Through the painful beginning to 2010, it has become obvious we all will have to work much harder than we have been accustomed to. I truly believe our diligence and extra efforts will bear fruit as this year progresses.

Just as we grew comfortable with HVCC, we were hit with RESPA and the new GFE; makes us feel like we are trying to suck a golf ball through a garden hose, just makes us dizzy. In 60 days, this too will become old hat.

As a lender, we now have a Compliance Underwriting Department and a Valuation Department. The new regulations demand new jobs, which inevitably brings increased costs. We do not feel raising our rates is an option and some of our competitors seem so desperate for loans they are pricing to lose money in the secondary market. The good news for us is we will likely have fewer competitors in the near future.

In order to help absorb the increased costs resulting from our two new departments, we have decided to raise our Administration/Commitment Fee from $700 to $800. We will also remove the HVCC Administration Fee of $50. Hence, our net fee increase is $50. After researching our competitors, this fee will keep us competitive in overall costs.

The fee change will be effective for any file submitted to Primary Capital on or after March 15, 2010.

Hang in there, work harder and embrace the new regulations, and you will find yourself leaving your competitors in the dust!

George S Phelps
Executive Managing Director
gphelps@primarycapital.com
678 298 0201 (P)
678 306 0201 (F)

Please be advised, Primary Capital Advisors LC will accept all FHA appraisal requests through the Primary Capital Valuation Department effective for all case numbers assigned on or after February 15, 2010 for all PCM approved brokers and correspondents.

Primary Capital is implementing this procedure due to FHA Mortgagee letter ML-2009-28 related to appraiser independence. (Note: full version can be found on Allregs or HUD website)

The procedure to order a FHA appraisal is the same procedure as ordering a conventional HVCC appraisal and should be ordered using Primary Capital's online appraisal ordering system. Brokers and Correspondents can order the case number and will need to provide the case # at the time they order the appraisal. If a case number is not provided, additional borrower information is required at time of order to complete the Case number request in FHA Connection. (See page 2 for a screen shot listing all specific data required to place an order.)

ML 2009-28: Appraiser Independence (09/18/09)
This Mortgagee Letter provides clarification and reaffirms Federal Housing Administration (FHA) appraisal requirements related to appraiser independence and announces new requirements pertaining to entities that are eligible to order appraisals for FHA insured mortgages. FHA has long advised lenders and appraisers of the importance of appraiser independence in the context of generally accepted prudent lending practices. In this mortgagee letter, FHA reiterates the importance of appraiser independence, and advises of new requirements regarding who is eligible to request an appraisal from an FHA Roster appraiser. The new requirements set forth in this mortgagee letter will be effective for all case numbers assigned on or after February 15, 2010.. The existing requirements will remain in effect.

New Requirements
Prohibition of mortgage brokers and commission based lender staff from the appraisal process Historically FHA prohibited mortgagees from accepting appraisal reports completed by an appraiser selected, retained or compensated, in any manner by real estate agents. To ensure appraiser independence, FHA approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisers who are selected, retained or compensated in any manner by a mortgage broker or any member of a lender's staff who is compensated on a commission basis tied to the successful completion of a loan.

Appraiser Selection in FHA Connection
Lenders are responsible for assuring that the appraiser who actually conducted the appraisal used for the FHA insured mortgage is correctly identified in FHA Connection. FHA has found that, on numerous occasions, the name of an appraiser in the appraiser log-in screen is not the appraiser who actually completed the appraisal. Lenders who fail to assure that the FHA Connection reflects the correct name of the appraiser will be subject to administrative sanctions.

Primary Capital is changing its policy as it applies to Good Faith Estimate revisions. We will no longer accept multiple re-submissions of the GFE. During the month of January, we tried to be as lenient as possible, giving our brokers a chance to learn the changes resulting from RESPA. However, some GFE’s have been re-submitted numerous times, creating a bottleneck, and effecting our turnaround tremendously.

Effective February 1, 2010, if the initial GFE is incorrect, our underwriters will mark up the form with necessary corrections and send it back to the broker ONE TIME. If the second GFE is incorrect, this is the form that will be used, and the broker will be responsible for any financial discrepancies at closing.