fha: FHA's 1 Year Waiting Period After Short Sale Bankruptcy or Foreclosure - 08/17/13 09:02 AM
Where was this three years ago? Better late than never I suppose. FHA is now insuring loans to homebuyers who have experienced an Economic Event (Short Sale, Bankruptcy, Deed in Lieu of Foreclosure or Foreclosure) in the past and can document that (1) their certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control, (2) the homebuyer has demonstrated full Recovery from the event and, (3) the homebuyer has completed housing counseling.
FYI, in the event of a short sale, this is for buyers who DID have late mortgage … (35 comments)

fha: FHA Seller Paid Closing Costs to be Reduced - 01/22/12 03:21 AM
To much fanfare, FHA announced measures to better protect their insurance fund in a recent Final Ruling published in the Federal Register.  Slipped in as a footnote to this announcement was a declaration that FHA is deaf to the concerns of the real estate industry.  They are taking aim to again attempt to reduce the allowable seller paid closing costs.  Make no mistake; they wouldn’t be doing this twice if they didn’t fully intend to see it through this time (regardless of industry feedback).
First, a little history (with a touch of nerdy stuff).  On July 15th of 2010, FHA proposed … (3 comments)

fha: What are Compensating Factors When Qualifying for a Mortgage? - 04/24/11 01:46 PM
Although we wouldn’t know it from watching the six o’clock news, mortgage underwriting guidelines and mortgage insurance underwriting guidelines have been in a pattern of loosening, not tightening. This trend started in late 2009 and continues today with such examples as lower minimum credit scores for mortgage underwriting guidelines and fewer declining markets for mortgage insurance guidelines. As this has happened, another trend has emerged. The phrase “underwriting exception” is coming back in practical contexts rather than a nostalgic reference to days gone by. These days, underwriting exceptions are more and more common where a mortgage loan file has “Compensating Factors.”
At … (1 comments)

fha: Administration to Reform Fannie Mae and Freddie Mac - 02/11/11 05:01 PM
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fha: C’Mon Minnesota Legislature, . . Just Ban Deficiency Judgments - 11/27/10 11:12 AM
In some regards, the MN legislature was ahead of the curve on the mortgage and housing crisis. They regulated non-bank lenders and brokers in ways that other states hadn't even considered. They got ahead of abusive practices towards distressed homeowners and shady loan modification companies. What they have unequivocally failed at is aiding homeowners who are upside down on their homes. Their greatest impact could be with those contemplating a short sale.
Other states have already taken steps. Perhaps the best example would be those taken in California. For some time now, CA has not allowed deficiency judgments in the case … (6 comments)

fha: What Does SB931 Mean to Your Seller? . . . It Means That They're a FHA Buyer! - 11/27/10 08:27 AM
 
California has taken a clever step towards opening doors for homeownership.  A primary intention of this bill no doubt was to flush the market of negative equity and aid struggling homeowners.  It has an added benefit of streamlining continued homeownership for those who will do a short sale after January 1, 2011 by making a difficult FHA loan approval that much easier to get done.
                Buying a home after a short sale has been possible through FHA for some time now.  While many investors are willing to purchase and securitize these loans, few have been originated because there are two … (18 comments)

fha: FHA Mortgage Insurance and Seller Concession Changes – Ramifications - 09/01/10 07:11 PM
HUD has regrettably increased the annual mortgage insurance premium and soon will have succeeded in reducing the allowable seller concessions.  It's easy to know that this will have a big impact but it will actually change the lending landscape by dramatically decreasing FHA's presence in the marketplace and shifting loan volume to Fannie Mae and FreddieMac who share an uncertain future to say the least.  It will also shift loans to private mortgage insurers, most of whom are either financially anemic or are still reeling from the volatile markets of the last 2.5 years.  And it needn't be said that the private … (20 comments)

fha: Buying a Home after a Short Sale - Don't Believe the Naysayers - 05/29/10 08:02 PM
I've written on this subject before but I want to be more thorough this time.  There have been too many articles put out lately that discourage people from contemplating a home purchase after doing a short sale.  These articles express cynicism about home sellers' financial habits and Realtors alike.  Most Realtors doing short sales know how to cover the bases for their client to make sure they're in a good position to buy a home down the road.  Further, in my area (Saint Paul, MN), nearly 39% of homeowners are upside down on their home.  Only a minority of these homeowners … (8 comments)

fha: Before You Shop for a Condo, Pre-Qualify Your Lender First - 02/20/10 05:22 PM
If you’re a FHA buyer shopping for a condo, you’d better pre-qualify your lender first. If you’re listing a condo and a buyer gives you a FHA pre-approval letter, you’d better pre-approve that lender first. Because Spot Approvals are a thing of the past, it’s important to know which of the two remaining FHA condo approval processes your lender will be using: Direct Endorsement Lender Review and Approval Process (DELRAP) or HUD Review and Approval Process (HRAP) as outlined in MORTGAGEE LETTER 2009-46 B.
DELRAP is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and … (47 comments)

fha: FHA Annual MIP Increase and Reduction in Seller Paid Closing Costs - A letter to congress - 02/08/10 07:32 PM
I’m writing in opposition to two of the eight recently proposed changes by the Department of Housing and Urban Development on their single family insurance programs.  While most of the proposed changes will bolster the financial well being of the FHA, these two changes are misguided in their design and fail to fully contemplate their short term and long term consequences.   Most disconcerting is that they are antithetical to HUD’s articulated purpose and, in one instance, may jeopardize FHA’s long term health.
HUD is seeking congressional authority to raise annual mortgage insurance premiums from .55% of the loan amount per year … (20 comments)

fha: FHA Changes Announced – An Outline & Call to Action - 01/20/10 09:18 AM
In today’s press release from HUD, “FHA ANNOUNCES POLICY CHANGES TO ADDRESS RISK AND STRENGTHEN FINANCES,” FHA policy changes, additional desired changes and reasoning for the changes are announced in detail. The material changes are already becoming well known but the potential changes along with alternative approaches to FHA solvency are what we should really be paying attention to.
Briefly, here are the material changes that HUD will make within its existing authority:
1. The first step will be to raise the up-front MIP by 50 bps to 2.25%. (how this increase will be applied will be covered in a mortgagee … (9 comments)