fha: MIP Reduction Takes Effect - Some Other Considerations
- 01/27/15 07:04 AM
You are no doubt aware that the reduction in the FHA premiums for mortgage insurance went into effect yesterday, 01.26.2015. There are a number of people with FHA loans that might benefit from refinancing their existing FHA loan into another FHA loan with lower MIP. As stated in an earlier post entitled, "More Level Playing Field May Benefit FHA" the Wall Street Journal estimates that there are about 3,000,000 existing FHA borrowers who could benefit from refinancing into a new FHA loan. In an article appearing today in Mortgage News Daily a representative of Indecomm, a mortgage document management company, indicated … (10 comments)
fha: More Level Playing Field May Benefit FHA
- 01/23/15 02:07 AM
Private mortgage insurance premiums are higher for people with lower credit scores. FHA mortgage insurance premiums are the same for all FHA borrowers regardless of their credit score. The Urban Institute recently posted a blog that indicates that the break-even credit score with a 95% LTV has risen from a FICO score of 680 to a score of 740. The blog points out some interesting scenarios that may well benefit FHA and / or FHA borrowers. While the Obama administration estimates that approximately 2,000,000 new FHA borrowers will be benefited by the lower FHA MIP rates, the Wall Street Journal estimates that an … (12 comments)
fha: Washington Post Blasts FHA
- 01/21/15 07:22 AM
Did President Obama act too hastily in lowering the FHA Mortgage Insurance Premiums? According to an editorial in the Washington Post the FHA MI premiums should not have been reduced as the FHA has not restored completely its capital reserve, and as recently as September, 2013, FHA had to take a bailout of $1.7 billion from the federal governement to cover losses incurred as a result of "overly aggressive policies prior to the 'Great Recession'". While the FHA has been working to restore its capital reserves, the reserves stand at approximately 0.41% of the value of its portfolio as of the … (7 comments)
fha: Clarification of FHA MIP
- 01/17/15 07:29 AM
With the recent reduction of the mortgage insurance premiums ("MIP") by FHA, there will most likely be more demand for FHA loan products and some general statements that have been made in the past need to be clarified. In particular there is a general statement going around that FHA MIP is for the life of the loan. That is not a completely correct statement. I previously saw an article that indicated that MIP was not in fact for the life of the loan and it caught my attention. The article however, indicated that you can always refinance out of an FHA … (14 comments)
fha: Obama to Reduce Annual FHA Insurance Fee
- 01/07/15 01:24 AM
In a breaking NEWS ALERT on DSnews.com, it has been announced that President Obama will reduce the annual insurance premiums charged by FHA from 1.35% to 0.85%, which would apply to loans with an LTV of 95% or greater. There is no indication that loans with an LTV of less than 95% will pay a lesser premium, but that would seem to follow along with a reduction in the fee for loans with an LTV of 95% or greater. DSnews indicates that it has not yet been able to confirm this report, but this would be in line with pressure that … (3 comments)
fha: Waiting Periods Following Bankruptcy, Part II
- 12/30/14 02:51 AM
The waiting periods following bankruptcy to apply for a mortgage loan from either FHA, USDA/RD, or VA, are somewhat different than those for conventional loans sold to or insured by FNMA. Yesterday's blog post addressed the waiting periods imposed by FNMA. An outline of the waiting periods for FHA, USDA/RD and VA loan applications after bankruptcy will show that these programs are a bit more in line with one another than FNMA. As with all waiting periods, they may be extended by individual lenders or investors, but they cannot be shortened. FHA imposes a minimum two year waiting period following a Chapter 7 … (22 comments)
fha: Second Attack on FHA Mortgage Insurance Fees
- 12/25/14 01:17 AM
Another group of mortgage lenders has contacted HUD Secretary Julian Castro, urging him to lower the FHA mortgage insurance fees. In a letter dated December 18, 2014, Bill Cosgrove, Chairman of the Mortgage Bankers Association, indicated that, "MBA thinks mortgage insurance premiums are counterproductively high and recommends that they be reduced to better serve borrowers and meet FHA’s stated policy objectives". I recently posted a blog in which I outlined a letter sent by a group of Senators to Mr. Castro also urging him to lower FHA mortgage insurance fees. My previous post indicated that based upon the annual report released … (36 comments)
fha: FHA Annual Report Attracts Congressional Attention
- 12/22/14 01:13 AM
