Archive

Archive for the ‘Mortgage News’ Category

FHA Wants More Mortgage Relief

February 9th, 2009
No comments

The government anticipates only 20,000 troubled borrowers will apply to refinance into more affordable home loans by next fall under a new mortgage relief program passed by lawmakers over the summer. The $300 billion ‘Hope for Homeowners’ program was launched October 1st 2008.

 

FHA rolled out the new loan program, Hope for Homeowners loan that was designed by lawmakers eager to respond to the mortgage crisis, the Congressional Budget Office had projected it would let 400,000 troubled homeowners swap risky home mortgages for conventional 30-year fixed rate loans with lower rates. 

 

But according to the Federal Housing Administration, the early results are discouraging: the government received only 42 applications in the program’s first two weeks. The low turnout was first reported by the industry newsletter Housing Wire. Since the FHA loan applications take about 60 days to process, no home loans have been approved yet.  The FHA Loan Blog believes that the mortgage lenders are holding up the program with their guideline tweaks, like higher credit scores.

Share

FHA Loan Product Promo, FHA Loan Updates, FHA News, Mortgage News , , , , ,

FHA Agrees to Essential Loan Program

February 9th, 2009
No comments

Nancy West, a marketing and outreach specialist at HUD’s Santa Ana, Calif.-based office, said there are companies making solicitations with the claim that non-approved originators can do FHA mortgage loans and get paid for them. “I’m here to tell you [that] you cannot,” she said, adding it creates unfair competition with originators who do things properly.

Among the features of the FHA mortgage program is that no credit score is required and that manual underwriting is permissible. However, Ms. West said, there are FHA mortgage lenders who are imposing stricter guidelines. FHA cannot control that, she said. There are those that do not have stricter requirements. If a correspondent only works with a mortgage lender who only uses automated underwriting, they need to be aware there are FHA loans that the system will never approve. Ms. West suggested having an alternative sponsor who manually underwrites.

While the qualifying ratios for FHA loan programs are normally 31% and 43%, Ms. West said there have been loans approved with a backend ratio as high as 68%. It is important that the originator know what program is best for the customer, not only among the FHA offering but the programs at other federal agencies as well, she said. Among the bogus information being given out by lenders is that the borrower must take the property out o a living trust. That is not true, Ms. West said, noting that taking the property out of trust could trigger legal issues.

FHA loans can also be used on manufactured housing as long as it meets agency requirements. “We are the game in town for manufactured housing,” she said. HUD needs mortgage brokers’ help to get the word out about changes in the program to Realtors, who are not aware of items no longer required to be fixed, such as missing handrails, cracked window glass, minor plumbing leaks, poor workmanship and defective floor coverings.

The temporary loan limit increase expired on Dec. 31. Ms. West suggested that mortgage brokers and loan officers keep on top of sponsors to ensure their loans are approved by the deadline. As for the Hope For Homeowners program, while Ms. West said the parameters make certain that only a small number of borrowers are eligible for, there are some benefits. “It is a tool and we will be able to help some folks with it, but it is not a cure all.” The borrower gets to keep a home he or she can no longer keep. They are not paying to make FHA money, only what they owe. Most of the originators of these loans are servicers. The originator is allowed to charge one point only; no administrative or add-on fees allowed. “I’m not saying don’t do it, but don’t make it your meal ticket,” said Ms. West.  Article Written By Brad Finkelstein.

Share

FHA Loan Product Promo, FHA Loan Updates, FHA News, Mortgage News , , ,

FHA Mortgage Loans for 2009

January 6th, 2009
4 comments

Yes credit is tight and potential home buyers might think they need a significant of cash or a superlative credit score to wade into the devastated housing market. FHA eliminates some of the lender risks to provide mortgages because it will pay a claim to the lender in the event that a homeowner defaults on their loan. 

Until 2008, FHA loan programs were capped so low that the program was out of step with the real price of a house. But in February 2008, the FHA loan limits in the high cost housing markets rose from $362,750 to $729,750.  But in 2009 the FHA mortgage limits are being down-sized again.  FHA announced the new ceiling in the high cost markets will be $625,500. FHA loans in 2009 will cap out at 115% of the median home price in a county or metropolitan area. Still, huge swaths of the housing market will remain, as never before, eligible for an FHA home mortgage.

