Friday, September 10th, 2010
FHA announced as of October 4, 2010 that they will change their mortgage insurance costs to the borrower. Before the change, the up front mortgage insurance (the mortgage insurance that is financed into the loan) was 2.25% on or after October 4. It will drop to 1.00%. The monthly mortgage insurance which is added to the borrower’s monthly payment will increase from .55% to .90% (annually on amortized loans over 15 years). Your clients will qualify for less now that the MMI has nearly doubled. It would have benefited the buyer/ borrower if the upfront mortgage insurance went up and the monthly mortgage insurance went down since the upfront mortgage insurance is financed over 30 years (or whatever the amortization might be).
New competition for Short Sales
FHA has turbo charged one of their existing programs, the Short Refinance for Borrowers with Negative Equity Positions. This is a program designed to help borrowers (non FHA currently) to refinance down to 97.75% of their current appraised value, requiring their current first mortgage lender to reduce their principle by at least 10% or more. Remember, all these programs are voluntary for the servicing lender. If a second mortgage exists they will have to re-subordinate back into second position after the new first mortgage. (Max CLTV or Combined Loan to Value is 115%)
Fannie created a website on August 3, 2010: “Know Your Options”
This site was developed to assist consumers in financial distress. This link https://www.efanniemae.com/sf/kyo/index.jsp enables you, the Real Estate professional, to learn more about Fannie Mae’s new website and what it offers your clients.
Additional Resources
Obama Administration Announces Additional Support for Targeted Foreclosure-prevention Programs to Help Homeowners Struggling with Unemployment (http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-176)
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