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Changes to FHA Mortgage Insurance effective October 4th

On September 2, 2010, in FHA Mortgages, by Todd Abelson | View Comments

As a result of new Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up-Front and the Annual Mortgage Insurance premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.

Here are the 6 things you need to know about these changes:

1. The Up Front premium is now 1.0 % for all standard FHA programs

2. The Annual premium is now .90% for LTVs GREATER than 95% on 30 year loans

3. The Annual premium is now .85% for LTVs EQUAL to or LESS than 95% on 30 year loans

4. The Annual premium is now .25% for LTVs GREATER than 90% on 15 year loans

5. The Annual premium is now .00% for LTVs EQUAL to or LESS than 90% on 15 year loans

6. These premiums apply to purchases, regular refinances and streamlines

Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%.

The result will be HIGHER monthly mortgage payments on new loans, although Borrowers will maintain a bit more equity. Just what we needed, right? HIGHER mortgage payments!!!

The question I ask myself now is – “why doesn’t every homeowner with an FHA loan that paid Up-Front Mortgage Insurance of 2.25% consider REFINANCING not only a lower rate, but to receive a full refund of the unused Up-Front MIP they paid?” Didn’t anyone in Washington think of the Negative effect this will have on the FHA coffers???

Call Todd Abelson & Tyler Ford at Sunstreet Mortgage in Tucson, AZ at (520) 331-LEND for all your mortgage needs!

Tucson Mortgage Weekly 6-1-10

On June 1, 2010, in Tucson Mortgage Weekly, by Todd Abelson | View Comments

Brought to you by Todd Abelson and Tyler Ford of Sunstreet Mortgage – Tucson, AZ


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Tucson Mortgage Weekly 4-26-10

On April 26, 2010, in Tucson Mortgage Weekly, by Todd Abelson | View Comments

Brought to you by Todd Abelson and Tyler Ford of Sunstreet Mortgage – Tucson, AZ


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Click here to view the Tucson Mortgage weekly newsletter.

FHA to increase Mortgage Insurance & Down Payment

On January 21, 2010, in FHA Mortgages, Market News, Mortgage Programs & News, Tyler Ford & Todd Abelson, by Todd Abelson | View Comments

In an attempt to recoup past losses, reduce the potential for future losses and sure up FHA’s sagging reserves a staggering series of changes will be implemented “soon”. Click here for article

First, and most immediate, the Up-Front MIP for all FHA loans will be increased from 1.75% to 2.25%. The start date for this increase will be announced today but Ianticipate it will begin with case numbers assigned starting February 1st. Following this in “the spring” will be an increase in the monthly MI fee as well.

Second, down payment requirements will be increase for 3 1/2% to 10% for “low FICO score borrowers” (under 580). This change is expected to be implemented “early summer”.

Third, the level of allowable “Seller Concessions” will be cut in half from 6% to 3%; this also will be implemented “early summer”.

Fourth, increased monitoring and enforcement on FHA lenders effective immediately.

These changes are H-U-G-E and will affect the entire market. While just loosening the anti-flipping rules 48 hours ago, this changes tighten – good for taxpayers, bad for sellers, buyers and the real estate markets.

For these and other breaking stories, stay in touch and call Todd Abelson and Tyler Ford at Sunstreet Mortgage in Tucson Arizona.

The Bad Jobs Report Wasn’t All Bad — Mortgage Rates Fell

On January 12, 2010, in Uncategorized, by Tyler Ford | View Comments

Unemployment Rate 2007-2009Despite the headlines, it’s important to remember that December’s jobs report wasn’t all bad news.

Sure, the economy shed 85,000 jobs last month and the Unemployment Rate failed to dip below 10%, but for home buyers and rate shoppers in Tucson , the news was just fine.

The soft employment data led mortgage rates lower, making homes in Tucson, Arizona for example, more affordable for buyers.

There is two sides to every economic coin.

Since early-2008, the U.S workforce has been closely tied to home financing. As the economy slowed and jobs were lost, Wall Streeters pulled money from the risky stock markets and moved it to of the relative safety of bond markets, instead.

Safe haven buying led mortgage bond prices higher which, in turn, caused rates to fall. Mortgage rates fell to 6 all-time lows in 2009. In a related statistic, 4.2 million jobs were lost last year.

And this is why Friday’s non-farm payrolls report was so good for buyers.

See, in November, the economy added new jobs for the first time since 2007, housing looked strong, consumer confidence was growing.  The safe haven buying reversed and mortgage rates took off.  Analysts believed the nation’s economic turnaround was complete.

But now, after December’s jobs report returned to the red, Wall Street is forced to rethink its position. Safe haven buying is back and mortgage rates are lower because of it.

Over the next few months, expect a lot of this back-and-forth action in rates. In general, positive news for the economy will be met with higher mortgage rates and negative economic news will be met with lower mortgage rates.  There will be exceptions, but the general rule should hold.

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