Watch This FHA Home Loan Video > httpv://www.youtube.com/watch?v=w6Q2IihDrGM

 

o    FHA home loans can only be originated from a FHA-approved mortgage lender.

o    Down payment requirements are minimal. Buyers need only 3.5% of the house’s price tag.

o    The down-payment can be a gift from a family member, employer, local charity, or local government program.

o    FHA loan programs enable all ranges of credit scores with compensating factors.

o    You must have a 2-year employment record. The new FHA loan payment must be less than 31% of your income, and debt to income ratio is usually less than 43% of your income.  Read the complete article at >

Share

FHA Loan Updates, FHA News, Mortgage News , , , ,

FHA Loan Getting Tighter Lending Guidelines

December 12th, 2008
No comments

To get a mortgage now, you’ll have to make a down payment and document that you have the income and reserves to make your mortgage payment, run your household and still handle unexpected expenses.  Subprime mortgage loans that were offered to borrowers with questionable qualifications during the housing boom have dried up because lenders — and the investment firms that bought the mortgages — can no longer count on appreciating home prices to bail out bad loans. Now FHA mortgage lenders and brokers must play by the rules of Freddie Mac and Fannie Mae, which guaranteemortgages that meet their criteria so that home financing investors will want to buy them in the secondary market.

Mortgage Lending Guidelines Tighten!  httpv://www.youtube.com/watch?v=e13a2GRKSPc

FHA mortgage loans are backed by the Federal Housing Administration have also regained favor as an option, not just for credit-challenged borrowers for good credit borrowers looking for low down payments.  The FHA loan programs gave Kyle and Tracy Spear of Swampscott, Massachusetts, north of Boston, an opportunity to buy a larger home with less of a down-payment. Last summer, the couple had planned to subdivide their property in Boston and sell the home plus a separate lot. But the city and their neighborhood nixed the subdivision, and they ended up netting just $15,000 on the sale. For two months, Kyle, 38, Tracy, 37, and their three boys — Kyle, 4; Tyler, 2; and Jack, 11 months — lived with friends and family to save money until they found their next home, a 2,800-square-foot house with four bedrooms that cost $540,000. They qualified for a thirty-year jumbo mortgage loans with a fixed rate of 6.875% backed by the FHA. And because the FHA required a down payment of only 3%, they had to put down just $16,000.

Prove it. The days of “Take my word for it” are over, and stated-income loans, are very difficult to find. Lenders will ask you for at least two months of financial account statements, two years of tax returns and even verification from employers that overtime, commission or bonus income will continue.

FHA mortgage lenders are also scrutinizing more carefully the ratio of your debt to income. Beginning February 1, 2009, Freddie Mac is imposing a limit of 45% of all pretax income for all debt; borrowers with a credit score of 740 or better will get the best rates. The FHA refinance guidelines are even tighter: Mortgage debt may not exceed 31% of your income, and total debt can’t top 43%. The FHA doesn’t impose a credit-score threshold.

Home loans with no down payment, or those that combine first and second mortgages, such as the 80-20, are also gone. Home mortgages backed by Fannie and Freddie require a minimum down payment of 3% to 5%. The bigger your down payment and the better your credit score, the better your interest rate. If you put less than 20% down, you’ll pay private mortgage insurance, or PMI.  But here is something to consider; If home prices have been falling in your area, you may not be able to get PMI, and if you can, you’ll have to ante up 10% to 15% for a down payment.

Congress has authorized the FHA, which relies on its own program of mortgage insurance, to take up the slack in declining markets, says Meg Burns, director of the FHA’s Office of Single-Family Program Development. The FHA can insure loans up to the same amount as Fannie and Freddie. Beginning January 1, the limit is 115% of a metro area’s median home price, up to $625,500, and the minimum down payment is 3.5%, up from 3% in 2008. FHA mortgage loans have become reasonabbly affordable.

According to HSH Associates, at the beginning of November the national average rate on a 30-year fixed-rate loan was 6.4%. FHA home loans had a 6.7% mortgage rate; the expanded jumbo interest rate was 6.8%, and the traditional jumbo mortgage rate was 7.9%. Adjustable interest rate FHA home loans didn’t offer much of an advantage: The interest rate on a 5/1 ARM was 6.4%, and on a one-year ARM it was 5.8%.  Read the complete article >.  

Share

FHA Loan Updates, FHA News, Mortgage News, Published Loan Articles , , , , ,

FHA Mortgage Rates Could Drop to 4.5%

December 12th, 2008
No comments

Clearly the Federal Reserve believes that lower interest rates can help revive the sluggish housing markets.  FHA home loan rates have dropped again to ridiculously low levels and home refinancing has become attractive again.  With the Fed slashing interest rates and the US government claiming to jump-start the housing with buy-downs that could lower 30-year fixed rate FHA mortgage loans to 4.5%.   Visit FHA Loan Blog for the latest take on mortgage news.

