For the Veterans living in Pennsylvania who currently have a VA loan, many have heard about the Pennsylvania VA streamline refinance – also known as the VA IRRRL program.

Many are also wondering “what is the minimum credit score for the Pennsylvania VA streamline refinance?” to which there is a potentially confusing answer:

The answer to the question of “what is the minimum credit score for the VA streamline refinance is:

According to VA guidelines, there is no minimum credit score. But according to lender guidelines, there may be a requirement for minimum credit score depending on the lender.

VA isn’t the organization that actually lends you money, various VA / HUD approved lenders do. And so even though the VA doesn’t have a minimum credit score guideline, if a particular lender does, then that guideline will apply and a with that particular lender, they will have a minimum credit score requirement for the VA streamline refinance program.

VA Streamline Refinance: What Minimum Credit Scores Apply?

Although each lender has their own guidelines, many lenders right now are requiring their minimum credit score for the VA streamline refinance is 620. There may be a select few that don’t require a minimum credit score, but most of the lenders offering the VA streamline refinance are requiring a 620.

So if your mid credit score is below a 620, and you have a lender (or two, or three…) tell you that they require a 620 minimum credit score, be sure to ask them if they are aware of any other lender who doesn’t require a minimum credit score for a VA streamline.

There is at least one lender out there who currently is still offering the VA streamline with no credit score requirements.

But it could change at any time!

Mortgage Fraud: Is It Worth It?

Lately, there have been quite a few headlines in the news regarding mortgage fraud – both right here in Pennsylvania as well as in the national news. Many experts point to mortgage fraud as one of the reasons that the country is experiencing a housing crisis. And although to some people it may seem to be a case of “too little, too late”, agencies such as the FBI are cracking down on mortgage fraud — and they appear to just be getting started rounding up the bad guys.

From The FBI Website:

Mortgage Fraud is investigated by the Federal Bureau of Investigation and is punishable by up to 30 years in federal prison or $1,000,000 fine, or both. It is illegal for a person to make any false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution. Some of the applicable Federal criminal statutes which may be charged in connection with Mortgage Fraud include:

• 18 U.S.C. § 1001 – Statements or entries generally
• 18 U.S.C. § 1010 – HUD and Federal Housing Administration Transactions
• 18 U.S.C. § 1014 – Loan and credit applications generally
• 18 U.S.C. § 1028 – Fraud and related activity in connection with identification documents
• 18 U.S.C. § 1341 – Frauds and swindles by Mail
• 18 U.S.C. § 1342 – Fictitious name or address
• 18 U.S.C. § 1343 – Fraud by wire
• 18 U.S.C. § 1344 – Bank Fraud
• 42 U.S.C. § 408(a) – False Social Security Number

Mortgage Fraud in Pennsylvania: It Still Happens

Some people think that mortgage fraud doesn’t really happen anymore, but it is alive and well. Chances are that some type of mortgage fraud is happening right here in Pennsylvania, right now. If you are aware of any mortgage fraud victims or scams, be sure to contact the FBI.

Pennsylvania FHA Streamline Requires Minimum 620 Credit Score

Yesterday, it was announced that virtually all lenders in the US now require a minimum credit score of 620 for the Pennsylvania FHA Streamline refinance loan program. TB&W announced that they have decided to follow other major US lenders in requiring a minimum of a 620 credit score for all Pennsylvania FHA streamline mortgage refinances.

Details Of The Announcement

FHA Streamlines (credit and non-credit qualifying) and VA IRRRL’s with Credit Scores below 620 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 620.

Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO. Any Conventional, FHA (including Streamline Refinance), or VA (including IRRRL) loan that exceeds $417,000 with a Credit Scores below 660 must be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered to TBW within 10 days after closing Loans in this category locked on and after July 13, 2009 will require a minimum FICO of 660.

Clients will be required to obtain a 3 Repository credit report and utilize the standard method of determining qualifying FICO. In addition, any previously announced minimum Credit Score requirements that TB&W has put into place, that did not have a specified Closing date, will be required to be LOCKED prior to July 13, 2009 AND must CLOSE (Note Date) no later than September 15, 2009, and must be delivered within 10 days after closing. Therefore, any loan, regardless of whether it may be locked, registered or approved, that has a qualifying credit score below 620 (with the exception of those loans that have specified higher FICO requirements) must CLOSE (Note Date) no later than September 15, 2009.

TB&W will continue to allow non-traditional credit for those borrowers with no useable credit for the loan programs that allow the use of such credit in accordance with published guidelines. TB&W is fully aware that these limitations may result in the inability for a particular loan to meet these specified deadlines. TB&W will work as diligently as possible to accommodate all loans in the pipeline. We will be unable to grant any extensions or exceptions to these requirements.

Pennsylvania FHA Streamline Refinance: What It All Means

Although the FHA guidelines do not officially require a minimum credit score, virtually all lenders (and all of the major lenders) in the US are now requiring a minimum of a 620 credit score. TB&W was the last major US lender who was not requiring a minimum credit score. While there may still be a few smaller lenders who are able to do a Pennsylvania FHA refinance streamline loan with no minimum credit score, it probably won’t be easy to find them.

Stop Foreclosure: Documents Your Lender Needs From You

Today, Freddie Mac released a new video aimed to help people who are in trouble with their mortgage and wondering about a loan modification titled “Stop Foreclosure: Documents Your Lender Needs To Help You“. For anyone right here in Pennsylvania who is speaking with their lender about a loan modification, this video is helpful and shows what documents are needed in the process. With the crush of phone calls from people inquiring about a loan modification, many lenders are swamped. This video does a good job of helping people be more fully prepared in advance of calling their lender.

