Making FHA Loans Your First Choice
From Homescape
written by Amy Le on Wednesday, May 14, 9:22AM
Last week I attended the National Association of Real Estate Editors conference in Dallas. While there was much discussion on what has been deemed “the worst housing crisis since the Depression,” real estate and financial trade groups appeared to be optimistic about the fate of the market. It appears that all eyes are currently locked on the federal government to see how they will help soften the blow.
Federal Housing Authority Commissioner Brian Montgomery, who spoke at the
“People need to realize that there are alternatives, that they don’t have to walk away from homes because of foreclosure,” Montgomery said. “FHA modernization has bipartisan support, but delay of FHA modernization due to partisan politics is hurting consumers,”
FHASecure program
The new FHASecure program, rolled out by the Bush administration in August, was originally designed to help borrowers who had fallen behind on payments on adjustable-rate mortgage (ARM) loans after an interest-rate reset. On April 9, the administration said it would expand the FHASecure program by creating two new categories of eligible borrowers:
1. Those with ARM loans who were late on two consecutive monthly mortgage payments or at two different times over the previous 12 months. FHA will require a 97 percent loan-to-value (LTV) ratio for these borrowers to refinance into a government-backed loan — which in many cases would require lenders to write down some principal.
2. Those with ARM loans who were late on three consecutive monthly mortgage payments or at three different times over the past 12 months. FHA will require a 90 percent LTV ratio for these borrowers to refinance.
HUD said the expanded FHASecure guidelines are set to be implemented on July 14 in conjunction with risk-based premium pricing.
Political gridlock
Montgomery said FHA has already helped some 200,000 American home owners with troubled loans refinance and expects to help another 500,000 homeowners by the end of the year. FHASecure accounted for $28.5 billion of the $68 billion in loans FHA has helped facilitate since September.
Democrats are pushing for an even bigger, $300 billion expansion of FHA loan guarantee programs to enable up to 2 million FHA-backed refinance loans in cases where lenders agree to accept no more than 85 percent of a property’s current appraised value. That plan, which is opposed by the Bush administration, is apart of the American Housing Rescue and Foreclosure Prevention Act. The bill was approved last week but fell short of the margin that would be needed to override President Bush’s threat to veto it.
The Bush administration opposes the expansion of FHA loan guarantees put forward in March by Rep. Barney Frank (D-Mass.) and has called it a “bailout” of lenders and speculators.
Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.
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Comments
Comment from Suzanne, a Consumer:
It's nice to hear that the federal government has some tangible plans in place that have already generated some positive results. I get worried when all I hear about is rate drops - that can't be enough to fix things. In fact, in some cases, it can make things worse.Comment from yanni, a realtor:
Today's Most Popular Fha LoansWhat is fha loans with bad credit ?
Fha loans are the most popular consumer mortgage loans you can possibly have today. Also fha bad credit loans are done by the government, basically the government have created these loans years ago and it was actually very popular. Fha bad credit loans also called fha hud loans have their fha guidelines and fha requirement. So for you to get a consumer mortgage and an fha approval you need to know the guidelines.
1.Fha fees- fha fees are not so much different than any other conventional mortgage loans you had in the past. The problem is that some of us that apply to have a consumer mortgage are being charged high points in conventional mortgage loans. If you will read the fha guidelines you will understand that with fha lending it's a much safer way to go because there are some restriction with the fha fees. 2.Fha appraisal- fha appraisal is also not so different from a normal appraisal you will have to get done in a conventional mortgage. But here the appraiser that will appraise your home will have to be fha approved to get you an fha appraisal done. 3.Fha conventional- fha conventional is not a normal term but some people are using this term for some reason. Fha conventional is not related to one another, fha is fha and conventional is conventional. 4.Fha lenders- there are not a lot of fha lenders and fha brokers. A lot of people think that every mortgage broker can help them with their fha Home mortgage, no. Only a few Mortgage brokers out there are really fha approved, so before you make a decision about the next mortgage broker you will use make sure they're approved. 5.Fha loan limits- the fha loan limits have changed recently. Until march of 2008 the fha limits were up to $417,000, because of states like California, New york and Florida the fha loan limits have changed to $729,000. The new loan limits will help many homeowners to refinance their homes and avoid foreclosure. 6.Fha pmi- fha pmi is the mortgage insurance you required to pay. Please read the fha requirements, in conventional loans you will pay pmi only if your loan is more than 80% ltv. Since fha programs don't offer a second loan on your mortgage they will make you pay pmi instead, which is good because paying pmi is much better then a second loan. 7.Fha rates- fha rates are much better then conventional interest rates. Conventional banks have a higher interest rates because they charge to the index of your loan a margin. Fha interest rates have no margin since the fha program is done by the government. Fha rates are lower then conventional rate loans.
So again learn the fha guidelines and the fha requirements. now you will know the fha loan limits. 1. you will probably have to pay fha pmi. 3. The fha rates shouldn't be higher then conventional rate loans. Now go find fha lenders or an fha broker, get your refinance or mortgage done and save your home.
http://fidelitymutualmortgage.comComment from Amy Le, Editorial Producer, a Consumer:
Thanks for the insight!
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