Mortgage Rates Drop to Lowest Level Ever Recorded by Freddie Mac!  Watch this FHA Video > httpv://www.youtube.com/watch?v=vB8biNaMSq8

While mortgage delinquency is expected to nearly double by next year, the bottom of the delinquency cycle may occur by mid-2010.  Borrowers who were delinquent at least 60 days on their mortgages accounted for 3.96 % of all mortgages during the third quarter, Trans Union reported today.  Home loan delinquency rose from 3.53 % in the second quarter and has soared from around 2.57 % a year earlier. 

For subprime mortgages, fixed rate foreclosure starts raised 16 basis points to 2.23% and subprime ARM foreclosure starts dropping 16 basis points to 6.47%. FHA loan foreclosure starts were unchanged at 0.95% and VA foreclosure starts increased two basis points to 0.59%, all on a non-seasonally adjusted basis.” 

Share

FHA News, Mortgage News , , , , ,

Is the Financial Rescue Too Much Weight for FHA Loans?

December 11th, 2008
1 comment

FHA loan programs continue to support the brunt of the mortgage product that focus on refinancing homeowners facing foreclosure.  The FHA Secure looked great on paper in 2007 when HUD rolled it out, but very few lenders offered the product to the borrowers who needed.  HUD just rolled out the Hope for Homeowners product and hopefully these FHA loans will provide the mortgage relief to the millions of homeowners who need to refinance or get a loan modification that provides an affordable monthly payment.

In a recent Reuters article, a congressionally appointed panel that oversees the Treasury Department’s $700 billion financial rescue fund is expected to release a report on Wednesday highly critical of how it has been handled, The Wall Street Journal reported on Tuesday.  The Journal, citing people familiar with the matter, also said the panel would push the Bush administration to act more aggressively to prevent foreclosures.  The newspaper said the oversight report due on Wednesday is not expected to contain new findings. It said a draft of the report posed 10 questions, pressing officials for a clearer strategy and asking whether there is sufficient accountability and why more has not been done to prevent foreclosures.  Elizabeth Warren, the Harvard University law professor who heads the congressional oversight panel, is scheduled to testify before the U.S. House of Representatives Financial Services Committee on Wednesday and is expected to discuss the report.

Rep. Jeb Hensarling, a Texas Republican who opposed the financial rescue bill and also serves on the oversight panel, said in a statement he could not sign the report. “In my role on the TARP (Troubled Asset Relief Program) panel, my top three goals are to ensure that the program works, to ensure that decisions made are based on merit and not political considerations, and most importantly, to ensure that taxpayers are protected,” Hensarling said.  “I am hopeful that the oversight panel will eventually be an effective vehicle for these goals to be met but thus far the jury is still out on that,” Hensarling said.  Caleb Weaver, a spokesman for the oversight panel declined to comment on the Wall Street Journal’s report.

Share

FHA Loan Updates, FHA News, Mortgage News , , , ,

FHA Loan Overview

December 10th, 2008
No comments

Mortgage refinance loan activity has peaked at an all time high over the last six years due to rising home values and low interest rates.  The FHA Refinance program is designed to provide an FHA alternative to the commercial products currently being offered to homeowners with substantial equity in their homes.  The purpose of these FHA home loans is to take out a new mortgage that provides cash left over after the old home loan has been paid off.

The FHA loan requirements demand that the applicant for a cash-out refinance loan has occupied the premises for at least twelve months and that payments on the existing home loan have been on time for at least one year. Cash-out refinancing cannot be more than the FHA loan limit for the area of the house being refinanced.  The other limit to the amount of a refinance loan may come from the mortgage lender.  Many of them limit total indebtedness on a property to 80% of its present appraised value.  That means your new mortgage, plus any other mortgage liens you have against the property, cannot total more than 80% of the home’s worth.

If there is a second mortgage on the home, it must be subordinated to the new FHA mortgage loan.  The homeowner will have to meet the mortgage lender’s requirements for ability to pay on both mortgages; generally that means the loan applicant must meet the lender’s cap on mortgage payments in relation to total monthly debt.  All borrowers must meet certain credit requirements on these loans, and any co-signer on the cash out refinance loan must also be owner occupied on the property.  These FHA mortgage loans are limited to homes with a maximum of two living units. 

The credit requirements are generally those set forth by the FHA mortgage lender.  Because most traditional home loan lenders have tightened up their requirements recently, it is going to be important to shop for a loan with both a decent interest rate and reasonable credit requirements.  A few lenders still allow bad credit mortgage loans with the FHA lending guidelines, but usually they have a significant amount of equity and positive compensating factors.

Share

FHA Loan Updates, FHA News, Mortgage News , , , ,