Maximum VA Loan county limits updated for 2016

Maximum VA Loan county limits updated for 2016

The Department of Veterans Affairs Loan Guaranty Program recently published county “limits” to be used for VA Loans effective January 1, 2016.

Please note, these limits do not reflect a maximum amount that an eligible veteran is permitted to borrow, but rather, reflects the VA’s maximum guaranty amount for a particular county. The maximum VA guaranty amount for loans over $144,000 is 25% of the 2016 VA limit.

For example, an eligible veteran may borrow up to $625,500 to purchase a property in Washington, DC (2016 VA limit), with the VA guaranteeing 25% of the loan amount, or approximately $156,375.00. These amounts have remained unchanged in most of the DC Metro Region compared to the 2015 VA limits.

The limits listed below are for some counties in Maryland and Virginia, as well as for the District of Columbia. For a complete list of the county limits for 2016, please click the chart of conforming loan limits. If your county is not listed on the county limits chart on the VA website, the 2016 limit is $417,000.

State
County
2016 VA Limit
DC
District of Columbia
$625,500
MD
Anne Arundel
$517,500
MD
Frederick
$625,500
MD
Howard
$517,500
MD
Montgomery
$625,500
MD
Prince George's
$625,500
MD
Alexandria
$625,500
VA
Arlington
$625,500
VA
Fairfax
$625,500
VA
Falls Church
$625,500
VA
Fauquier
$625,500
VA
Loudoun
$625,500
VA
Manassas
$625,500
VA
Prince William
$625,500

CFPB proposes effective date of Oct. 1 for new mortgage disclosure rules

Title companies and lenders who are bracing for one of the biggest shake-ups of the mortgage industry in decades may have a couple more months to prepare. 

The director of the Consumer Financial Protection Bureau announced a proposed amendment to push the effective date of the new mortgage disclosure rules from August 1, 2015 to October 1, 2015

The proposed amendment is up for public comment, and a final decision will be made afterwards; however, for all intents and purposes the new effective date is now October 1, 2015.

The CFPB discovered an "administrative error" in meeting the requirements of federal law, which ultimately resulted in the effective date being pushed into the fall. 

In a statement issued yesterday regarding the Know Before You Owe mortgage disclosure rule, Director Richard Cordray said:

"The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time." 

Implementation of the new mortgage disclosure rules is expected to cost settlement service providers $67.8 million and lenders $207 million over the next five years, bringing the total cost to $1.3 billion.

Representatives from the American Land Title Association, American Bankers Association and Finance Policy Center for the Urban Institute testified before Congress last May, asking for a "hold harmless" period through the end of this year. 

So far efforts to establish a hold harmless period have been unsuccessful, while the proposed amendment is expected to go final shortly. 

Choosing your own title company - yet another reason

Two of the largest financial institutions in the country are having their feet held to the fire over blatant violations of the Real Estate Settlement Procedure Act, according to a complaint filed in federal court last week by the Consumer Financial Protection Bureau and Maryland Attorney General.

The complaint involves employees of Wells Fargo and JPMorgan Chase who participated in a kickback scheme with a now-defunct Maryland title company Genuine Title in which loan officers received cash, marketing materials and customer information in exchange for referrals. 

"This type of quid pro quo arrangement is illegal, and it’s unfair to other businesses that play by the rules," said Maryland Attorney General Brian Frosh.

More than 100 loan officers from at least 18 Wells Fargo branches allegedly participated in the scheme as did at least six loan officers from three Chase bank branches, according to the complaint. Consequently, Wells Fargo is facing $24 million in civil penalties and $10.8 million in redress while JPMorgan Chase faces $600,000 in civil penalties and $300,000 in redress. 

The details of the complaint reveal blatant RESPA violations going back to 2009 and involving thousands of home loans and tens of thousands of dollars. Genuine Title went so far as to foot the bill for direct-mail campaigns and branded marketing materials. They even paid some loan officers cold, hard cash. 

