How Trump Has Messed With FHA Loans So Far

By
Real Estate Agent with RE/MAX Gold DRE #00697006

Lots of lenders in Sacramento are scrambling right now to piece back together FHA loans after Trump removed the new law giving borrowers a break on the mortgage insurance premium put into place by Obama. The lame excuse used was to protect the insurance fund but unless Trump is planning to crash the real estate market, the fund does not appear to be in any danger. Why harm first-time home buyers and mess up existing transactions that were set to close based on the reduced premiums?

If agents are in escrow right now with an FHA buyer, this move likely affects you and your borrowers. Which in turn affects the listing agents and her sellers. You know what could make it even worse? If the escrow happens to be a short sale that won't meet its deadline now due to Trump. That could mean starting over on the short sale or, worse, the home could simply slip into foreclosure.

You can read more in my Sacramento personal blog today at this link: What You Should Know About Trump and FHA Loans.

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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Rainmaker
3,307,632
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Good morning, Elizabeth -- as they say "time will tell" and as far as know time isn't being particularly kind with this particular situation.  As least not in the early days but let's see.  

Jan 26, 2017 10:19 AM #1
Ambassador
2,675,783
Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Elizabeth, I'd understand the uproar if the cuts had actually been implemented, but the cuts were announced and not yet in full play.  It wasn't important enough for the prior administration to implement before they stepped out the door, so why blame the current for wanting to reassess since they'll be the ones holding the bag if things didn't work out?

Jan 26, 2017 01:58 PM #2
Rainmaker
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Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Michael Jacobs You mean apart from removing scientific facts from government websites, silencing those who disagree and making "alternate facts" sound even more absurd than it already is? Yes, we will see.

I suppose we could start burning down libraries next.

Jan 26, 2017 02:05 PM #3
Rainmaker
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Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
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Liz and Bill Spear I was already one step ahead of you there, because that was my initial thought: who is it harming if it wasn't yet enacted? So I dug into it, and the answer to that question is what prompted my personal blog.

I mean, apart from the fact there is no break for first-time home buyers coming from the Trump administration yet. But there is lots of time to close many other doors of opportunities for the average Joes.

Jan 26, 2017 02:09 PM #4
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Not a very good beginning to this administration from what I've seen so far.  Lots of "alternate facts".

Jan 27, 2017 06:50 AM #5
Rainmaker
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Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
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Gabe Sanders It's creepy and it make me cringe that those two unalike words have morphed into an oxymoron that people use as though it's a real thing.

Jan 27, 2017 08:58 AM #6
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

I'm not sure I disagree with the decision to overturn that.  It sucks for consumers who would use it, or those in process, but these loans offer so much that others don't, that they are riskier.  More risk means you pay for it as a consumer.  In this case, it's mortgage insurance.  In my mind, the insurance cost is worth the loan.  When the market crashed a decade ago, FHA mortgagees were able to refi without an appraisal.  When you are upside down and hit a hardship and can't refi to a lower rate because your house won't appraise, was a scenario that brought us Short Sales.  Some folks who contacted me about Short Sale who had FHA or VA loans were able to streamline refi and avoid that and stay in their homes.  That streamline refi alone is worth the cost of the insurance.  

 

Jan 28, 2017 10:32 AM #7
Rainmaker
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Elizabeth Weintraub Sacramento Realtor Top 1%
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Chris Ann Cleland The thing is the insurance fund has adequate reserves so there is no reason not to cut the insurance premium for borrowers. The argument has to do with the cut in the MMI put into place by Obama and now overturned by Trump. Now it will cost borrowers more money, not less, to use FHA, and, as the National Association of Realtors points out, it could affect 750,000 to 850,000 borrowers.

Trump's campaign was based on helping the little guys, but like his Alt-Right Anti-Semitic and white-nationalist sidekick Bannon has called that supporter base -- now that they are no longer campaigning -- what was it? Oh yes, the "hobbits" and "deplorables" will have a tougher time with FHA loans thanks to Trump.

Jan 29, 2017 05:25 PM #8
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