New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities
WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.
“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Announced FHA Policy Changes:
- Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
- The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
- If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
- This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
- The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
- Update the combination of FICO scores and down payments for new borrowers.
- New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
- This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
- This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
- Reduce allowable seller concessions from 6% to 3%
- The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
- This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
- Increase enforcement on FHA lenders
- Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
- This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
- Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
- Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
- This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
- Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
- Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
- HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
- Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
- Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches
Wildewood Community
• 1,618 sq. ft., 3 bath, 3 bdrm 2 story "Colonial in Wildewood Community" - 
MLS® $315,000
Wildewood Community, California - Great home in Wildewood! 3 bed/2.5 bath Colonial in Hickory Nut at the end of a culdesak and private lot. Stainless appliances,double and Prep sinks, ceramic top stove w/double oven,instant hot water, sep dining, propane fireplace w/remote, garage w/auto door openers, 2 pull down attics for storage,large shed for more storage and workshop, Private multi-level lighted deck complete w/hot tub,outside hot and cold water,close to parks,jogging paths,shopping, restaurants,new neighborhood school and more! Move in condition. Owner/Agent
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Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers. Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream. Breaking news: Tax Credit Can Be Used on Closing Costs. Who Qualifies? First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. Which Properties Are Eligible? The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops. How Much Will the Credit Be? The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors: The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000. The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit. If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit? Yes, some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit. Will the Tax Credit Need to Be Repaid? No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Waldorf, Charles County - Announcing a price reduction on 2514 Fernwood Court, a 1,296 sq. ft., 3 bath, 3 bdrm townhouse. Now MLS® $249,000 - Reduced!.
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When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It's important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.
Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing. That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest. Interest Rate Complacency The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan. But buyers shouldn't be confused by this.
These rates are artificially low!
Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003! Markets are Unforgiving The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money. For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.
If you are waiting for prices to fall even lower, be aware that while holding out for a lower price may help you win the battle, you could lose the war in terms of monthly payments and overall affordability.
With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.
Clock is Ticking on Free Money If you are planning on purchasing your first home this year, you need to know that you need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000.
In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace.
Many thanks to Jeff Gay of 1st Mariner Mortgage for this update - you can contact him for more information at:
Jeff Gay Senior Loan Officer 1st Mariner Bank Phone: (443) 624-0689 Fax: (443) 342-2345 jgay@1stmarinerbank.com
I received my monthly USAA member magazine, and this article stood out. The author, Lisa Holton, suggested several ways to find money now. I'll list the high points, and of course she explained in detail under each suggestions - so if you'd like me to send you a copy of the full article, just email me at Cindy@HomesBuddy.com and ask for the USAA Get Money article. I'll send it to you via email right away.
Her suggestions were (in parenthesis are my comments...)
Cut your budget (or at least MAKE a budget, it's a start!)
Call on your emergency fund (hopefully you have one!)
Add hours at your present job (if they are available)
Get a second Job (that is if you have a first job of course...)
Downgrade your current car, or sell one of your cars
Suspend your college contributions (this was interesting, as she noted your kids can get a loan for college, but you can't get a loan for retirement....)
Conserve any severance payment and spend wisely (and as slowly as possible)
Sell some stuff (yard sales, penny-saver type ads, and of course there is always eBay!)
The article also goes on to list several traps to avoid, and I found it pretty interesting. Let me know if you'd like me to send it.
All my best!
Cindy
Beautifully maintained!
• 1,296 sq. ft., 3 bath, 3 bdrm townhouse - MLS® $255,000 - Great Commute Area!
Waldorf, Charles County - Convienient commute to D.C., Baltimore, Alexandria etc.! Great location near everything in Waldorf!
This townhome has a beautifully updated kitchen with granite countertops,custom tile floors and backsplash, stainless steel appliances with room for a breakfast table!
