A new risk-based premium program for FHA loans went into effect July 14, 2008. Until two days ago, FHA loans, which are government backed programs, charged all borrowers the same regardless of credit score or loan to value. The one size fits all plan is gone. Here are the changes that consumers need to know. These apply to both purchase and refinance loans. They do not apply to the FHA’s Reverse Mortgage program (HECM) or Title 1 loans. If the Loan to Value is 95% or less, the annual premium is 50bps or .5% x the loan amount. If the LTV is higher than 95%, the annual premium is 55bps. The upfront premium, a financeable non-refundable fee, is now determined by a combination of the credit score and the loan to value. Since consumers with less money to put down and/or with less than perfect credit are bigger risks to default, they will be required to finance additional fees into […]
Mortgage bonds are starting the week in rally mode. Treasury Secretary Paulson affirmed to wall street that the government will not allow Fannie Mae and Freddie Mac to fail. Busy economic calendar this week. The Producer, and Consumer Price will be published Tuesday & Wednesday respectively. Any signal of inflation will move rates up. Also on Wednesday, the Fed meeting notes will be released. This can often move rates as the market gets further insight on the Fed’s thinking. Later in the week, the health of the manufacturing sector via the Philly Fed Report is announced. A weak number will be provide further support for mortgage bonds and likely move rates lower.
While the presence of one or more of these red flags doesn’t automatically mean that there might be mortgage fraud, further investigation is warranted. Several in the list are ‘common-sense’ warning signs. However, the slack lending standards that many banks and mortgage lenders employed the past several years, require the rest of us to promote and reiterate the red flags so that our industry can regain the public’s trust. Inconsistent ownership among supporting loan paperwork Payoffs from seller’s funds on HUD-1 being made to non-lienholders Not enough funds to close documented More than five mortgage inquiries listed on the credit report in the last 90 days Unusually high income for job description Bank statement deposits don’t match payroll dates Seller is a corporation Inconsistent information on the mortgage application (1003, sales contract, HUD-1) Change in ownership in the last 12 months Crossed out information on the loan documentation Inability to independently verify place of employment Borrower is a renter and is […]
The J. Berman Group is excited to announce a new feature in the right sidebar. Mortgage, Real Estate, & Technology News straight from our reader to yours. If you enjoy what you are reading and use twitter, follow us at ‘jbermangroup’ or you can subscribe to this site with the RSS button located in your address bar.
Mortgage Consulting aside, I’ve been working on some other projects and I’m excited to announce that one of them launched today. There is a link in the blogroll to Episode #1 and you can also click below to listen. If you want to keep up with the podcast as it develops, subscribe (w/iTunes) from Podango and whenever we roll out a new episode it will automatically download into your iTunes media player. RemoteBreak is a bi-weekly podcast offering the latest news, tips, & reviews about technology for real estate and mortgage professionals. Join hosts Jason Berman, Todd Carpenter, & Ben Rubenstein as they help you discover how technology can assist your business in ways you hadn’t imagined. Episode #1 highlights, we discuss Twitter, MacHeist application AppZapper, & go in depth about the hot networking site LinkedIn. We also interview Andrew Berman (no relation) of The Mortgage Press about his new endeavor FindMortgageJobs.com. Andrew reveals his profound love for Microsoft Outlook […]