FHA announced changes (January 20, 2010) in the following areas:
Where's the Money??
* The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP.
* Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.
* FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the upfront premium.
* Seller concessions will be reduced to 3 percent from 6 percent.
* FHA will make the following lender enforcement changes: FHA will implement credit watch terminations at lender underwriting. Public reporting of lender performance through Neighborhood Watch scorecard system will be implemented.
* FHA will implement, through notice and comment, indemnification against lenders through Credit Watch. Indemnification will be expanded beyond fraud and misrepresentation.
* FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
* FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.
To get all the particulars, go to http://bit.ly/7jGECU. The hope is that these regulatory changes will ensure financial soundness and facilitate the housing recovery. Please remember that FHA loans are loans insured against default by FHA.
If you would be interested in buying a home or learning more about FHA loans, feel free to contact me. I look forward to hearing from you soon.
Thursday, January 28, 2010
Subscribe to:
Posts (Atom)
