Another FHA Article
June 1st, 2008 Categories: FHA
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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
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 Fraud Utah In The Top Ten
December 20th, 2007 Categories: Mortgage
The headlines are everywhere.
FBI Launches Mortgage Fraud Task Force in the Nation’s Capital
Easy loans + red hot real estate = the perfect recipe for mortgage fraud
Mortgage Fraud 101: Investigator Finds 400 “Crash and Inflate” Scams
I am always amazed at the creativity of the techniques used to commit fraud. I remember sitting in a Continue Education Class a many years ago that was on loan fraud. I came out of there with what were pretty good ideas. I often wondered did the class help educate or teach more people how to commit fraud.
My general rule of thumb is. The words creative financing and an institutional bank are not usually spoken in the same transaction.
I sometimes get the question. Why can’t a buyer and seller agree to do what they want? The answer I always give is, they can. But if there is a bank involved they now have a say and if the buyer and seller make an agreement that the bank is not aware of is not creative financing, it is fraud.
Usually money is somehow siphoned off the top. In order to do that there has to be more money than reality or the original seller would just keep it.
So the value has to be inflated. The real losers are those honest folks that purchased homes and their values were determined by those falsely inflated home prices. Because when the music stops and the prices slide back and all the fraud folks are just giving their properties back or selling them short. The guy that put down real cash is losing value on his home.
Of course the banks lose big time, but they are not so innocent, loaning money to people with no jobs and bad credit. They should know better.
The old axiom proves to be correct again. Why do people commit loan fraud? Because that’s where the money is.
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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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Mortgage Rates In Salt Lake City
November 30th, 2007 Categories: Mortgage
Rates have come down and inventory is out there, that is a great combination for a buyer. 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% | 5.88 | 7.04 |
| 100% With Mort Insurance | 6.13 | 7.54 |
| 100% No Mort Insurance | 6.75 | 6.94 |
| My Community 100% | 6.50 | 7.43 |
| VA 100% | 5.88 | 6.05 |
| FHA 97% | 5.88 | 6.80 |
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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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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AmeriDream Can Offer Down Payment Assistance On FHA Loans
November 1st, 2007 Categories: FHA
Below is an update on the Down Payment Assistance Front. Recently HUD stated that they were going to do away with the DPA. A DPA is where a seller contributes 3% of the purchase price plus an administration fee to the DPA and the DPA will gift the buyer the down payment.
This program works for FHA loans and that is why HUD is in the middle of it.
A buyer’s down payment can be a gift, however the gift cannot be directly from the seller. So this clever little money laundering technique has benefited many of homeowners get a 100% loan but instead of it being a sub-prime adjustable type thing or an interest only for two years and kaboom. The buyer would have a nice 30 year fixed rate with low monthly mortgage insurance.
So here is the deal in action. Billy Buyer makes an offer on Sally Seller’s home. The offer has an addendum that says that Sally will contribute 2.5% of the purchase price to pay for the buyer’s closing cost. Then Billy Buyer will ask Sally Seller to contribute 3% of the purchase price + a $500 processing fee. So depending on the price of the home, the seller will contribute approximately 6% of the sales price on behalf of the buyer.
Usually the difference is split, meaning the sales price is increased by 3%. The seller agrees to the full 6% concession. SO the buyer gets 100% loan and finances the closing cost.
October 31, 2007
UPDATE
Gaithersburg, MD - United States Federal District Court Judge Paul L. Friedman today ruled in the case of AmeriDream v. Jackson that the Department of Housing and Urban Development cannot implement its regulation on downpayment assistance, which had been scheduled to go into effect today. AmeriDream, Incorporated, a 501(c)(3) charitable entity dedicated to helping low and moderate income families purchase their own homes through the provision of downpayment assistance and other services, had brought suit against HUD Secretary Alphonso Jackson challenging the regulation, which would have reversed prior HUD policies regarding downpayment assistance.
Judge Friedman agreed with AmeriDream’s position that there was a “substantial likelihood” that the regulation violated applicable law. Judge Friedman further stated that the regulation lacked a “reasoned analysis” and was based on “flimsy” support. Judge Friedman also questioned whether HUD acted appropriately in issuing the regulation in view of a published report that Secretary Jackson was committed to that course of action regardless of whatever public comments HUD would later receive. In view of those shortcomings and other considerations, Judge Friedman issued an injunction, effective immediately, preventing the regulation from taking effect.
As the Gold Standard for down payment assistance, AmeriDream remains committed to continue to fight the HUD Rule and to continue its mission to help individuals and families that are in need of a DPA program. Please check http://www.ameridream.org/ for the latest information regarding the HUD Rule.
AmeriDream is fully prepared to meet your DPA needs and to assist you with any transition issues as a result of the HUD Rule. Please contact your Outreach Representative or Customer Service
(or call 1-866-263-7437) for timely and professional service.
Again, thank you for your valuable support through this process.
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Rates In Salt Lake City
October 26th, 2007 Categories: Mortgage
Rates have had some improvements over the last week. It is a great time to do buy or refinance your loans now.
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”.
|
Program |
Rate |
APR |
| 95% | 6.13 | 6.26 |
| 100% With Mort Insurance | 6.25 | 7.61 |
| 100% No Mort Insurance | 6.75 | 6.89 |
| My Community 100% | 6.75 | 7.52 |
| VA 100% | 6.25 | 6.39 |
| FHA 97% | 6.13 | 6.90 |
The rates quoted are based on a purchase price of $400,000 on a 15-day lock. On these conforming loans, there are no prepayment penalties involved. 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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