There has been a lot of talking going on about H.R. 1852, also known as the FHA Bill. We all need to support this bill! This bill is going to assist a lot of homeowners who are facing foreclosure and those borrowers whose interest rates are going to increase in the next 12-18 months. That means we can start saving some of these homes and families in trouble.
Here is a general breakdown of the bill so far, including amendments, although it is still in the Senate and may be modified again.
Raises the loan limits of FHA to 125% of the Median home Price in the area (I.E. Los Angeles median home price is $550,000, then the FHA Limit would be $687,500)
Extends mortgage terms from a maximum 35 years to 40 years
Establishes New Underwriting Guidelines for Borrowers with a FICO score equivalent of under 560
Includes additional borrower protections, including mortgagee disclosures and mortgagor counseling, particularly foreclosure prevention counseling, mandatory for higher risk mortgages (low and no down payment loans).
Eliminates Restrictions on Home Equity Conversion Loans (FHA can no do an unlimited amount of these types of loans)
Requires mortgage companies to notify foreclosure prevention counseling services and have them contact borrowers who are over 60 days late with payments to offer counseling services funded by the Secretary of Housing and Urban Development
Establishes Penalties for Escrow & Mortgage Servicer's who fail to pay the taxes and insurance premiums from the escrow impound accounts. Also mandates that this cannot go on a credit report of the borrower(s).
Limits the acceptable form of Identification to: 1) Social Security Card with Photo ID of REAL ID Act Identification, or 2) A Passport and 3) U.S. Citizenship and Immigration Services ID Card
Amendment allows qualified down payment assistance providers to participate in the FHA program if certain conditions are satisfied to ensure that the down payment assistance program is legitimate and that the gift that is provided to the homeowner and the home buyer is truly a gift.
Amendment requires the Secretary of Housing and Urban Development to ensure high-risk borrowers and borrowers who are applying for zero down-payment loans to receive housing counsel.
Unfortunately it may eliminate some brokers from doing FHA loans as they are changing the requirements for originating FHA loans. These include:
FHA Brokers will be required to post a $75,000 bond to do these loans (Eliminates existing net worth and annual audit requirements)
Sets Maximum Origination Fee to 1.5% of the loan amount
If you want to read the entire bill, including all amendments, click here.
This bill is going to help so many people, however the Senate has yet to vote on it. They may not even get to it before they go on their Christmas break next month. We need to get them to vote on this before then! Let's start calling our Senators and get them voting on this right away!
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