The separate formal dining room features french doors that lead outside to a deck in a private fully fenced backyard. Ceramic floors in all bathrooms, chair rail, detail molding, ceiling fans and plenty of storage w/pull down attic and 2 sheds. Cozy front porch a plus! Don't miss seeing this one!
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Note that this information is outdated.
This is a FREE Event The Charles County Commissioners and the Tri-County Animal Shelter are pleased to announce that they will be holding a very special baby shower for the new kittens at the shelter who are waiting for their new homes. The shower will be held on Saturday, June 27, at the Tri-County Animal Shelter, 6707 Animal Shelter Road, Hughesville, from 10 a.m. - 3 p.m. In addition to being available for adoption, the kittens are looking for the public to bring them some gifts. The shelter will gladly accept donations of kitten food, kitty milk, soft blankets, and toys. All of these items will help to ensure that the kittens have a nice stay at the shelter while they wait to be adopted. In addition to the shower, June is Adopt-A-Cat Month and the regular cat and kitten adoption fee has been reduced to $45 for the month. Unlike kittens offered for “free,” cats and kittens adopted from the Tri-County Animal Shelter are spayed/neutered, tested for feline leukemia, and given a physical by a veterinarian to assure they are healthy before they go home with their new owners. For more information about the baby shower, items accepted for donation, how to adopt a new pet, or how to volunteer your time at the shelter, please call 301- 932-1713 or 1-800-903-1992, or visit the Tri-County Animal Shelter web site at http://www.charlescounty.org/es/animalcontrol.
When/Where: 6/27/2009 - Tri-County Animal Shelter, 6707 Animal Shelter Road in Hughesville 10:00 AM-3:00 PM
Note that this information is outdated.
Eligibility: This tournament is open to male amateur golfers Competition: 54 hole stroke play event. The format will feature (3) divisions - Overall Championship Division, Senior Division (must have reached 55th birthday by midnight June 19), and a Junior Division (under 18). The Senior Division will compete from the Men's White Tees and will not be permitted to compete for the overall Championship Title. Players will be flighted based upon their handicap and compete in their flight all three days. Handicaps must be verified by their club pro. Entries: Entries open on May 1, 2009 and close June 12, 2009. This year's field will be limited to 180 players. The entry fee is $70 for Juniors (under 18) and $160 for all others. NO APPLICATION WILL BE ACCEPTED OR CONSIDERED RECEIVED UNLESS THE APPROPRIATE ENTRY FEE IS INCLUDED. Players can request preferred tee times and foursomes on Friday and Saturday. Tee Times will be the same Friday and Saturday.
When/Where: 6/19/09 - 6/21/09 7:00AM Breton Bay Country Club
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: HUD Secretary Donovan announces that the $8,000 tax credit may be used as a downpayment.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
REO stands for “Real Estate Owned”.
These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you’ll receive the property 100% “as is”. That could include existing liens and even current occupants that need to be evicted.
A REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements. In Maryland, for example, banks are exempt from giving a Disclosure/Disclaimer Statement, a document that normally requires sellers to tell you about any defects they are aware of.
I know we’ve heard that many times before and for many years, but it still holds true. The amount of homes available for sale right now that will meet your basic wish list criteria can be overwhelming. To reduce the number of homes that you’ll visit, you should first decide what the most important factors are – i.e. number of bedrooms, comfortable price range, neighborhood and type of house.
The location of the home is a factor that most affects its value.
Most homebuyers are prepared to trade off certain factors on their wish list in order to be able to buy a home in the area that they most prefer. This is a very important insight, because you can always make changes to a house – you can upgrade appliances, enlarge a kitchen, put in a pool, build a garage or install a fence but you can’t change the home’s location. Once you move in, you can’t move the house from the city to the suburbs, to a better commute area or from a postage stamp size yard to a yard with acreage.
Consider your preferred location(s) first – then you can concentrate on the amenities.
