The Federal Housing Administration (FHA) has announced some significant changes to its loan programs and policies, making FHA loans more costly for borrowers and easing the pressure put on the agency’s Mutual Mortgage Insurance Fund as a result of the U.S. housing crisis. Changes will take effect April 1.
Here’s a summary of the changes: Read the rest of this entry »
It used to be that loan limits would change every year based on prior housing trends. Given that home values in 2012 largely rose, it might be expected that loan limits in 2013 would increase. In fact, the Federal Housing Finance Agency announced that loan limits will remain unchanged next year.
Generally speaking, the most common loan limit continues to be $417,000. This is high, however, when you consider that the national median existing home sold for $186,100 in the third quarter, according to the National Association of Realtors.
Seniors who want to tap their home equity through a reverse mortgage might want to keep a close watch on the Federal Housing Administration (FHA).
The Home Equity Conversion Mortgage (HECM) program, a reverse mortgage backed by the FHA, is showing signs of substantial stress, and U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan has a plan to relieve the pressure. Read the rest of this entry »
For the fourth time since 2010, HUD has decided to waive its anti-flipping rule, good news for real estate markets nationwide which remain hobbled by the mortgage meltdown.
Starting in 2003, HUD set out regulations which prohibited the use of FHA-insured financing for properties that had been resold within the past 90 days. The purpose of the rule was to stop illegal flipping, the practice of selling homes through the use of mortgage fraud and appraisal fraud.
There was a big commotion last week when HUD announced that the reserves “used to support FHA’s single family mortgage and reverse mortgage insurance programs fell below zero to -1.44 percent. This represents a negative economic value of $16.3 billion.”
In fiscal 2012, the government accounting calendar which just ended, the FHA insured 1,239,874 loans. Most of these were “forward” loans, the 15-year mortgages and 30-year mortgages that most of us consider when we buy or refinance real estate.
The report is in. It’s not good.
The “Annual Report to Congress Regarding the Financial Status of the FHA Mutual Mortgage Insurance Fund Fiscal Year 2012” shows the FHA’s reserve fund has fallen to -1.44 percent—far below the 2 percent cushion mandated by Congress, and may open the door to the first infusion of government cash in the insurer’s 78-year history.
Nearly one year ago to date, we published a blog post titled, “Is FHA the next housing bailout?” Fears surrounding the federal mortgage insurer’s reserve fund, or lack thereof, really haven’t dissipated since then. In fact, the state of the FHA reserve fund has been in question for years.
Both the public and private mortgage markets reacted to the downturn by instituting very strict lending conditions. Thus, during the height of the downturn, the FHA became a refuge for would-be borrowers seeking relaxed credit-score and down payment requirements.
In the next few weeks, we will find out how the FHA’s reverse mortgage program has done in the past year. This is an important benchmark because the reverse mortgage program has lurched along, creating big losses for the FHA and its reserve system.
Those who say Congress hasn’t done anything this year have not been reading the FHA Emergency Fiscal Solvency Act of 2012. This legislation, HR 4264, passed the House of Representatives with a vote of 402 to 7.
Given the divisive nature that has been seen on Capitol Hill during the past several years, you might wonder what could possibly get such an overwhelming majority to agree? Combine the FHA with the words “fiscal solvency” and you’ve got a winner. Read the rest of this entry »
Many borrowers who have tried to purchase a condo with an FHA mortgage in the past couple of years have bumped up against a frustrating dilemma: the condo they want to buy is not approved for FHA financing.
FHA condo buyers face a double application process: both the borrower and the condominium must meet the lender’s requirements. The FHA maintains a list of approved condominiums and recently revised its guidelines for placing developments on that list. Borrowers can only use FHA loans in buildings that already have FHA approval.
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
