Seasoning requirements updated on refinances

Got this from TB&W but may become std for other lenders as well:

 

These changes were specific to our seasoning requirements on refinance transactions and what allowable exceptions may be made.  However, to provide better clarification we are specifically outlining those changes in this separate announcement as listed below.

 

Rate/Term Refinance

 

Seasoning Requirements

·         Borrower must be on the current mortgage being paid off a minimum of 6 months prior to application date; AND

·         Borrower must have been on title, as an individual or an approved living trust, for a minimum of 6 months prior to application date; OR

·         On title of a property that was owned free and clear prior to being transferred to the borrower; OR

·         Have inherited the property

Exceptions to Seasoning Requirements

·         Evidenced by the previous HUD-1 that the borrower did not receive any cash back on refinance transactions and provided the minimum required investment into the transaction on purchases; OR

·         Evidenced that the previous cash out was a result of an executed court order (such as divorce, etc.) or extenuating medical circumstances; OR

·         Evidence that the previous cash out resulted in significant enhancements or rehabilitation of the subject property (copy of previous appraisal and documentation of all enhancements or rehabilitation will be required)

Files that have been verified by the Underwriter to meet the Seasoning Exception Requirements do not need to be submitted for an Exception Request

 

Cash Out

 

Seasoning Requirements

·         Borrower must be on the current mortgage being paid off a minimum of 6 months prior to application date; AND

·         Borrower must have been on title, as an individual or an approved living trust, for a minimum of 6 months prior to application date; OR

·         On title of a property that was owned free and clear prior to being transferred to the borrower; OR

·         Have inherited the property

There are no exceptions to the Seasoning Requirements on Cash Out Transactions.

 

Sunil Sethi

Main (510 793-8600

Cell   (510) 388-2436

Fax   (510) 431-9046  
sunil@sunilsethi.com

www.sunilsethi.com