ANNOUNCEMENT 08-02

 

NEW FICO SCORE RESTRICTIONS

 

Due to dramatic and hopefully temporary changes in the secondary mortgage market, Security Atlantic Mortgage has been forced to implement certain credit score based adjustments and program limitations. Below is a summary of the changes, effective dates and deadlines that apply:

 

  1. Effective Friday February 8, 2008, will we no longer accept any FHA loans with low middle scores of 530 or below.

 

  1. Existing Level 5 loans (loans with a credit score under 531) in our pipeline can be closed using existing Level 5 pricing up until Friday February 15, 2008.  Effective Tuesday February 19, 2008 there will be a price increase which will apply to all Level 5 loans still in the pipeline.  This price increase will result in a significant below par price; there may be a cost of one or more points to close the loan after this date.

 

  1. Effective February 8, 2008, all new loans received with low middle scores from 531-579 will no longer be eligible for our Standard FHA Program.  These loans will now be underwritten and priced in our FHA SUB 580 Program, which will have significantly worse pricing than the Standard FHA Program.  The approximate price difference between the two programs is currently 1.50%.  This difference will be subject to daily market fluctuations.  Both programs will be listed on our daily price sheet.  In addition, both programs will still be subject to our manual underwriting Level Scoring system already in use.

 

  1. Existing loans in our pipeline meeting the criteria for our FHA SUB 580 Program (low middle credit score of 531-579) can be closed in our Standard FHA program through Friday, February 15, 2008.  After that date, all loans with low middle credit scores between 531-579 must be closed using FHA SUB 580 pricing.

 

  1. By implementing this two-program system, we have been able to improve our Standard FHA pricing.  Please look for improvements starting tomorrow, February 8, 2008 in our Standard FHA Product (low middle score 580 and above).

 

We regret having to implement these changes; please understand that this is a direct response to secondary market pass-through costs being imposed upon us.  Please keep in mind that this is a dynamic marketplace and more changes may occur for better or worse at any time.  We apologize for the obvious inconvenience that this will cause.  We deeply value our business relationship, and will do everything in our power to get your loans closed by the deadline dates.

 

Noel M. Chapman, EVP