The HVCC Virus Spreads to FHA

The HVCC Virus Spreads to FHA

Our good friends at IMMAAG reported today that FHA has enacted a similar appraisal management process to the much maligned & ill-conceived HVCC regulation that has added layers of complexity and cost to conventional (FNMA, FHLMC) mortgage financing. Excerpts from IMMAAG’s most recent alert: It is no secret that IMMAAG has opposed HVCC since the first time we had a chance to read the agreement and the code. We continue to share the belief with thousands of others who now know – HVCC was a poorly conceived, misdirected, inappropriate response to circumstances that were not the result of the causes identified by the New York Attorney General. For months, IMMAAG has joined others in the industry in advocating grass roots action to tell Congress about the real problems caused by this policy. We have been suggesting to everyone with whom we communicate to ask their congressional representatives to co-sponsor H.R. 3044, the moratorium bill. During all of this, there have […]

A Few Reasons Why Now May Be The Least Expensive And Easiest Time To “Go FHA”

Shopping for low mortgage rates is a game of luck.  Some days, mortgage rates are favorable.  Other days, they’re not.  And while you can sometimes make an educated guess about where rates might be headed, you’re not always going to guess right. Even the experts get it wrong more often than they’d like. But some parts of the rate shopping process can be predicted and one of them is the future of mortgage guidelines.  In general, the more often homeowners default on their respective mortgages, the harder it is for future mortgage applicants to be approved. This is why “now” may be the best time to apply for a FHA mortgage.  Defaults are climbing, suggesting that FHA underwriting guidelines are about to tighten. Indeed, the FHA has implemented two major changes since last summer: The minimum downpayment requirement was raised by a half-percent to 3.5% Cash out refinances are now limited to 85 percent, down from 95 percent. These changes […]

About Time! HUD Introduces Risk-Based Premiums for FHA Loans

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 […]