Before you sign anything, read about these common mistakes that home sellers make: 1. PRICING TOO HIGH: It's no secret, price is everything. Overpricing does more to discourage buyers than any other single factor. When you overprice, you put your home in competition with homes that may be newer, larger or have more amenities than yours. You help your competition sell their home. This leads to long days on the market, and costs you, the seller, money in the long run. Make sure you get your pricing advice from a professional agent who knows the market. 2. POOR CONDITION: A home that is in ill repair, or otherwise poor condition, does not excite buyers. A home like this is looked at by buyers as a work project and money pit. Having your home in good repair and great showing condition will significantly improve your chances for a sale at top dollar value. Having your home pre-inspected by a termite and dry rot inspector will also have a positive impact on buyers. 3. POOR CURB APPEAL:Most buyers today want to drive by. If your home is an attractive drive-by, it will gain more attention and certainly more showings. Doing the little things to help your home's curb appeal will make a huge difference. 4. DREARY DARK HOMES DON'T SELL: Buyers like updated, light and bright homes. Dark carpets, paint, and curtains are often buyer turn-offs. Go through your home and remove clutter; touch up and update paint, counter tops, and carpets. Open your home up and make sure the sun shines in. Offensive odors from pets and smoking are also huge turn-offs to most buyers. Rid your home of offensive smells by burning scented candles and create a pleasant aroma. The most important rooms to concentrate on are the living room, family room, kitchen and master bedroom. Your entire home's atmosphere is set off by these rooms. 5. DON'T OVER-IMPROVE: Get your home in good showing condition, but don't over do it. Huge projects such as complete remodels of kitchens, adding decks, and expanding room sizes may not pay back your investment. Before you jump into a huge improvement project, get some good advice. 6. BE FINANCEABLE: Bad roofs, exterior paint, or structural problems may make your home un-financeable. The wider the scope of financing that your home can qualify for, the higher the overall market value. Remember -- government programs like VA and FHA will be the most picky. 7. GET GOOD ADVICE AND GOOD MARKET EXPOSURE: Hiring a professional agent will help you get your home priced right, and will also get you started with the best fix ups. A strong agent will get your home exposed to the largest number of potential buyers. Paying the agent fee is often the least expensive part of selling your home. Trying to sell your home yourself can be costly. Most 'for sale by owner' homes close for less than comparable homes listed with an agent, and you have no representation. 8. DON'T BE PRESENT DURING SHOWINGS: When your home is being shown, go for a drive or a walk. Take yourself, your family, and pets and let the agent and their clients have the freedom they need. An agent can always do their best job of showing your home when you are not underfoot. Buyers are more at ease and much more likely to spend time looking at your home's features and benefits. 9. LET YOUR AGENT DO THE NEGOTIATING: If there is ever a good reason to have a veteran agent working for you, it's during the negotiation of your home sale. A good negotiator can mean thousands of dollars to you, and will protect your interests. Don't let your emotions run wild during negotiations. Try to separate your emotions from your business side. Remain cool and calm during this time. 10. ACT FAST WITH OFFERS: When you do get an offer on your home, act quickly and decisively. Letting offers sit around without acting can be a huge mistake. Things can change quickly in the mind of a prospective buyer. Acting quickly while the excitement and interest level are at a high point can be very important. Typically, a buyer's motivation level decreases with time. Buyers' remorse can even set in. Acting in a timely manner is essential. |
Wildewood Community, California - Announcing a rent/lease reduction on 44575 Spinnaker Way, a 2,868 sq. ft., 4 bath, 4 bdrm 2 story. Now MLS® $1,600 Monthly - Great Value!.
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The final stimulus bill passed yesterday includes a tax credit of up to $8,000...
2009 Homebuyer Tax Credit
- Must buy a primary residence home between January 1, 2009 through December 31, 2009
- Must owner occupy the home for 3 years otherwise credit must be paid back
- Income must be less than $75,000 for individuals ($150,000 for couples)
- Cannot have owned a home for the past three years
- Tax credit is 10% of homes sale price up to $8,000 maximum credit
- Tax credit claimed on 2009 tax return (year home purchase occurred)