As stated before about FHA mortgage costs going up in September, looks like HUD pushed back the increase in mortgage costs to October 4th. Still need to wait for the mortgagee letter to come out and make it official. Find out more at www.hud.gov.
Yes, the cost of an FHA mortgage is going up for any new case id numbers ordered past September 7th, 2010. The mortgagee letter has not come out yet but it was passed through congress (HR 5981) for this to take place. Here is the break down:
Old:
2.25% Upfront mortgage insurance premium
.55% Monthly payments
NEW:
1.00% Upfront mortgage insurance premiums
.85 to .90% monthly and HUD could raise to 1.55% max when needed.
Well, you might be thinking this is a good deal because the UFMIP went down a lot and monthly barely went up…….well think again. Here is a video showing how this is just increasing the costs a lot more for homebuyers.
Since Feb. 1st Condo’s and FHA have changed as people are starting to find out. More changes are happening for FHA with the costs for an FHA mortgage are going up after April 5th to find out about those details just check out FHA higher costs. With the previous post about the FHA condo changes I touched on this breifly but wanted to summerize it for you.
The good things with this change are that once you gather up all the information like you would have had to for a “spot approval” in the past, submit the info through a Direct Endorsed Lender, then they can work on getting the condo approved. Once the condo is approved for that one buyer going into the project……..THE WHOLE PROJECT IS APPROVED and everyone within the project should be thanking that one buyer and everyone involved who went through the process.
Couple of key things you need to watch out for that would be red flags up front:
Here comes more changes! We all have hopefully heard about the FHA Condo Changes that took place in February, but now the cost of an FHA mortgage is going up. It was only a matter of time this would happen because you have major market share of people now only able to go under the FHA product since that is the only product with the lowest down payment available right now, unless you fit into THESE categories. Looks like April 5th, 2010 is going to be the date FHA (HUD) will make some changes and here is a summary of them.
1. Increase in upfront MIP from 1.75% to 2.25%
2. Reduction in maximum seller contributions from 6% down to 3%
3. Congressional request to increase monthly mortgage insurance premiums. For a 30 year fixed FHA those are currently .55% a month.
4. Minimum credit score of 580 in order to have only a 3.5% down payment. If below 580 then a 10% down payment is required. (of coarse most all banks are currently at 580 to 620 so this will not be a concern unless the markets credit score requirements go lower)
Want to read it for HUD’s website then keep on reading below. Hope this helps 
The count down to the government tax credits only gives 60 days left until a sales contract needs to be completed by April 30th. Do you have a chance at part of this credit? Have you already bought a house and looking for this tax form from my previous blog? Well, lets take a look at some of the things you need to know that is happening right now in the real estate and mortgage market.
Here is a summary of the NEW RESPA Rule going into place January 1st, 2010.
On January 1, 2010, HUD will require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents will also be required to provide borrowers a new HUD-1 Settlement Statement that clearly compares consumers’ final and estimated costs. The new RESPA rule became effective on January 16, 2009, but provided a one-year transition period for the mortgage industry to incorporate these changes. HUD will continue to work with the mortgage industry during this period, including providing a comprehensive set of frequently asked questions (FAQs) on its website.
***Now below is the actual letter release from HUD***
| HUD No. 09-215 Brian Sullivan (202) 708-0685 |
FOR RELEASE Friday November 13, 2009 |
In addition, HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA’s new rules. In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule.
“We will work with those who are making an honest effort to work with us as we implement these important new consumer protections,” said HUD Secretary Shaun Donovan. “While we will not delay implementation of RESPA’s new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices.”
On January 1, 2010, HUD will require that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents will also be required to provide borrowers a new HUD-1 Settlement Statement that clearly compares consumers’ final and estimated costs. The new RESPA rule became effective on January 16, 2009, but provided a one-year transition period for the mortgage industry to incorporate these changes. HUD will continue to work with the mortgage industry during this period, including providing a comprehensive set of frequently asked questions (FAQs) on its website.
By improving the disclosures borrowers receive when applying for a mortgage, and by promoting comparison shopping, HUD believes its new RESPA regulation will save consumers an average of nearly $700 in mortgage costs.
