March 7, 2018 at 7:18 pm #40891
I read from @ttrumble, HOEPA limits the total points and fees which can be contributed by the buyer to 7% of the loan amount (7 points) total.
The handbook states, “Note: this program is subject to change. Members above the median income are generally limited to buy-down points not exceeding six (6) points. Seller contributions for the NACA Buy-Down is limited to 10% of the property’s contracted sales price. The NACA Buy-Down cannot be financed with an increased purchase price. A seller contribution greater than six percent may initiate a risk review by the participating lender to verify that the NACA Buy-Down was not financed as part of a higher sales price.”
My MC confirmed although HOEPA allows 7 points BofA only allows 5.5 points for a buyer contributed buydown.
BofA sent an email today advising I could only buy down the rate 5 points and not 5.5 points.
I took out money from my 401k to buy the rate down from 4.125% to 2.75%, but according to BofA I can’t go below 2.875%.
“NACA COC: Lowest rate member can buy down to is 2.875% due to HOEPA limitations”
Did the HOEPA limits change or did BofA change their guidance again?
If the HOEPA limits changed does that mean regardless on who the loan is with CITI or BofA the max buyer contributed buy down is now 5 points?March 12, 2018 at 11:19 am #40918
I didn’t get much help from my MC, but I did find a contact through another bank to explain the process and they confirmed the max buyer contributed buy down is 5 points for my particular loan.
Question to my MC: I’m following up on our question on the IR change. Do you know why BOA advised the lowest we would buy down the rate was 5 points and not 5.5 points? Has HOEPA changed recently to where the max points is now 5?
Response from my MC: It’s what Bank of America gave us.
Question to my MC:Do you have a contact at Bank of America that I speak to?
I would like to understand why the points buy down decreased from 5.5 points to 5 points. 2.875% is a still a good interest rate, but no one has explained to me why there was a change beside the initial e-mail that it was a HOEPA violation. Specifically, how is it a HOEPA violation? What criteria is being used to say 5.5 points is a HOEPA violation.
Response from my MC: There is not one to speak to at BofA
.March 12, 2018 at 11:26 am #40919TTrumbleMember
I’ve gotten a few messages such as this one lately. Long story short, if there has been a change, I didn’t get the memo (literally). I’m looking into the situation and will let you know as soon I hear something.
Online Operations, NACA
email@example.comMarch 12, 2018 at 1:09 pm #40930
@searching4homes Is there a way that you can get a seller’s contribution so you can decrease it even more? or, would you be able to afford a 15 year mortgage? I am asking because each point in a 15 year loan is half a percentMarch 12, 2018 at 1:26 pm #40933
We would love to take a 15 year, but it just doesn’t line up with our goal. We did look at that option and it was tempting to take, but the original plan in buying a home was if one of us was to lose our job, the mortgage payment would need to be low enough for 1 of us to cover the mortgage plus utilities. United we could knock a $1700 mortgage payment (15 year) out of the park! However, if we went down to 1 income, there would be a real struggle especially if it was my income out of the equation.
Although we would be paying more in interest with this 30 year, our goal is to add more to the principal each month to pay the loan down faster. Realistically, we can turn our 30 year into a 15 year (just won’t get the same perks) with keeping in mind we’re only obligated to the 30 year payment if a hardship should occur.March 12, 2018 at 1:39 pm #40934
15 Year at 30 Year IR = $1890.00
15 Year at 15 Year IR = $1714.00
Math may be a little off as I didn’t use a payoff calculator, but it’s in that ballpark.March 14, 2018 at 1:47 pm #40984
wow! I understand your reasons, but with a $176 difference, I wouldn’t doubt about going for the 15 year, think about it, the money for the buydown would be worth so much more, and the interest is lower for the 15 year loan without taking into consideration the buydown… If it was like $500 difference, that’s harder to take the risk, but if it’s only $176, I wouldn’t think about it twice, but that’s just me, I hope you make the best decision 😉March 15, 2018 at 8:20 pm #41003kirkan1981Member
Hello original poster have you heard anything back from Tim yet? BofA is the lender in my state and I am wondering about this.March 15, 2018 at 9:32 pm #41005March 20, 2018 at 9:01 pm #41066kdstpeteMember
Hello @searchingforhomes any updates on this?March 20, 2018 at 9:52 pm #41068March 21, 2018 at 12:28 pm #41077April 23, 2018 at 10:51 am #41637
Has there been any updates on this issue? I have a family member going through NACA and trying to give her as much information as possible.April 23, 2018 at 2:54 pm #41657TTrumbleMember
By any chance are you in Connecticut?
Online Operations, NACA
firstname.lastname@example.orgApril 23, 2018 at 5:49 pm #41665
No, I reside in North Carolina.
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