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Upcoming FHA Policy Changes

January 20, 2010


* Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending. The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge. If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.

The initial up-front increase will go into effect in the spring.

* Update the combination of FICO scores and down payments for new borrowers. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.

This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

* Reduce allowable seller concessions from 6% to 3%. The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
 
This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

Foreclosure Prevention Plan

March 10, 2010

April 5th will mark the beginning of a new program by the Obama administration intended to end the foreclosure crisis — one that will pay homeowners to sell their homes.

The program will allow owners to sell their homes for less than they owe and give them cash to expedite the process.

Hundreds of thousands of delinquent borrowers will be encouraged to sell their houses through short sales, in which properties are sold for less than the balance of the mortgage.

The new program will give the servicing bank $1,000, and another $1,000 may go toward a second loan, if one exists. The distressed homeowners will also receive $1,500 in relocation assistance.

Borrowers could suffer less damage to their credit ratings under the new program, and they will receive the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

DALLAS MORTGAGE DELINQUENCIES JUMP IN JANUARY

March 11, 2010


The number of Dallas homeowners 90 days or more late on their mortgage payments surpassed Texas’ delinquency rate in January and the city’s year-ago total, according to First American CoreLogic.

CoreLogic reported that 6.14 percent of Dallas homeowners were 90 or more days behind on their payments in January, up from 4.22 percent in January 2009.

Statewide, 5.65 percent of homeowners were behind, well below the 8.66 percent delinquency rate of homeowners nationwide

USDA Rural Loan Funding

March 17, 2010

USDA is running low on funds and are slated to be out mid to late April.  We do have high hopes that the government will step in and infuse more money into the program before they are officially out!!!  So we are still continuing to work these loans.  We are also informing our customers and real estate agents we work with of the possibility of delays.

 FHA Loan Change

March 17, 2010

As I discussed back in January of this year FHA Loans with case numbers issued on April 5, 2010 or after will have UFMIP will be 2.25%, up from 1.75%.  FHA is requiring this percentage on ALL FHA programs now  (even streamline refinances). 

How Buybacks Are Making Underwriting Tighter

March 18, 2010

The great majority of loans originated today are owned by investors such as Fannie Mae, Freddie Mac, etc... A lender underwrites a loan and may continue to service the loan but they don't usually own the loan. 

Historically, when a loan goes delinquent within the first 6 months the lender must buy the loan back from the investor.  Also, if a loan goes delinquent after 6 months and an audit finds a deficiency in the underwriting, the lender is obligated to buy back the loan.

In today's environment where Fannie Mae and Freddie Mac are continuing to lose billions the buybacks are getting bigger.  In fact, almost all investors are now hiring outside auditors to comb through files to find anything that gives them an excuse to force a buyback.  As a result lenders are becoming more careful and are underwriting to prevent buybacks.

What’s in your FICO® score

April 23, 2010

FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your FICO score.

Payment history: 35%, Amounts owed: 30%, Length of credit history: 15%, New credit: 10%, Types of credit used: 10%

These percentages are based on the importance of the five categories for the general population. For particular groups - for example, people who have not been using credit long - the importance of these categories may be somewhat different.

Upcoming Fannie Mae Changes

May 13, 2010

Beginning June 1st Fannie Mae will be requiring a second full credit screening immediately before closing.  According to a Fannie bulletin issued in March, Fannie Mae "directs the lender to review and evaluate the 'inquiries' section of the borrower's credit report to determine if the borrower has received additional credit that is not reflected in the credit report or disclosed on the loan application. If additional credit was obtained, a verification of that debt must be provided and the borrower must be qualified with the monthly payment."  The moral of the story is don't allow any changes to your credit profile between application and funding.

That means:

 What is yet to be seen is how different lenders initially interpret the new ruling. 

In the News -- Debt Settlement: Solution or Scheme?
BBB Dallas on the Today Show
 

July 13, 2010

In this story on NBC's Today Show, Lisa Myers reports that many consumers are trying to reduce credit card debt by turning to debt settlement companies. But complaints on debt settlement firms allege misrespresentation and unsatisfactory service.

One debt settlement company in Dallas, Credit Solutions, has a BBB rating of "F". Chris Burgess of BBB in Dallas notes, "We've seen so many complaints that you have to wonder what is Credit Solutions actually doing?"