Looks like a new mortgagee letter from FHA, mortgagee letter 2009-46b is out with the new condo approval process for FHA loans. Saying it simpler, if you are buying a condo these are the guidelines lenders will be looking at for all FHA loans. You still have guidelines from Fannie Mae and Freddie Mac, then beyond that it is up to each individual lender and their interpretation of the guidelines and how much risk they want to take on. I originally talked about these changes in my earlier post HUD Delays Condo Changes notifying everyone of the delay until December 7th, 2009 for these changes to take place. The major change is the elimination of FHA’s Spot Loan Approval process for condo projects. So this means that all projects will be required to be approved through FHA with two approval options:
*HUD Review and Approval Process (HRAP)
* Direct Endorsement Lender Review and Approval Process (DELRAP) — The preferred method for approval, as it is typically faster.
DELRAP is available only through lenders who have unconditional Direct Endorsement authority as well as staff who are experienced in reviewing and approving condo projects. So this means for any one looking for financing on condos it is very important now what lender you choose and knows what they are doing!
Here is a link to the actual Mortgagee Letter 2009-46b for your reading pleasure. Any questions please feel free to ask and as always……Hope this helps
We have “Green Mortgages” or what we call Energy Efficient Mortgages. This loan allows the customer to finance improvements that result in making the home energy efficient. Now what makes this so appealing is we are starting to see a lot of people making these improvements to houses and/or looking for financing to do these improvements. Several things though would be needed to qualify a person for a Green Mortgage. The Energy efficient improvements must be “cost effective, so this means that the total cost of the improvements (including maintenance costs) must be less than the total present value of the energy saved over the useful life of the improvements. The full costs of the eligible improvements are added to the base loan amount and the customer does not need to qualify for the additional financing or provide an additional downpayment. In addition, a second appraisal is not required to reflect the expense of the eligible improvements. In place of not needing a second appraisal, you will need a written determination base upon a physical inspection of the property by an energy consultant using a Home Energy Rating System (HERS) must be provided by the borrower. The HERS energy consultant and contractor selected to install the improvements must be an independent entity, not related directly or indirectly, to the seller or the customer. For a list of certified energy specialists please visit: www.natresnet.org
This can be done on purchases and refinances and you can go all the way up to only 3.5% downpayment on these mortgages or 96.5% for refinances. Feel free to contact me with more questions about this since there is some more items that go into this type of loan.
Looks like HUD will be delaying the changes from Mortgagee letter 2009-19 to December 7th, 2009. Most of the changes are still coming out November 2nd from that letter, but new policy for condo project approval and condo unit financing is being delayed until the December date. So if you are in the market for a condo and need FHA financing to do it…..now is the time before the changes take place. Remember, the major changes that effect Chicago, Illinois are: HUD is putting the condo approval process in the hands of the direct endorsement lenders, so it will be up to them. HUD is still going to require 50% occupancy rate and they are capping their concentration to no more then 30% financed through FHA.
I can help you nationwide and Podemos ayudar en espanol! With my network of trusted individuals within the housing industry, allow me to be a person who is a one stop person for any of your home buying needs. If you are needing a mortgage on your purchase, or the refinancing of your mortgage start by sending me an email or give me a call now.
HUD and Condos, don’t forget about the change happening November 2nd! This should help a condo market like Chicago Illinois. Yes there are some downsides like consentration of FHA loans within a project, but conventional lenders have always had this in place and never hurt the market before. HUD is putting the condo approval process in the hands of the direct endorsement lenders, so it will be up to them. HUD is still going to require 50% occupancy rate and they are capping their concentration to no more then 30% financed through FHA. Most major lenders never went over 33% at the most in any project, so again, this has always been there and HUD is just coming into the times. There are several more changes that are taking place and encourage people to read the Mortgagee letter that I have linked to and is mortgagee letter 2009-19.
http://tinyurl.com/mortgagejaw10
I can help you nationwide and Podemos ayudar en espanol! With my network of trusted individuals within the housing industry, allow me to be a person who is a one stop person for any of your home buying needs. If you are needing a mortgage on your purchase, or the refinancing of your mortgage start by sending me an email or give me a call now.
MortgageJaw.com is powered by WordPress and was developed by BlueberryLn.com
