A recent Bloomberg article on FHAmortgage rates reported that FHA 2009 Endorsements Exceed $.25 Trillion. The origination of loans insured by the Federal Housing Administration during the current fiscal year, including reverse mortgages, has exceeded a quarter-trillion dollars.During June, 194,528 FHA home loans were endorsed for $36.9 billion, according to data reported by the U.S. Department of Housing and Urban Development. FHA refinance loans accounted for 96,920 of June’s endorsements, while purchases represented 88,975
Expanded opportunities for Fannie Mae to Fannie Mae refinance loans through Refinance Plus (manual underwriting) and DU Refi Plus.A new solution for borrowers with LTVs above 8% who currently may not be able to refinance because of existing MI coverage requirement.
Loan To Values’ up to 105% on the new loan and additional underwriting flexibilities.See FHA loan Announcements 09-04 and 09-13, the FAQs document, and other mortgage resources provided via the links below for details on Fannie Mae’s refinance effort.
Flexible MI Requirements to Assist Borrowers with Home Price Declines:Fannie Mae’s regulator, the Federal Housing Finance Agency (FHFA), has authorized us to provide refinancing opportunities for loans we currently hold or have guaranteed with current LTVs up to 105%, with specific flexibility regarding MI coverage for FHA loans with LTVs above 80 %.
The following general guidelines apply: For existing FHA loans with original LTV ratios at or below 80% and no existing MI coverage, the new refinanced loan does not require MI coverage.
For existing FHA home loans with original LTV ratios over 80% that currently have MI coverage in force, the new refinance requires the level of insurance coverage in force on the existing loan or our standard level of insurance coverage. The FHA mortgage lender is encouraged to use its best efforts to obtain MI coverage that provides the lowest cost option available to the borrower.
For existing mortgage loans with original LTV ratios over 80% that do not have MI currently in force due to prior cancellation or termination in accordance with the Selling Guide or the Servicing Guide, the new refinance does not require MI coverage.
See FHFA’s Statement on Fannie Mae and Freddie Mac Refinance Initiatives available at the link below for details on this new authority
Refinance Plus (Manual Underwriting)
Refi Plus simplifies the process of refinancing loans that are already in a lender’s servicing portfolio. This product supports the new 105 % maximum LTV and MI flexibilities for LTVs over 80 %.
DU Refinance Plus
DU Refinance Plus provides increased efficiencies for the origination and underwriting of Fannie Mae to Fannie Mae limited cash-out refinance transactions in DU. Eligible loans identified in DU receive increased underwriting flexibilities, including expanded eligibility criteria and DU minimum documentation requirements.
The DU Version 7.1 April Update release and May Update release will implement these underwriting flexibilities. Release Notes and FAQs for the May Update release (implementing the weekend of May 2, 2009) and updated Release Notes for the April Update release are now available. See the DU Release Notes page on eFannieMae.com for details (available at the link below).
The amazing expansion for FHA mortgage lending throughout 2008 was achieved mostly as a result from from the eroiding financial condition of the private mortgage insurance companies. For the first time in over 20 years, are reporting that FHA loans have become a major force for home financing.
HUD’s FHA mortgages maintained a record 69% of new primary mortgage insurance written during the 4th quarter of 2008. That is the FHA loan product’s most significant share in the mortgage market in many years.
The Obama administration unveiled its $75 billion Homeowner Affordability and Stability Plan earlier this month. The home refinancing programs will enable some homeowners to refinance their mortgages into lower-cost, thirty-year or fifteen-year loans featuring fixed interest rates by making mortgage compnaies Fannie Mae and Freddie Mac refinance those mortgages that they have securitized on Wall Street.
The Obama plan would temporarily approve Fannie Mae and Freddie Mac to provide mortgage refinancing that they own or guarantee with loan-to-value ratios (LTV’s) of as much as 105% without appraising the property or requiring additional mortgage insurance.That means that first and second mortgage loan balances can be 5% greater than the property’s appraised value.This is good news for thousands of homeowners who recently found themselves upside-down with mortgage balances that exceeded that home values. Because of the lack of home equity, these homeowners were previously unable to qualify for traditional or FHA refinance loan.
Borrowers who don’t have mortgage insurance on their current home mortgages will not need it under the plan, Lockhart said.Without new appraisals, the loan-to-value ratios could be far higher than 105%, masking the companies’ true risk, said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia.“They’re a public policy arm of the federal government right now,” Miller said of Fannie and Freddie. “They aren’t being run for profitability.”
FHA mortgage rates remain very attractive for borrowers who do not have much home equity left. Qualifying for a home loan that is fixed for 30 years is still a great day for home financing. FHA home loans enable borrowers with less than perfect credit qualify for home refinancing. Gone are the days of the zero down home loans that enable homeowners to consolidate credit card debt or take out a cash out second mortgage that homebuyers would have to quickly refinance.
FHA continues to offer great 1st time homebuyer programs with new home financing requiring only 3.5 percent down. FHA mortgage lenders remain optimistic that Hope for Homeowners may help some of their borrowers prevent foreclosure. Home financing guru, Jason Cardiff said, whether its FHA or a loan modification, homeowners need to get up and do something to stop foreclosure.Cardiff continued, “Lenders are offering loan workouts like we’ve never seen before, so contact a mortgage lender to refinance or seek counsel from a law firm that has a good track record of loan modifications with your mortgage lender.”
Federal Rate Cut Lead to Lowest Mortgage Rates Ever
The Federal Reserve cut the federal funds interest rate on Tuesday The Fed cuts the benchmark interest rate to nearly zero, and CNBC’s Diana Olick said this might help lower mortgage rates. Susan Wachter, a professor of real estate, finance and city and regional planning at the Wharton School of the University of Pennsylvania, said cutting the interest rate will help change the housing market and move toward a bottom on housing prices, although it may take a while for banks to start originating much need mortgage loans. Olick added that to get those cheap rates, buyers must have impeccable credit and money to put down on the home loan.
