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HUD announces nationwide “first-look program”

Douglas Zeller — Fri, 10 Sep 2010 17:10:06 +0000

The U.S. Dept. of Housing and Urban Development recently announced a new agreement with the nation’s top mortgage lenders to offer select state and local governments, including California, and nonprofit organizations a “first look” or right of first refusal to purchase foreclosed homes before making the properties available to private investors.

The National First Look Program is the first-ever public-private partnership agreement between HUD and the National Community Stabilization Trust and is intended to give communities participating in HUD’s Neighborhood Stabilization Program a brief exclusive opportunity to purchase bank-owned properties in certain neighborhoods so the homes can be rehabilitated, rented, resold, or demolished.

More information at: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-187

FHA premium increases postponed to Oct. 4

Bud Zeller — Mon, 23 Aug 2010 18:53:06 +0000

The Federal Housing Administration (FHA) announced last week it is pushing back the implementation date for new premium structures on FHA-insured mortgages to Oct. 4 from the original date of Sept. 7.

Following FHA Commissioner David Stevens’ recent announcement that up-front premiums for FHA-insured mortgages would be reduced beginning Sept. 7 from 2.25 percent to 1 percent, lenders expressed concerns that they would need more than five weeks to update loan disclosures and computer systems.

FHA previously raised up-front premiums from 1.75 percent to 2.25 percent in April to cope with rising losses on FHA-guaranteed loans. The Obama administration promised to reduce up-front premiums if Congress gave it the authority to raise annual premiums beyond their statutory limit of 0.55 percent. HR 5981, legislation raising the statutory limit on annual premiums to 1.55 percent, was approved by lawmakers on Aug. 4 and has been signed by President Obama.

More information at: http://portal.hud.gov/portal/page/portal/ver-1/HUD/federal_housing_administration/docs/BottStatementPremiumChanges.pdf

FHA Loan Changes!

Bud Zeller — Wed, 20 Jan 2010 21:47:14 +0000

On January 20, 2010, FHA announced major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness of the FHA insurance fund ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.

FHA announced changes in the following areas:
The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP.
Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.
FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the up-front premium.
Seller concessions will be reduced to 3 percent from 6 percent.

FHA will make the following lender enforcement changes:
FHA will implement credit watch terminations at lender underwriting.
Public reporting of lender performance through scorecard system will be implemented.
FHA will implement, through notice and comment, indemnification against lenders. Indemnification will be expanded beyond fraud and misrepresentation.
FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.

This is encouraging news for home loans not only for Placerville, (El Dorado County), California, but nationwide. Hopefully, FHA will also reconsider and change or delete some of their recent regulations that have caused negative impacts, plus new loan processing delays.