Eliminating the Down Payment Assistance Programs Like Ameridream
August 17th, 2008 Categories: FHA
Eliminating the Down Payment Assistance Programs Including AmeridreamHUD has claimed that those loans that have a Seller Contributed Down Payment Assistance have a disproportionally higher foreclosure level. According to an article on FHA Mortgage Guide, Scott Syphax, the president and CEO of Nehemiah Corporation of America, says that HUD’s “own inspector general cited as unreliable. In short, FHA undercounts the number of DPA loans by up to three times and divides that number into the number of claims it pays.”
We hear things like three times as many. We never hear actual numbers. I would like to know what the number is and how does it really compare to other loans. I have a feeling the problem is not in the DPA program but in more in the area of fraud. The reason I say that FHA is a fully documented loan. There is no stating your income. You have to prove income, rent… I think that the price is increased to compensate the cost which in turn puts pressure on the appraisers.
So let’s look at how many HUD homes (a HUD home is foreclosed FHA loan) are out there right now. Currently in the Wasatch Front MLS which covers 29 Counties less than 1/10th of a percent of the active listings are HUD homes.
So in hindsight we are going to punish those that can actually afford to make payments while tons of people made fortunes committing loan fraud. The fraud was not at this level but somehow the government seems to think this is a good idea.
I recommend that the program be modified to allow only a three percent contribution. Then the buyer and the lender have to use premium pricing to cover the loan closing cost. I believe that when the loan officer and the buyer have to pay the closing cost that the cost will be monitored and scrutinized little better.
This helps on a couple of levels, in the end the buyer owes less. Yes they may have a little higher interest rate, but that’s the price for not having a down payment. It is better to owe less at a slightly higher rate than to owe more with a little lower rate. I know the lower rate makes sense in the long haul, a borrower can always do a stream line re-fi or come up with a down payment. Besides the life expectancy of the loan is about five years. Plus prices won’t be falsely inflated to cover the down payment and the closing cost.
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Another FHA Article
June 1st, 2008 Categories: FHA
FHA and The Salt Lake Real Estate Market
I have been talking about FHA loans since last summer and the role FHA will have now that the market has shifted. FHA is not as sensitive to FICO scores. This does not mean you can have bad credit and still get a loan. Some people have lower FICO scores not because of a less than desirable payment history. Believe it or not there are still people that do not use credit to buy things other than a house.
FHA only requires a 3% down payment and it can be a gift, a grant or Down Payment Assistant Program aka DPA.
Some people interpret this as a Government bailout and the Government is making bad loans. FHA DOES NOT LOAN MONEY, FHA is an insured loan that is funded by the mortgage insurance premiums of the borrower. The reason FHA works is very simple, it is what is called a full doc loan. Meaning full documentation, all things must be verified. You know trivial things like employment, rental history…
FHA has loosened up in the past few years on some physical requirements. They used to be so stringent that it didn’t make sense. Things like a handrail going to a basement could not be raw wood or a small crack in a window of a detached garage. The purpose of the requirements is to assure people were buying safe homes.
The latest is the increase in the loan limits. This one is huge, there are a lot of people that have homes that were considered a jumbo and therefore the loans had higher interest rates. Even with mortgage insurance FHA loan will be better than most conventional products that have 10% or less down. After all why shouldn’t someone with a good credit history good income minimal debt and a fair down payment get a good interest rate?
I have written quite a few pieces on FHA and still say when choosing a mortgage company make sure they are an FHA approved lender. For more read 8 Reasons Why You Should…
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New Loan Limits For Both Conventional and FHA
March 6th, 2008 Categories: FHA, Mortgage
FHA Raises It’s Loan Limits Along with
Fannie Mae and Freddie Mac
Yesterday the limit on conforming loans were raised from $417,000 to $729,750. This can help the housing market for sure and help reduce the debt service of those that currently have loans from $417,000 to 700,000. Before anything over $417,000 was considered a jumbo loan and jumbo loans usually carry a higher interest rate.
One of the problems that came from the sub-prime debacle is the secondary market for jumbo loans, it is rapidly disappearing. Normally a jumbo loan is more risky, but $417,000 in some markets is not jumbo it is a starter home. Also what about the guy that bought a $630,000 home and put down 20%, that is $126,000 cash and a $504,000 loan. I don’t see the risk there, but because it was above the conforming limit it was.
FHA released it’s limits today. Here is a list of the Utah FHA Limits by County
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Mortgage Rates In Salt Lake City Call
January 25th, 2008 Categories: FHA, Mortgage
Holy cow, how else do you describe the mortgage rates this week. There was a point where lenders were not locking in rates because they were changing so fast. They were at their lowest in a long time, they were back up, they Feds droped the short term rate by 75 basis points, the DOW Jones had a 600 point swing in a day.
So what does all that mean? Rates are great and houses are available, hmmm. A good time to buy? Maybe.
FHA buzz flying around today, there has been talk about raising the FHA limit and lowering the 3% down payment to 1.5%. Before everyone starts crying that kind of lending got us in trouble in the first place. NO IT DIDN’T. FHA is a full doc loan, meaning you need a job that you can prove. Lenders are more regulated. Boy has there ever been a time to be a FHA loan officer for a FHA qualified mortgage company (most aren’t).
Rates are under six for the basic stuff and not much more for the not so basic.
