how I feel about this yet, but you decide.




INCREASED RECORDING FEES WILL FUND CALIFORNIA AFFORDABLE HOUSING

It appears likely that the California legislature is about to enact a major bill that will provide a permanent source of funding to create housing for low-income individuals and households. The legislation, Assembly Bill 1335, introduced by Assembly Speaker Toni Atkins (D -- San Diego), is expected to raise $300 - $500 million annually. Where will all this money come from? Current and future California homeowners.

AB 1335 would impose new fees on the recording of various sorts of real estate documents. It would not raise fees on the recordings of documents pursuant to a sale transaction. So, for example, in most sales a new trust deed is created in connection with the purchase financing. The recording of that trust deed would not be subject to the fee. However, when a new trust deed is created in the course of refinancing or adding an equity line of credit, the recording of that trust deed would be subject to the fee.

The fee to be imposed is $75 per document. The documents affected include, but are not limited to, the following: grant deed, quitclaim deed, deed of trust, declaration of homestead, notice of default, mechanics lien, CC&Rs, easement, abstract of judgment, and reconveyance.

In any single transaction there is a limit of $225 that can be imposed by these fees. There is no limit to the amount of fees that can be charged over any period of time to the same entity. If, for example, you refinanced twice, you might pay $450 in fees.

The total fees collected, minus any administrative cost to the county recorder, is to be forwarded each quarter to the Department of Housing and Community Development (HCD) where it is to be deposited into the "Building Homes and Jobs Trust Fund". The Trust Fund will be administered by a Governing Board.

The legislation requires the following: "(A) Twenty percent of moneys in the fund shall be expended for affordable owner-occupied workforce housing. (B) Ten percent of the money in the fund shall be expended to address affordable homeownership and rental housing opportunities for agricultural workers and their families."

Among the purposes for which the remainder of the money could be used for are matching portions of funds placed into local or regional housing trust funds, emergency shelters and transitional housing, accessibility modifications, efforts to acquire and rehabilitate foreclosed, vacant, or blighted homes, and homeownership opportunities, including but not limited to down payment assistance.

AB 1335 has garnered an unusual amount of support, much of it from specific cities and from a variety of building industry associations. 176 individuals and organizations registered support for the bill. Sixteen registered opposition, twelve of whom were county clerks, assessors, and/or recorders.

The opposition centered on two concerns: (1) the fees might discourage some people from recording documents that they really should (for their protection) record; and (2) nothing in the bill required that any of the money collected would come back to the communities where it was generated.

It came as a surprise to many that the California Association of REALTORS®(CAR) weighed in supporting the bill, as it had opposed a similar bill (SB 391) last year. But this bill differed in important respects (e.g. the $225 cap, and the 20% set aside for homeownership purposes). It probably didn't hurt, either, that the composition of the Trust Fund Governing Board is practically guaranteed to include two representatives from CAR.

Source: RealtyTimes, Bob Hunt
http://realtytimes.com/consumeradvice/buyersadvice1/item/36995-20150728-increased-recording-fees-will-fund-california-affordable-housing