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 Scott Short  Friday, March 11th, 2011  On Friday, January 28th, HUD/FHA extended the “Less Than 90-Day” flip rule. Now trying to find a lender who will allow the seller to resell for 20%+ over what they bought it for is becoming more difficult.
Last October HUD/FHA increased the Monthly Mortgage Insurance (MMI) cost from .55% to .90% for a 30-year fixed with a minimum down payment loan. During that time, HUD/FHA also lowered the Up Front Mortgage Insurance Premium (UFMIP) they finance into the loan from 2.25% to 1%.
In a move to increase their capital reserves and encourage private money back into mortgages, HUD/FHA will once again raise the MMI cost. On April 18 MMI goes from .90% to 1.15% for 30- and 15-year fixed loans with minimum down payment. (Since April 18 is a Monday, your loan professional needs to pull the case number on Friday April 15 to avoid this increase.)
One positive outcome for homebuyers from this new change is that the HUD/FHA system will automatically cancel any uninsured case number where there has been no activity for six months since the last action except for:
- Loans where an appraisal update has been entered, and/or
- Loans where the Upfront Mortgage Insurance Premium (UFMIP) has been received
Last action includes:
- Case number assigned
- Appraisal information entered
- Firm commitment issued by FHA
- Insurance application received and subsequent updates and
- Notice of Return and Resubmissions
Continue reading: The Cost of Working with FHA is Going Up Again
Scott Short Thursday, February 10th, 2011
The only good thing about interest rates going up is the “fence sitting” buyers jump in to the market.
Normally December and January are relatively slow months, but not this time. We are experiencing a high volume of borrowers wanting to buy now. Some of the buyers trying to qualify for a home loan are more challenged. Along with the lenders’ tightening standards, we in the lending industry are taking longer to figure out creative solutions to help more of your clients qualify. We are seeing more credit-challenged, budgetchallenged, employment-uncertaintychallenged and house-challenged borrowers. This is the time your mortgage professional needs to know how loans were structured back in the early 1990’s.
Almost every loan will need full documentation of the following: three months of bank statements (underwriters are scrutinizing the bank statements for overdrafts and unusual deposits), explanation letters for credit (especially all inquiries), job status (state employees need a supervisor to write a letter to address the borrowers’ furlough impact now and in the foreseeable future), motivation to buy (they are not just buying a home for a displaced family member who lost their home in foreclosure) plus other scenarios that defy the imagination some days.
At the time of this writing, HUD/FHA had not issued an extension for the “less than 90-day flip rule.” My sources inform me that HUD is working on it (not sure what “it” is going to look like when it comes out). We have seen a majority of the lenders that offer the program retract from offering the program for flips where the seller re-sells for greater than 20% over their purchase price.
Continue reading: 2011 Starts off with a Bang
Scott Short Thursday, December 9th, 2010
All I can say is WOW! This year has not been boring. Game changing events happened almost every month.
We started out the year with total confusion in the mortgage industry due to the new Good Faith Estimate (aka: GFE 2010). It took most mortgage professionals at least a month or two to understand the new form and the impact it would have on the consumers and themselves.
Consumers received overinflated GFEs to protect the loan officer from underdisclosing everyone’s fees in the transaction. If certain fees were underdisclosed, the loan officer would have to pay for it out of his/her pocket. One of the mysteries with the new GFE 2010 is that there is no place on the GFE 2010 to sign. There is a separate form for signatures. Now where is the consumer benefit from this change?
While struggling with the new GFE 2010, HUD/FHA released a waiver that they will allow “less than 90-day flips” to be financed with FHA loans (another program with a ton of misinterpretation).
Oh, did I forget to mention that HUD/FHA decided January 1, 2010 to adopt HVCC (Home Value Code of Conduct) practices for all their FHA loans. The industry thought HUD would have seen the “train wreck” Fannie and Freddie created with HVCC and steered away. But in the spirit of follow the leader, HUD jumped in with both feet. Can you say complexity, when you have HUD’s version of HVCC and the new appraisal requirements for the “less than 90-day flips?” This is just another reason the industry slowed down even more at the beginning of the year.
Continue reading: Real Estate Finance Forum – The Year in Review
Steve Goddard Tuesday, May 11th, 2010
 Steve Goddard - 2010 C.A.R. President Dear C.A.R. Member,
Greetings from Washington, D.C.! This week, your Leadership Team and I are in our nation’s capital, meeting with California’s congressional delegates and representatives from leading housing industry groups, including Fannie Mae and Freddie Mac, HUD, the Mortgage Bankers Association, and others. Tomorrow, we’re meeting with Senator Boxer’s Chief Economic Advisor, Marcus Stanley, and Housing Coordinator Jeff Moscovitz. On Thursday, we’ll meet with FHA Commissioner David Stevens, and on Friday with Grace Cooper, the acting director of the Veterans Administration, and Bill White, the VA’s loan service supervisor.
What happens in Washington has far-reaching implications for the housing market back home in California and its impact reverberates through all facets of the real estate industry, including our own. That’s why it’s more important than ever to become involved in the political process. Our goal in Washington is to make certain that our interests are represented, and that our voices are heard, before elected officials craft legislation impacting our industry.
This is a busy time of year in the legislative arena, on both the national front and in California. Following our federal lobbying trip, nearly 2,000 REALTORS® will converge in Sacramento on June 9 for the Association’s annual Legislative Day activities. Legislative Day is a great way to meet face-to-face with your state legislators to discuss the issues that affect our industry — and your livelihood — the most. Assembly Speaker John Pérez and Senator Dennis Hollingsworth are set to kick off the Morning Briefing, followed by opportunities to meet with your own elected officials in the afternoon.
If you’ve always wondered how Sacramento works, or what elected officials really do, this is your opportunity to find out firsthand. If you’ve never participated, I hope you’ll consider doing so this year – please add your voice with that of other REALTORS® and join us.
Continue reading: Your May Message from C.A.R. President Steve Goddard
Stella Ling Friday, February 26th, 2010
A real estate broker’s commission may be determined using a percentage of the sales price, a flat fee, or a combination of both, according to a recent letter from HUD’s General Counsel Helen Kanovsky. The February 26th, 2010 | Tags: Helen Kanovsky, HUD, HUD-1, RESPA | Category: Press Release |
Chris Ly Thursday, August 20th, 2009
Last month, PEMCO offered a free seminar on selling HUD homes in Sacramento. A HUD home is a one-to-four unit residence acquired as a result of a foreclosure on an FHA-insured mortgage. In California, PEMCO is the marketing and management contractor who sells HUD homes.
After HUD acquires the property, the property is appraised, title issues resolves (if needed), and HUD’s discount sales programs are determined for eligibility.
In order to show or submit contracts on HUD homes, you must be a registered real estate broker who is properly registered with HUD. Homes are first offered to individuals in possession of a Federal Registration number related to disaster relief efforts from Hurricanes Katrina, Wilma, and Rita. They are then offered to owner occupant purchasers with any remaining houses available to all buyers, including investors.
Continue reading: Selling HUD Homes
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