One former Wells Fargo loan officer was singled out by name in the complaint for accepting cash payments. His then-girl friend, now-wife was also identified in the complaint for taking the payments on behalf of the loan officer to disguise the arrangement. They will pay a $30,000 penalty. 

The huge dollar figures and overt rule-breaking are not what makes this case special, though. What makes it special is the offenders got caught and will face their day in court. For those of us in the trenches – the so-called "rule abiders" of the title industry, fighting the good fight independently – we are aware that this kind of thing occurs all too frequently and we can only shake our heads. 

The truth is most consumers still don't know they can select their own settlement service provider. Nine times out of ten, the homebuyers we encounter say they just went along with whatever their agent or lender recommended because it was convenient. They have no idea about the potential for a conflict of interest and how they could be saving hundreds of dollars by choosing their own independent title company. 

The only way to combat this sad fact of the home buying experience, is to get the message out to consumers as well as the businesses who seek to take advantage of them. We fully support the CFPB and other government regulators who shine a light on these anti-consumer and, often, illegal business pursuits. 

FHA to reduce cost of mortgage insurance

In an attempt to bring more First-Time Homebuyers back into the housing market, the Federal Housing Administration ("FHA") recently announced that it would reduce its annual mortgage insurance premiums from 1.35 percent to 0.85 percent.  

This is estimated to save borrowers approximately $1,000 per year on a $200,000.00 loan, for example.

After requiring a $1.7 billion bailout from the federal government as a result of a high number of loan defaults during the financial crisis in 2013, FHA more than doubled the mortgage insurance premiums to rebuild its funds and raised the average credit scores required in order to qualify for an FHA loan.  

Now that FHA has started to earn profits, industry insiders called for FHA to reduce the insurance premiums to allow more borrowers back into the market.  FHA has also stated that they will take additional steps over the upcoming months to reduce additional mortgage costs by cutting red tape and making lending standards more clear.

The new policy is expected to go into effect by the end of January 2015.

Timely recordings for DC properties thanks to e-recording

Once a deed is signed, sealed and delivered, the transfer from seller to the buyer has taken place. It is not legally necessary or required for the document to be recorded.  

However, in order to protect the buyer’s interest in the property, Federal Title & Escrow Company records the deed with the Land Records office, providing constructive notice that the property has transferred.  

By recording the deed, another party is prevented from recording a document (such as a lien, judgment or even another deed) that could cloud the chain of title. It also provides notice of who is the owner of the property. 

Back in 2011, Federal Title started using DC’s e-recording process. The results have been outstanding. Previously, a recording had to be physically delivered to the DC Recorder of Deeds.  These manual recordings were often met with recording delays, as the recording process required the coordination of efforts among the Recorder (i.e. the person standing in line for hours at the Recorder of Deeds to obtain the Clerk’s recording receipt) the courier/mailing service, the settlement company and the Recorder of Deed office.  

The manual recording process provided only a Recorder’s receipt at the time of recording, and the recorded Instrument was mailed to the settlement company within six months of the actual recording date.  

Now with electronic recording, the recording process in DC is completed within hours of the settlement, as the process involves only the settlement company and the Recorder of Deeds!  

The best part is, the client is provided not just with a Recorder’s receipt to evidence that the document has been recorded, but also with the fully recorded document upon the completion of the recording process.

What does this mean to clients?  

It means that a deed is on record the same day of your closing, typically within hours. This greatly reduces the risk of fraud, conflicting recordings or lost documents.  

The DC Recorder of Deeds office has been at the forefront of the industry and deserves considerable praise for establishing a method to record that has been easy to use and helps protect the interests of all parties.  

Not all title companies are using e-recording, but Federal Title recognized early on the benefits of adopting e-recordings and our clients are benefitting by knowing that their documents are recorded in the District of Columbia within hours of the closing – just another example of how Federal Title embraces technology to improve closings. 

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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.