FHA home loans remains the most populating mortgage for both first time homebuyers and struggling homeowners who need to refinance their adjustable rate mortgage into a fixed rate. Hope for Homeowners even offers delinquent borrowers with no equity an opportunity to refinance. FHA mortgage rates continue to shock the nation with fixed rate mortgages for thirty-years still below 5%. If you can’t qualify with FHA, consider a loan modification that can reduce your interest rate and your monthly payment just like home refinancing. Recently, many loan modification companies have reported successful mortgage relief with reduced rate terms that enable homeowners to prevent a foreclosure.
FHA will continue to offer mortgage lenders a better refinancing option than foreclosing on borrowers. Similar to a loan modification or the FHASecure refinance loans, FHA lenders will be encouraged to write-down the outstanding home loan principal balances to 90% of the new value of the property. In many cases, reductions in principle will cost lenders less than the losses associated with foreclosure.
Market Stability and Liquidity
By continuing to fight the foreclosure rate, this HOPE for Homeowner loans will support FHA’s existing effort to stabilize local housing markets. From September 2007 to June 2008, FHA home loans have guaranteed more than $93 billion of mortgage capital.
Mortgage Funding
FHA will insure up to $300 billion in new FHA refinance loans. Borrowers will pay an upfront premium of 3 percent of the original mortgage amount and an annual premium of 1.5% of the outstanding mortgage amount. Any further costs incurred by FHA will be reimbursed by Fannie Mae and Freddie Mac.
Loan Program Timeline
The program will last from October 1, 2008 through September 30, 2011. Since September 2007, FHASecure has aided more than 290,000 families with more affordable fixed rate mortgage loansFHASecure is on pace to help 500,000 families by the end of 2008.
The subprime market, which has been blamed for sparking the current financial and credit crisis, is pretty much dead and gone. FHA home loans have now become the primary home financing tool for lenders nationally.FHA has upheld their promise to lend to people with little money for down payments and credit blemishes.
The FHA requires a 3 percent down payment (due to raise to 3.5% beginning next January), compared with 20 percent for some conventional mortgages. The FHA also doesn’t require a minimum credit score, although lenders typically have minimum standards in place. But these minimums are nowhere near as stringent as those of conventional loans.For a conventional loan, you need a credit score of at least 660 if you’re putting 20% down and at least 700 if you have less than 20% startup equity. Most lenders who have a minimum credit score requirement for FHA loans will approve someone who has a score of as low as 500, but typically the required minimum is 580. But, that’s a lot less than what conventional lenders are asking for.
On top of that, the government has substantially increased the amount of money that can be borrowed through FHA loans, And, for the first time, FHA is allowing homeowners who are behind on their monthly payments to refinance through the FHA.Nationally, the FHA is insuring more than $24 billion in mortgages a month, up from about $6 billion a month a year ago, a figure that includes purchases and refinances. In metro Atlanta, the number of FHA loans is on pace to more than double this year.
“All of a sudden, FHA has come back in a big way and is a much bigger piece of the pie,” said Walter Moody, a Macon broker who is president of the Georgia Association of Mortgage Brokers.Jan Wagner, president of Canton Street Mortgage in Roswell, said her company began handling FHA loans only this year. But now, nearly one in three of her company’s mortgages are backed by the FHA.
Unlike the subprime market, FHA has measures in place to minimize lender risk for foreclosure.FHA mortgage lenders continue to praise HUD’s commitment to homeownership.“We have consistent guidelines in that we do require borrowers to document income and their ability to pay,” said Charles Gardner, director of the FHA’s Atlanta homeownership center.Subprime loans would allow people to borrow based on what they claimed their incomes were. The Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Development (HUD), requires borrowers to verify income and submit income tax records. Like conventional loans, FHA is a full documentation loan.
FHA is still the best option for cash-strapped first-time buyers and those who have a credit score of less than 700. Fill out the free loan quote form to see if you qualify for a FHA purchase loan or refinance. Interest rates are low right now, so it’s a good time to refinance, especially if you currently have a subprime adjustable rate mortgage (ARM) or exotic hybrid ARM interest only or negative amortization loan.
The maximum on an FHA insured loan for 2008 is presently $729,750. In the FHA guidelines for the new loan limits would exceed the conforming limits of $417,000 and become what mortgage executives call jumbo mortgage loans.Higher FHA loan limits are set by the federal government as part of an economic stimulus package early this year, were supposed to make jumbo loans more affordable in expensive housing markets. FHA mortgage rates finally have come down on these so-called “jumbo conforming” mortgages, though these home loans may be difficult for many borrowers to qualify for.
Jumbo-conforming loans range in size from $417,000 to nearly $730,000 and are especially important in expensive housing markets. FHA continues to help homeowners who recently lost the equity in their home because of declining real estate values in the region.The FHA home loan limits varies based on the cost of housing in the nearest metro area and can vary from $271,050 in average cost neighborhoods and rise up to $729,750 in the more costly areas of towns. Homeowners that are considering a home refinance with a jumbo sized mortgage but do not have the 20 percent equity that most conforming lenders requires should consider the FHA jumbo mortgage, which enables borrowers to refinance up to 97% on a rate and term mortgage.
With FHA, cash out refinancing is available to 95%. FHA streamline refinance loans, rate and term refinancing and home purchase loans are available to 97.5% loan to value.
Refinance and Avoid a Foreclosure
Don't ignore the letters from your lender Contact your lender immediately.
Contact a HUD-approved Housing Counseling Agency
