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About Jim Hoepf
Expertise
I have a diverse background that allows me to answer questions regarding underwriting, collections and industry changes.

Experience
I have 18 years of experience in the industry. I have an extensive underwriting background that allows me to have a greater understanding of how to properly structure a loan for approval. I have been cohost of the local radio show Real Estate Matters for the last four years. I have owned and operated my own brokerage firm for the last 10 years. Along with originating and underwriting I have also handled mortgage delinquency and the foreclosure process.

Education/Credentials
BS in Business Administration from Bluffton University. I have also participated in numerous underwriting workshops put on by Fannie Mae and lenders in the Phoenix area.

Awards and Honors
Broker of the year for Arizona with Homeside Lending.

You are here: Experts > Shopping > Home Buying/Selling > Real Estate Home Mortgages > .75 condo LLPA

Real Estate Home Mortgages - .75 condo LLPA

Expert: Jim Hoepf - 10/29/2009

Question
QUESTION: I have a client buying a home that is being charged a .75 pt on a detached condo that is FA approved. I understand that Fannie Mae no longer requires this. The lender is saying that Freddie Mac still does. I do not find anything that supports this and feel my clients are being charged unfairly. Can you shed some light on this?

ANSWER: Donna,

I have done my homework and Fannie Mae does have a .75 Loan Level Price Adjustment for Condo's over 75% loan to value. Normally this is factored into the interest rate and figured into the yield spread premium. What rate is your client being charged and how long ago was the rate locked? I think your lender may be trying to make a little extra money and putting the blame on Freddie/Fannie.

---------- FOLLOW-UP ----------

QUESTION: The home is a detached condo and according to what I find Fannie Mae has waived the .75 as of September on detached condo's, but according to the lender Freddie Mac does charge it. They locked at 5% and 3/pt. September 8th or so, then the lender came back a week later and said they needed .75pt due to being a condo. They are putting 20% down. The lender stated they are not sure who they will sell the loan to so they need to charge the extra points. I think this is unfair and unnecessary. What are your thoughts?

Answer
Donna,

I would assume they know who the loan is going through....the automated underwriting should have already been done and at that point they have an idea where its going. If they are paying 3 pts to get this loan, they are already being taken advantage of. Industry standards are roughly 1 pt in origination fees. The .75 should have been in the rate or the original points they were paying.

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About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here