Homebridge is updating our VA IRRRL policy regarding fee recoupment and payment test requirements.
Fee Recoupment
Fees must be recouped within 36 months or less (no change) unless:
- The existing loan is being refinanced from an ARM to a Fixed rate (no change), OR
- There is a minimum 6 month term reduction AND the P&I increases on the new loan (P&I increase new)
NOTES:
- P&I increase is a VA requirement
- Term reduction is measured from the existing remaining term of the loan being refinanced
- Term reduction applies to fixed to fixed loans only; ineligible on ARM loans
Effective Date – Term Reduction/Payment Increase to Waive Fee Recoupment
The new requirement for the P&I to increase when term reduction is used to satisfy the fee recoupment test is effective with loans submitted on or after June 6, 2019.
Payment Test
HomeBridge has simplified the term reduction requirement when meeting the payment test; now just a single requirement (previously requirements varied by number of months term reduced)
The principal and interest payment on the new loan must decrease (no change) unless:
- The existing loan is being converted from an ARM to a Fixed (no change), OR
- There is a minimum 6 month term reduction (new). Term reduction is measured from the existing remaining term of the loan being refinanced and applies to fixed to fixed loans only.
Effective Date – Term Reduction to Satisfy Payment Test
The new single requirement for term reduction to meet the payment test is effective with loans submitted on or after June 6, 2019.
The IRRRL guidelines have been updated to include a new topic “Loans Submitted on or after June 5, 2019