An article appearing on nationalmortgageprofessional.com indicates that seventeen prominent Senators led by Senator Barbara Boxer (D-CA) have sent a letter to HUD Secretary Julian Castro, urging him to price FHA loans appropriately to cover expected losses and to serve the agency's mission. The letter was prompted by the Annual Report recently released by FHA that indicates that the Mutual Mortgage Insurance Fund had a balance of $4.8 billion at the end of fiscal year 2014. That is an increase of $21 billion over the last two years. The Senate delegation heaped praise on FHA for the progress it has made. The … (4 comments)
fha: Blame It On The Servicers
- 12/20/14 09:45 AM
In a blog appearing in the Wall Street Journal for December 19, 2014, the author is blaming loan servicers for the tight credit market despite the relaxation of the QM rule and the requirement that lenders retain a 5% stake in mortgages they sell that have LTVs of greater than 80%. The blogger cites a research paper released by the Urban Institute that indicates that the high cost of servicing delinquent loans is keeping lenders from loosening their credit standards to accept less than prime borrowers. The blog indicates that last year the cost of servicing a delinquent loan was $2300 per … (3 comments)
fha: Cut Off At The Pass
- 12/15/14 12:33 AM
It is reported in MPA Magazine that the provision of the Transportation, HUD and Related Agencies Appropriations Act for Fiscal Year 2015 (S. 2438) which would have allowed the Department of Housing and Urban Development / Federal Housing Administration to impose an additional 4 basis point fee on lenders for loan originations has been eliminated. George Souto first reported that this fee was included in Senate Bill 2438 in post dated December 2, 2014. Several concerns that led to the elimination of the fee were that it was not included in the House version of the bill, the fee was apparently intended … (6 comments)
fha: HomeStyle Renovation Loan
- 12/12/14 01:13 AM
For a few months there has been some competition for FHA 203k Rehabilitation loans in the form of the HomeStyle® Renovation loan that is being offered by FNMA. A number of mortgage brokers and lenders are shying away from the FHA 203k loan of late because of the high cost of the mortgage insurance that FHA requires that cannot be dropped when the LTV gets down to 78% or less like a conventional loan. FHA charges an upfront MIP of 1.75% of the loan amount and 1.35% as an annual premium. The HomeStyle® Renovation loan ("HSR loan") is available for 1-4 unit … (4 comments)
fha: Down Payment Assistance
- 12/10/14 01:22 AM
A recent survey prepared for NeighborWorks America indicated that 70% of American adults are not aware of down payment assistance programs that are available, according to a recent press release. NeighborWorks America is a national nonprofit community development corporation based in Washington, D.C. The corporation has local organizations around the country and provided more than $100 million in down payment assistance last year. While there are programs available that do not require a down payment, like VA mortgage loans and USDA guaranteed or direct loans, there are programs that will provide grants that can be used by first-time home buyers in particular, … (4 comments)
fha: Tougher Standards for HECM Loans Coming
- 11/24/14 08:53 PM
Tighter underwriting standards will become effective on March 2, 2015 for Home Equity Conversion Mortgages ("HECM") insured by the Federal Housing Administration ("FHA"). FHA made this announcement last week according to an article by Ken Harney in the Hartford (CT) Courant and various other newspapers around the country. The HECM loan program is also known as a reverse mortgage and is available only to borrowers who are 62 years of age or older. According to Harney's article, the default rate on reverse mortgages insured by the FHA is about 10%, which is higher than most loan programs. Presently, according to the … (6 comments)
fha: FHA Loans Look Better All the Time
- 11/02/14 09:52 PM
I have been working with a couple who are looking for their first home. I have been telling them that an FHA loan is their best option. I think that statement is true for a lot of younger couples that have little in the way of cash and other assets to rely on in making their home purchase. In the particular circumstance at hand, the "big" asset for this couple is the husband's retirement account, a 401k account to be particular. The couple is looking to their 401k account for their down payment which could not be less than 3.5% under … (3 comments)
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Randy Kirsch
(NMLS# 1012303) Your Dedicated Mortgage Consultant
You are no doubt aware that the reduction in the FHA premiums for mortgage insurance went into effect yesterday, 01.26.2015. There are a number of people with FHA loans that might benefit from refinancing their existing FHA loan into another FHA loan with lower MIP. As stated in an earlier post entitled, "More Level Playing Field May Benefit FHA" the Wall Street Journal estimates that there are about 3,000,000 existing FHA borrowers who could benefit from refinancing into a new FHA loan.
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