Yesterday, HUD announced that there is significant help coming for many of its current mortgage holders. In a surprising announce (and sure to confuse some due to other changes), FHA announced 'price cuts to encourage streamline refinancing' (link to the HUD press release).
There are two general requirements for borrowers who currently have an FHA insured mortgage. First requirement is that the borrower has to be current on their FHA insured mortgage. The idea is to reward responsible borrowers for staying current on their mortgages. The second requirement is that the FHA insured mortgage must habe been originated on or before May 31, 2009.
HUD states that 3.4 million households with FHA insured mortgages stand to potentially benefit from this program. That is a lot of people. The savings to these existing borrowers will be partly paid for with increasing upfront premiums from 1.0% to 1.75% on mortgages endorsed starting April 9, 2012. So buyers need to move quickly to avoid the increase in the FHA Upfront MIP. And moving quickly in metro Atlanta is tough as inventory is at low levels these days.
So my question is how many of these 3.4 million households can truly benefit from this new program? If they have been current on their mortgages up until this point, I would think that most of them have taken advantage of the low interest rates currently available.
Maybe there is a population that is current on their mortgage but not current on other obligations making it not possible for them to be refinanced under current rules.
Lenders, what do you think of this 'new' program to help folks with an FHA mortgage?
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