The FHA 203(b) Loan Program - STM Partners

Refinances
Types of
Refinance
Transactions
SunTrust Mortgage offers the following types of refinance transactions:
• Cash Out Refinance (85.00% LTV), Rate/Term Refinance, and
• Streamline Refinances (FHA loan to FHA loan)
• Credit Qualifying with an appraisal
• Credit Qualifying without an appraisal
General • A new FHA appraisal is required for each refinance transaction requiring an
appraisal. An appraisal used for the purchase of the property cannot be used
again for a subsequent refinance even if 120 days has not passed.
• All Rate/Term refinance and Streamline Refinance transactions must have a
payoff statement in the file.
• The payment due in the month the loan is closing must be paid either prior to
closing or included in the payoff amount at closing. (i.e., if the borrower closes
and funds on a refinance in the month of December, the borrower does not need
to have made the December payment. However, if the loan doesn’t close/fund
until January, the December payment cannot be included in the loan amount and
the borrower will need to pay the December payment from his/her own cash.)
• All subordinated financing, whether it will be subordinated to the new SunTrust
mortgage or will be paid off by the new SunTrust mortgage (unless FHA’s more
restrictive twelve (12) month period applies), must be seasoned for at least six
(6) months with 0x30 day late payments (i.e., six (6) permanent mortgage
payments made) prior to application for the new SunTrust mortgage.
• Confirm the borrower is current on the mortgage being refinanced for:
• the month prior to the month in which they close, and
• the month they close.
Note: The borrower has the option to make the current payment at the
beginning of the month or include it in the payoff amount at closing, when closing
within the month the payment is due.
• SunTrust Mortgage will not purchase any FHA loan where the tax, hazard and/or
flood insurance escrows are netted from the unpaid principal balance of the FHA
loan being paid off (i.e. principal balance cannot be reduced by escrow account
balance). Refunds of any tax and insurance escrow account balances are paid
directly to the borrower within 30 days after the existing loan is paid off.
• SunTrust Mortgage will not purchase any FHA loan where the tax, hazard,
and/or flood insurance escrows are transferred (rolled) from the unpaid principal
balance of the FHA loan being paid off, to the new loan, in order to fund the new
escrow account. Refunds of any tax and insurance escrow account balances
are paid directly to the borrower within 30 days after the existing loan is paid off.
Continued on next page
Section 2.22 July 27, 2012
FHA 203(b) Loan Program Page 44 of 217
Correspondent Seller Guide