Real Estate Finance « Sacramento Association of REALTORS® Web Log

The Cost of Working with FHA is Going Up Again

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

Real Estate Finance Forum – The Year in Review

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

About the Market - December 2009

Jim Hanson

Monday, December 7th, 2009

Jim Hanson - 2009 Real Estate Finance Forum Chair

This is my 24th and final article as the Chair of the Real Estate Finance Forum. What a blessing it has been to serve this Association and you, its Members. I wanted to take this opportunity to say thank you to all my faithful readers. It has been a blast. I have learned so much and this position has helped me grow as a person and as a mortgage originator. Serving on the Board has taught me many valuable lessons as well. I will miss embarrassing myself every month at the Main Meeting giving the financial update. I have done my very best to bring value in every aspect of this position.

I would like to leave you with one important reminder. I wrote about this back in 2008 and believe it to be the single most important topic I covered. Education. You have to stay informed. The massive changes in the mortgage industry are a great example. I noted many changes in our industry over the last two years, some good and some not so good. SAR and the Housing Opportunities Committee have done an outstanding job offering forums that are designed to educate us on the changes taking place in front of our eyes. We must be proactive in staying ahead of the curve. Use change to grow. Use change to make change. Use change to fight changes you do not agree with.

Economically speaking, we are in good shape for the moment. Rates are still low. Last time I looked, inflation was in check. Employment is a huge factor in our economic recovery and is very complicated. Government intervention in many areas of our economy is at an all time high. I am not sure how to respond to the decisions that are being made in Washington at this time. We can only hope our economy gets fired up and pulls us out of the struggles we are having.

Continue reading: About the Market – December 2009

ARRA tax credit monetization and neighborhood stabilization programs

Greg Wilson

Thursday, June 4th, 2009

Monetization of the $8000 first-time home buyer tax credit found in the American Recovery and Reinvestment Act of 2009 is a hot topic these days. The FHA we’ve learned has issued a mortgagee letter (2009-15) regarding monetization of the credit. Roxanne Campanella a Senior Customer Liaison working out of the Sacramento HUD office talked about some of the difficulties in monetizing the tax credit as well as some of the incentives for doing so. She reiterated that regardless of whether the credit is monetized and used in the purchase transaction FHA rules still require a 3.5% down payment and the monetized tax credit could be layered on top of but not be used instead of the 3.5% down payment.

Continue reading: ARRA tax credit monetization and neighborhood stabilization programs

Fannie Mae makes an appearance at the Real Estate Finance Forum

Greg Wilson

Thursday, May 7th, 2009

It has been nearly four years since a representative from Fannie Mae has visited SAR’s Real Estate Finance Forum. Collette Porter a Senior Account Manager for the Northern California region visited from Pasadena to highlight some of the ways Fannie Mae is supporting the current market. Responding to the level of REO properties on the market, Fannie Mae has launched the website www.HomePath.com as a search portal for REO properties. And in response to the recent federal Making Home Affordable Program, Fannie Mae has the website www.fanniemae.com/loanlookup so that individual property owners can determine if Fannie Mae owns the loan for a particular address.

Continue reading: Fannie Mae makes an appearance at the Real Estate Finance Forum

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The Cost of Working with FHA is Going Up Again

Real Estate Finance Forum – The Year in Review

About the Market - December 2009

ARRA tax credit monetization and neighborhood stabilization programs

Fannie Mae makes an appearance at the Real Estate Finance Forum

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