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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] New from Fannie Mae... Posted by CC in OC on April 01, 2008 at 6:03 PM In Reply to: Do Banks Recognize Bargain Prices? posted by CC in OC on April 01, 2008 at 5:51 PM ...as of 12/05/07: In addition, the following clarification is being made for both limited cash-out refinance transactions in Part VII, Section 103.02 Limited Cash-Out Refinance Transactions and cash-out refinance transactions in Section 103.03 Cash-Out Refinance Transactions: For a refinance transaction (either limited cash-out or cash-out) to be eligible for sale to Fannie Mae, there must be a continuity of obligation if there is currently an outstanding lien that will be satisfied through the refinance transaction, i.e. there must be at least one borrower obligated on the new loan who was also a borrower obligated on the existing loan that is being refinanced. If there is no continuity of obligation, i.e. if no borrower on the outstanding loan that will be satisfied through the new loan is also a borrower on the new loan; the transaction must be treated as a purchase. If there is not currently an outstanding lien on the subject property, a loan to the property owner secured by the property will be considered a cash-out refinance in accordance with Section 103.03. In other words, the purchase price, if owned for less than 12 months, or the appraised value--WHICHEVER IS LESS--will be used to calculate the loan-to-value. Follow Ups: Re: New from Fannie Mae... DenisInSanDiego 11:01 AM, 04/02/08 (0) Post a Followup: Name : E-Mail : Subject : Comments: : ...as of 12/05/07: : In addition, the following clarification is being made for both limited cash-out refinance transactions in Part VII, Section 103.02 Limited Cash-Out Refinance Transactions and cash-out refinance transactions in Section 103.03 Cash-Out Refinance Transactions: For a refinance transaction (either limited cash-out or cash-out) to be eligible for sale to Fannie Mae, there must be a continuity of obligation if there is currently an outstanding lien that will be satisfied through the refinance transaction, i.e. there must be at least one borrower obligated on the new loan who was also a borrower obligated on the existing loan that is being refinanced. If there is no continuity of obligation, i.e. if no borrower on the outstanding loan that will be satisfied through the new loan is also a borrower on the new loan; the transaction must be treated as a purchase. If there is not currently an outstanding lien on the subject property, a loan to the property owner secured by the property will be considered a cash-out refinance in accordance with Section 103.03. : In other words, the purchase price, if owned for less than 12 months, or the appraised value--WHICHEVER IS LESS--will be used to calculate the loan-to-value. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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