Tag: Federal Housing Administration

Financing-home loans, Real Estate, The Market

Lock Your Mortgage Rate: New Loan Fees Expected Within Days

Posted on by Kristen K. Foley, REALTOR®

Article sent from a lender partner: Will and Nancy Jacobs with First Heritage Mortgage in Virginia

Starting soon, nearly all home buyers and refinancing households nationwide will pay higher mortgage loan fees. Congress has made it law.

13 months ago, as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Congress enacted a one-year cut to FICA payroll taxes.

FICA stands for Federal Insurance Contributions Act. Taxes collected under FICA fund such programs as Social Security and Medicare.

The stimulus plan temporarily lowered tax rates for salaried workers from 6.2% to 4.2%; and for self-employed persons from 12.4% to 10.4%. Effective January 1, 2012, “regular” tax rates were to return.

That is, until late-December 2011. In one of its last moves of the year, Congress passed a temporary, two-month extension to the payroll tax cut, extending it through February 29, 2012. The expected cost to the U.S. Treasury is $33 billion.

To recoup those costs, Congress has turned to Fannie Mae, Freddie Mac and the FHA.

Each entity has been ordered to collect news fees on each new mortgage is backs, and has been told to forward said fees to U.S. Treasury directly. There’s no “workaround” allowed or forgiveness applied — each new loan is subject to the payment.

The rules are listed on page 17 of the law’s final draft, in a section unambiguously titled “Title IV — Mortgage Fees and Premiums”.

According to the law :

*  Fannie Mae and Freddie Mac must collect an average fee of no less than 10 basis points (0.1%) per new loan

The FHA must raise its monthly mortgage insurance premiums 10 basis points for all new loans

The expected cost to consumers is no less than $10 monthly per $100,000 borrowed. Some analysts, however, expect Fannie Mae and Freddie Mac to collect more than is minimally required. This could add an additional $30-50 to your monthly mortgage payment per $100,000 borrowed.

Therefore, if you’ve been shopping for a home or for mortgage rates , take advantage. Within days, lenders are expected to start collecting Payroll Tax Extension fees from mortgage applicants — a move that will cost you money.

Lock today to avoid the big fees. Save yourself money.

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Financing-home loans, Investing, Real Estate, The Market

Looks like the FHA loan limits will go back to $729,750

Posted on by Kristen K. Foley, REALTOR®
Logo of the Federal Housing Administration.
Image via Wikipedia

Looks like the FHA loan limits will go back to $729,750, not Fannie Mae or Freddie Mac limits though at this point.  It isn’t a done deal yet…the president still needs to sign it into law but this is a good sign!  See article below.

NOVEMBER 18, 2011
Congress Increases the Ceiling on Size of Mortgages
By ALAN ZIBEL
WASHINGTON—U.S. lawmakers moved Thursday to increase the maximum size of loans that can be guaranteed by the Federal Housing Administration.
Congress passed a broad spending bill that included a provision to restore to $729,750 the maximum size of mortgage that can be backed by the FHA, giving some borrowers the option of putting less money down to obtain a mortgage in expensive cities.  FHA-backed loans currently account for a third of new mortgages for home purchases and can be made with down payments of as little as 3.5%, compared with the 20% industry standard.  The bill goes next to President Barack Obama to be signed into law.
The loan limits fell to $625,500 on Oct. 1 in expensive markets like New York, San Francisco and Washington. They declined in around 250 counties for loans guaranteed by mortgage-finance companies Fannie Mae and Freddie Mac, and in around 600 counties for FHA-backed loans. In some cases, the FHA loan limits fell below those of Fannie Mae and Freddie Mac.
The housing lobby pushed for Congress to reinstate loan limits for Fannie, Freddie and FHA, citing concerns that any steps to raise borrowing costs might be too much for fragile housing markets to bear. Limits for Fannie and Freddie loans were not restored.  Sen. Robert Menendez (D., N.J.) said that restoring the loan limits will benefit the housing market at a time when it is weak. Doing so, he said, “won’t cost taxpayers a dime” and will benefit the housing market in many other parts of the country besides those cities.
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Tim McLaughlin
Senior Vice President, Secondary Marketing

Weichert Financial Services
225 Littleton Road, Morris Plains, NJ 07950

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Financing-home loans

GSE and FHA Loan Limit Changes for 2011: Scope of Impact

Posted on by Kristen K. Foley, REALTOR®
Special Studies, June 1, 2011 
By Robert Dietz, Ph.D., and Natalia Siniavskaia, Ph.D.
Economics and Housing Policy Group
National Association of Home Builders

October 1, 2011, some mortgage loan limits for the government-sponsored enterprises Fannie Mae and Freddie Mac (GSEs) and the Federal Housing Administration (FHA) will drop from their current temporary levels to reduced limits based on permanent criteria established by Congress in 2008.[1]

Read the rest of the article here: http://www.nahb.org/generic.aspx?genericContentID=159279

 

 

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Financing-home loans, Real Estate, The Market

FHA – Seasoning requirements

Posted on by Kristen K. Foley, REALTOR®

HUD has published the final version of its predatory lending rule established to combat “flipping.” Flipping is the term used to describe the resale of a recently acquired property for an artificially inflated value. Under the new rule, recently flipped properties are not eligible for FHA mortgage insurance.

Some of the other features of the rule include:

  • Only the owner of record may sell a home to an individual who will get an FHA mortgage. It cannot involve the sale or assignment of a sales contract.
  • Resales occurring 90 days or fewer after the purchase of the property are not eligible for FHA insurance.
  • Resales occurring between 91 and 180 days after purchase will be eligible only if the lender obtains an additional independent appraisal based on a resale profit percentage threshold established by the FHA. Lenders may prove that the increased value of the property is due to rehabilitation.

In areas where flipping is a problem, HUD may require that lenders provide additional documentation to sup-port the value of the property. This would supersede the 91–180 day rule shown above.

Make sure you are working with an agent who is aware of these rules if you are seeking an FHA loan..you could end up in default if you find out too late in a transaction to purchase a home that meets this criteria.  Also verify any additional risk layering that your specific lender may use to protect themselves that adds additional requirements to the above noted.

Hope this helps!

 

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Financing-home loans, Real Estate

FHA Mortgage Insurance Premiums to Increase

Posted on by Kristen K. Foley, REALTOR®
Logo of the Federal Housing Administration.
Image via Wikipedia

HUD has released Mortgagee Letter 2011-10 announcing an increase in the current Annual Mortgage Insurance Premiums (MIP or known to many as PMI) by 25 Basis Points (BPS)–which is a percentage measure equal to 0.01%– for all FHA Loans (a federally insured loan allowing people to put as low as 3.5% down to purchase a home).  Upfront MIP will not be changed.

Upfront MIP:

The upfront premium will remain at 100 BPS and will be charged for all amortization terms.  

Annual Premiums:

For FHA purchases and refinances, the annual premium has been increased.  The Annual MIP shown in basis points below is to be remitted on a monthly basis and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:

LTV >15 Year Loan-Annual MIP LTV <=15 Year Loan – Annual MIP
<= 95% 110 BPS (currently 85 BPS)   <= 90% 25 BPS (currently zero)
> 95% 115 BPS (currently 90 BPS)   > 90% 50 BPS (currently 25 BPS

Effective Date: This increase in Annual Mortgage Insurance Premiums will be effective for all FHA case numbers assigned on or after April 18, 2011. 

I am not a lender, so please check with your lender for particulars on any loan programs.

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