Pennsylvania Loan Modification: You Will Need These Documents

• A copy of your most recent paystubs that show your net take home pay
• For any other debt such as credit cards, car loans, etc. – have account balances and minimum payment amounts
• Any second mortgage or home equity line of credit statements that you have
• A copy of your last years tax return
• A copy of a recent mortgage statement

Pennsylvania Loan Modification: Hardship Letter Is Important

If you are wondering if you really need to write a hardship letter — don’t wonder. A well written hardship letter is a vital part of the loan modification process.

Pennsylvania Obama Refinance To 125% Announced

Today, it was announced by HUD Secretary Shaun Donovan that people who owed more than 105% of what their home was worth could now refinance up to 125% of the home’s value. This is great news to many homeowners in Pennsylvania because now they can refinance up to 125% of the homes value where the prior limit under the Obama Refinance Plan was 105%. The change from 105% to 125% in the Making Home Affordable plan is just another step that the Obama administration is taking to help prevent foreclosures across America.

Both right here in Pennsylvania as well as all over the US, there will now be thousands of people who currently owe more than 105% of their home’s value take advantage of lower rates while they are available. Now, people all across Pennsylvania will be rushing to refinance while rates are low.

According to the story reported in CNN:

“The president’s Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today’s announcement we will extend its reach still further,” said Donovan.

A story at Bloomberg said:

A drop in values has left about 20.4 million of the U.S.’s 93 million houses, condos and co-ops with mortgages higher than the properties are worth as of March 31, Seattle-based real estate data service Zillow.com said in a report May 6.

What This Means For Homeowners In Pennsylvania

While it is difficult to tell exactly how many people in Pennsylvania will benefit from this change, there are surely many people right here in Pennsylvania who will now be able to refinance, where prior to today’s announcement they were locked out. The best way to find out if you qualify under the new Obama refinance rules is to contact your local loan officer in Pennsylvania and ask them – or contact us for more information.

The first question that many people in Pennsylvania asked when the 8000 tax credit was passed was “can I use the 8000 tax credit for my closing costs?” and as of recently the answer is “yes”.

The Pennsylvania Housing Finance Agency has started a program that “loans” new home buyers the amount of the tax credit they will be due as long as they are using the Keystone Home Loan and the Keystone Home Loan Plus programs to purchase a home anywhere in Pennsylvania. These first time home buyers can now take advantage of monetizing the Home buyer Tax Credit early by using the PHFA Tax Credit Advance Loan Program.

The Pennsylvania Housing Finance Authority short term loan program does not use the tax credit as collateral, but the loan program is setup to not require any payments or accrue any interest until June 2010. It is expected that by accruing no interest and requiring no payments until this time will give the new home buyer enough time to claim their tax credit refund and to then use that money to pay off the PHFA advance loan before payments and any interest is due.

PHFA Tax Credit Advance TCA Loan Program Guidelines

• The TCA Program is only available to first time buyers getting a PHFA first mortgage using the Keystone Home Loan and the Keystone Home Loan Plus home buyer assistance programs.
• The TCA can also be used through PHFA’s special mortgage programs called the PHFA Access Modification Program and the Purchase Improvement Program.
• The TCA is a lien attached to the home which must be repaid before the homeowner can sell their property.
• The TCA can be for the lesser of 10% of the home’s sales price or up to a max of $6000 for a new construction home and $5000 for a resale home. There is a minimum loan amount of $500.
• PA homebuyers planning on using the TCA must occupy the home they purchase.
• Until the end of June 2010 the TCA is interest free and has no payment. If the TCA is not paid in full by the end of June 2010, the TCA converts to a 10 year loan and an interest equal to the interest rate on the first mortgage.
• The TCA cannot be used in conjunction with other closing cost and downpayment assistance programs offered by the PHFA. These programs include: Keystone Assistance Loan, HOMEstead, or the Access Downpayment and Closing Cost Assistance Programs.
• There are no time extensions permitted to paying back the TCA that would extend the interest free period or the no payment grace period good through June 2010.
• The TCA cannot be used in non-arms length transactions such as buying a home from a parent or relative.
• Income and purchase price limits based on the federal tax credit income guidelines or the PHFA income and purchase price guidelines apply – whichever is more restrictive.

For people who are considering buying a home for the first time anywhere in Pennsylvania, chances are they have heard about the Federal tax credit for first time home buyers. We have compiled some of the most useful information here for answers to many of the questions that people have about the first time home buyer tax credit – and even found a helpful video.

More On The Federal Housing Tax Credit.

And for those who prefer to see answers in a video, here is a great one that answers quite a few questions:

Some of the top questions that we have heard from people are also below — if you have a different question after seeing all of these, let us know!

1. Who is eligible to claim the tax credit?
2. What is the definition of a first-time home buyer?
3. How is the amount of the tax credit determined?
4. Are there any income limits for claiming the tax credit?
5. What is “modified adjusted gross income”?
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
7. Can you give me an example of how the partial tax credit is determined?
8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
9. How do I claim the tax credit? Do I need to complete a form or application?
10. What types of homes will qualify for the tax credit?
11. I read that the tax credit is “refundable.” What does that mean?
12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
16. I am not a U.S. citizen. Can I claim the tax credit?
17. Is a tax credit the same as a tax deduction?
18. I bought a home in 2008. Do I qualify for this credit?
19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?

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Please contact us directly with any questions that you may have about mortgages and we will work hard to provide the right answers!