Call Cindee at 801-381-3863 or Cindee@CindeeStone.com
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Mortgage Rates In Salt Lake City
January 11th, 2008 Categories: Mortgage
Rates have this week, 30 Year Fixed under 6%.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
Conventional and Government Loan Interest Rates
|
Program |
Rate |
APR |
| 95% | 5.75 | 6.96 |
| 100% With Mort Insurance | 6.00 | 7.45 |
| 100% No Mort Insurance | 6.63 | 6.81 |
| My Community 100% | 6.50 | 7.39 |
| VA 100% | 5.75 | 5.92 |
| FHA 97% | 5.75 | 6.57 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
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Mortgage Rates In Salt Lake City
January 4th, 2008 Categories: Mortgage
Rates have this week, 30 Year Fixed under 6%.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
Conventional and Government Loan Interest Rates
|
Program |
Rate |
APR |
| 95% | 5.75 | 6.96 |
| 100% With Mort Insurance | 6.00 | 7.45 |
| 100% No Mort Insurance | 6.63 | 6.81 |
| My Community 100% | 6.88 | 7.80 |
| VA 100% | 5.75 | 5.92 |
| FHA 97% | 5.75 | 6.57 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
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Mortgage Rates In Salt Lake City
December 14th, 2007 Categories: Mortgage
Rates have gone up a little in the last week, or should I say last rates dipped a little below six. There are deals out there.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
|
Program |
Rate |
APR |
| 95% | 6.25 | 7.43 |
| 100% With Mort Insurance | 6.38 | 7.78 |
| 100% No Mort Insurance | 7.00 | 7.19 |
| My Community 100% | 6.88 | 7.80 |
| VA 100% | 6.00 | 6.81 |
| FHA 97% | 6.00 | 6.17 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
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More Reasons For Salt Lake Home Buyers To Use FHA
December 14th, 2007 Categories: FHA
Banging On My FHA Drum Again
There have been a couple of changes recently in the lending arena, Fannie Mae and Freddie Mac have added a new risk assessment fee and they are adding “delivery fees”
First let’s look at the risk assessment fee for those buying with a higher than a 70% loan to value ratio.
Credit scores will determine the amount of the rate adjustment.
- Credit scores between 660-679: 0.750% of loan size in fees
- Credit scores between 640-659: 1.250% of loan size in fees
- Credit scores between 620-639: 1.750% of loan size in fees
- Credit scores below 620: 2.000% of loan size in fees
This can have an impact on home prices, because when qualifying for a loan, the borrower is based on a monthly debt to income ratio. The same amount of monthly income is now able to borrow less money.
I like this solution so far, it doesn’t affect people that have good credit or a large downpayment. Let’s face it, if you have a less than favorable credit history and no down payment, you are a higher risk.
Now let’s look at the other fee.
Fannie Mae
Fannie Mae’s new fee is called an “Adverse Market Delivery Charge”
Freddie Mac
Freddie Mac’s new fee is called “New Market Condition Postsettlement Delivery Fee”
They both are charging an additional .25% fee at closing. Although it is not a huge cost, this one appears to be across the board. The other fees are based on credit score which is the best way to determine the risk. This one is a little unfair, because it lumps everyone together.
FHA Loan and Limits In Salt Lake
Now with all that said, they DO NOT apply to FHA or VA Loans that are insured or guaranteed by the Federal Government. Although FHA an VA have always had a upfront fee FHA Does Not Use FICO Score, VA has it’s own set of rules that are pretty similar to FHA.
Hmmm, I wonder which loan program is going to be become very popular in the next couple of years. So I am going to bang on my FHA Drum again. I know FHA only goes up to $362,790 in loan amount. That is approximately 83% of all the homes sold in Salt Lake County this year.
8 Reasons To Use An FHA Approved Lender
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FHA To Keep Their Loan Limits the Same
November 28th, 2007 Categories: Real Estate News
FHA has announced to keep their loan limits in place for the coming year 2008. The FHA maximum loan amount is 87% of the conventional loan limit of $417,000. Salt County falls into the 87% making the total loan amount for Salt Lake $362,790
There had been a lot of talking about raising the limits on the conventional amounts to adjust to the recent rise in home prices. Based on some articles by Peter G. Miller (Good Site) over at FHA Mortgage Guide, he talks about if loan limits go up when prices go up, then they should go down when prices go down. So in essence keeping them the same while in some markets prices are going down some is good for the housing market.
Click for a table of FHA Loan Limits for Utah Metro Areas.
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Mortgage Rates In Salt Lake City
November 16th, 2007 Categories: Mortgage
The new “FHASecure Progam” may be coming out soon according to my Wells Fargo Bank Lender Reps reports that I have been receiving this week.
This will be a benefit to those who have adjustable ARM mortgages that are not currently an FHA loan and the interest rate has adjusted. If your interest rate has adjusted and you were delinquent on your loan due the adjustment, you may qualify for this special refinance program.
More information to come as it is officially released.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
|
Program |
Rate |
APR |
| 95% | 6.125 | 7.304 |
| 100% With Mort Insurance | 6.25 | 7.656 |
| 100% No Mort Insurance | 6.625 | 6.810 |
| My Community 100% | 6.625 | 7.559 |
| VA 100% | 6.0 | 6.816 |
| FHA 97% | 6.0 | 6.176 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
The above figures are deemed reliable but not guaranteed. This advertisement is being provided for informational purposed only and is not to be construed as a loan commitment of any kind. Actual loan qualifying is subject to verification and approval of income, credit, property, appraisal and other factors. Rates, fees, and programs are subject to change at any time without prior notice. A detailed good faith estimate will be prepared upon your application for a loan.
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