HUD Is Proposing Another New Fee On FHA Mortgages
Just a few years ago, FHA loans began making a comeback as one of the most affordable options for many cash-strapped home buyers.
Today, not so much as tweeks to their pricing models have put FHA loans out of reach for many buyers, including first time buyers and buyers recovering from the recent housing market debacle.
Its time to tell your senators and congressman to stand up for affordable housing, buy making sure that reasonably priced loan products continue to be available for credit-worthy borrowers.
As if the current 1.75% FHA Upfront Fee and 1.35 Mortgage Insurance Premium (MIP) factor were not already pricing prospective Home Buyers out of purchasing homes, HUD Is Proposing Another New Fee On FHA Mortgages which will further make home ownership more difficult. While the new fee is only 4 more basis points, which is about $40 per every $100,000 borrowed, it can make enough of a difference in a Borrowers Debt-To-Income (DTI) Ratios to prevent them from qualifying for a mortgage.
Furthermore, FHA is back in the black again, and should be able to absorb this amount into their budget without further gouging both past and future Homeowners. I say both past and future Homeowners, because the new fee would be retroactive, and it does not have a date it would expire in the future.
HUD is trying to justify the new fee because it is targeted to improve HUD's badly outdated Technology which is now between 30-40 years old. No one disagrees the outdated HUD technology needs to be updated, but increasing fee to update their computer system instead of though their budget is the wrong way to go about it.
The new proposed fee is being challenged by lending groups who do not want to pass more fees onto their Borrowers. We all know what happens anytime a new fee or tax is implemented, it never goes away even after it has accomplished its intended purpose. HUD needs to do what any other business would do when it needs to make improvements to its equipment and technology. HUD needs to fine tune its budget to produce the necessary funds.
The new proposed fees are a part of Senate Bill 2438 which the Senate is expected to vote on within the next couple of weeks. Unless some noise is made about HUD Proposing Another New Fee On FHA Mortgages
it will most likely pass unnoticed until the first Borrower is denied an FHA Mortgage because their Debt-To-Income (DTI) Ratios are now to high. If you have access to your U.S. Senator, this would be a good time to give him/her a call and tell them Senate Bill 2438 is a BAD idea.
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George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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