Mortgage originations among borrowers in the 620 to 680 credit score range have plunged some 90 percent since the housing crisis in 2007 and still have far to go before they recover. One thing that’s holding back these borrowers is a series of increases in FHA’s mortgage insurance premiums. They’ve been raised five times since 2010 and today they cost borrowers about 85 basis points more in fees than before.
The Federal Housing Administration announced that it will allow lenders to start accepting electronic signatures on mortgage loan documents. The FHA will accept the e-signatures on third-party documents, such as sales contracts and other documents not controlled by the lender. This also includes REO sales contracts.
The new policy is effective immediately.
“By extending our acceptance of electronic signatures on the majority of single-family documents, we are bringing our requirements into alignment with common industry practices,” says FHA Commissioner Carol Galante. “This extension will not only make it easier for lenders to work with the FHA, it also allows for greater efficiency in the homebuying and loss mitigation process.” Read More.
Looking to sell your family-friendly, two-bedroom condominium within walking distance of the local grocery store? Don’t expect your real estate agent to advertise it as such.
The push to eradicate words and phrases from commercial vernacular that might be considered remotely insensitive has appeared once more with the folly of political correctness now spreading to real estate advertising. Read More.
On Wednesday December 11, 2013, the Federal Housing Administration (FHA) released its final Ability to Repay/Qualified Mortgage (QM) Rule. NAR largely supported FHA’s efforts to track the Consumer Financial Protection Bureau’s version of the rule while making some adjustments to the determination of whether a mortgage exceeds the Annual Percentage Rate (APR) and Average Prime Offer Rate (APOR) cap of 1.5%. NAR also recommended that FHA fix the discrimination against affiliate businesses in the calculation of the 3% cap on fees and points but FHA declined to change the rule. NAR has asked that FHA be flexible and make adjustments to its rule should there be unintended consequences like reduced access to credit in an already tight credit environment. The rule will take effect in January 2014. Read More
The Federal Housing Administration will be reducing the amount it’ll insure on high-cost mortgages starting in the new year.
Beginning on Jan. 1, all FHA loans will be capped in high-cost areas at $625,500, reduced from the current cap of $729,750. FHA will keep its current loan limits in place in areas where housing costs are lower than $271,050. The new loan limit for the highest cost areas will affect about 650 counties, according to the Department of Housing and Urban Development. Read More.
Over the next week Congress will be working on a number of legislative issues in Washington, D.C. Congress is expected to adjourn for its traditional “August Recess” on Friday, August 2, 2013. The “August Recess” represents an important opportunity for REALTORS® to directly engage with Members of Congress on our home field. The issues facing REALTORS® affect the fundamental elements of real estate: financing, taxes and property protection. FHA/Fannie and Freddie reform is tops on the list. Read More.
Thinking about refinancing your existing mortgage, or taking out a new one? Don’t delay, or it could cost you. Some Federal Housing Administration (FHA) changes involving tighter lending standards and higher mortgage insurance premiums already took effect on April 1st, while others are on the way – and these changes could make a dent in your wallet.
So what’s prompting these changes? They come in the wake of the FHA’s Mutual Mortgage Insurance Fund – which is used to fund homeowner programs – announcing a deficit of over $16.3 billion for fiscal year 2013. Read More.
The Federal Housing Administration starting charging borrowers higher mortgage insurance premiums on new FHA loans at the beginning of April.
The annual fee on most FHA loans increased by 0.1 percent April 1. While it may sound small, this is one of a series of mortgage insurance hikes the FHA has implemented over the years. The fee has nearly tripled since 2008. Mortgage insurance changes will be starting in June as well. Read More.
The Federal Housing Administration has decided to rescind a rule that would have made it tougher for borrowers with credit disputes on their records to qualify for an FHA-backed mortgage. The rule had been widely criticized by the lending and real estate industry as shutting out too many potential borrowers from qualifying for a mortgage.
The new rule originally took effect April 1 but then was postponed a week later until July 1 as the FHA further reviewed the policy change.
The guideline would have required borrowers who wanted to qualify for an FHA-insured mortgage to pay off any credit dispute in their history of more than $1,000 or set up a documented payment plan on any unpaid collection accounts. Read More.
There’s been considerable interest in the media in FHA’s financial position. The agency recently announced several increases to the premiums it charges borrowers to have their mortgage guaranteed by the agency. Those increases, along with some reports that FHA might request federal funds to shore up its reserves, make it seem like the agency is navigating a rocky period.
On the premium increases, the 0.10 percent hike that takes effect April 1 is mandated by law as part of the bill Congress passed at the end of 2011 to extend the payroll tax vacation. That bill required an increase in the guarantee fee that Fannie Mae and Freddie Mac charge banks for guaranteeing loans. Congress included the FHA increase in the bill, too, at least in part to create parity with Fannie and Freddie, NAR analysts say. Read More.