I have been in the mortgage industry for 27 years and thought I’d seen it all! I can appreciate what HUD is trying to do but it’s costing or penalizing all of the new homebuyers, typically in their 20′s & 30′s! My question is who is responsible or accountable for all the MIP’s they have collected in the past years? Where did all that money go because I am sure that many homeowners did not apply or get their mip refunded for one reason or the other.! This is only adding on the costs of buying a home. If you add the upfront and monthly MI and times that by 30 years? Guess what?? So it is a catch 22 situation..They appear to help you on 1 end then they get you in the end for their incompetence or regulating the industry in the first place!!

It has always troubled me that the government is standing behind 97% loans with FHA and 100% loans with the USDA. The qualifying process has been more easily met by borrowers than with convential loans. As a result, a flood of new borrowers to these programs has begun. The fact that 30% of FHA loans are currently in default tells the real story. The economy is not yet stable enough to expect the FHA program to have lower default rates. However good a person’s job is when the qualify for a mortgage, when the lose it, it’s only a matter of time until they can no longer afford their mortgage payment.

The changes will hurt the programs numbers and I do not believe the lower number of new loans coming in will be sufficient to offset the new losses yet to com.

The reason FHA was started in the first place was to help home buyers with limited funds to be able to purchase a home. For many years they have collected the MIP and were the only profitable branch of the Government. Where did all those profits go?
Now is not the time to punish current buyers. Those people buying houses today, at the deflated prices, are much less likely to default than those that bought at inflated prices with ARMs and 0 down loans.

For every action, there is reaction…. for everyone. If we can review the why’s, which occur because it is an attempt to correct something…. evaluate, catch attention, take note…. Look at the Bigger Picture, into the Future and apply accordingly or adjust as needed.

The Movie we are creating is directed “in the moment”, their is no time for a dress rehearsal.

First Time homebuyers will be able to buy…who do you think will buy them once investors buy and fix up. There are several programs out there now, that provide purchase/rehab loans to owner occupied buyers. That’s a good thing for investors. Investors can buy, sale as is, or rehab and sale. The restrictions have to be loosen for the investors first.

The FHA was created to help low income people buy a home. They have made some changes for the better. Like raising the loan limits. Very good news for people here in New Jersey. The best news for investors is the lifting (for one year) of the 90 day holding restriction for resale. We should all take of advantage of this great new opportunity and welcome FHA buyers.
Ernie O., New Jersey

Close to 100% financing is never a good idea because there is a rental option if they cannot afford it. Many people I have helped with short sales were the ones with 100% financing. But not sure if the new FHA rules are the best solution. Yes, the best part of the new rule is to enable us to flip without 90 day holding period!

Is there any government entity that is actually interested in helping out the citizens it’s supposed to serve or just finding more ways to increase bureaucratic red tape? Pretty soon you won’t be able to sell or buy a home. I think someone needs to give the “American Dream” CPR.

Americans are being stiffled by more qualifications that are designed to pacify Politicians egos. We are really in for a major problem with Housing.
The people who are making these rules have never worked in the Mortgage business and don’t understand the basics about this business. FHA new rules are not what they think they’re caked up to be, requiring that a borrower put down more money is no guarantee that if they lose their job they are going to keep their home or prevent a foreclosure.
Yes, it will limit FHA exposer. so they say by 3.5%?
First,as an example consider a borrower that places 3.5% down on a $300k home. The borrower would need approx $10,500 that they would be required to take out of their reserves. Contrarily, if this money was left in their reserves on the other hand, their monthly payment not including taxes and insurances would be approx – $60-$75 per month more than, if they had put the 3.5% down. The down payment used to be 3% and some Politician perhaps a Lawyer needed a way to justify his fees and convince them to change it to 3.5%.
Consider this common sense observation. In the event of a job lost would a person having more money set aside in their checking or savings account be better off & able to make payments,budget and maintain a life style than having the 3.5% amt. tied up in equity?
Their chance of staying out of forclosure would be strongly enhanced by having reserves in place. Add a tax credit to this scenario and you have a more stable & happy capable Citizen of Amercica.
Secondly, doing away with Consessions upto 3% & seller paid down payment assistance is another joke in it’s self. If a seller is making less on a sale and donating the equity that would normally, go into their pocket. Where is the crime?

Ok, another business in America makes a little money in the process for adding a fee aka a down payment assistance program which employees x amt. of employees throughout America. ( Jobs ). If that’s such a crime just allow seller to pay it directly, out of closing proceeds no dpa company necessary.

Ironically, what would make even more sense and pacify all the so called statistics. Why not increase the down payment to 5% and let it be seller funded. Now, what’a the problem?
Now top that for a thought!

Oh, I forgot they have to have something in it.

Alternative keep renting with no benefits?
I guess they have to fill the renters void in America.
So they just come up with anything imaginable to address the problem whether it makes sense or not?

More dumb answers to the problem.
The so called Government State & City approved- down- payment assistance- programs charge almost 2-3 pts. more in interest rates to home buyers than if they went thru mortgage companies. How about a 8.75% rate on a FHA 30 yr, fixed vs. a mortgage company that earns a yield spread of 3 pts with a 5.25 % rate given to the buyer.
Opps, a mortgage company making a little money. I guess they better cut that out. Those mortgage people are crooks!

Wow, I wonder who in the hell has a greater chance for being a foreclosure candidate?
Who actually, did the buyer more justice? Go figure!

Interestingly, common sense would dictate changing the credit qualifications to say a 650 middle score and still allow Seller paid down payment assistance and allot FHA a bone to increase the MIP to 2.25%.

The monthly payment is no where near what a 2-3% higher rate would have been with the so called approved state & city sponsored down payment assistance programs .
They also, force the borrower to stay in their home for at least 5 years and not allowing them a chance to refinance as needed or to consolidate bills etc.
They honor the buyer by placing a soft second on the home and require that the borrower have to pay back the down payment if they have to move.as a penalty. Imagine simply getting a better job opportunity and needing to relocate. Perhaps, having to get a divorce and the house want sell. People are not allowed to even rent the homes out.
I have met several borrowers who were forced to try and sell their homes to no avail as their only option.
Due to the fabulous common sense guidelines & rules of the creators of all the so called State & City sponsored programs not allowing them a option to lease out their homes.
The borrowers were forced just to allow the homes to go into foreclosure. Even though, they had numerous people desperate to rent or buy on a lease purchase at the time they trying to sell the properties.Where are the statistics on this fact?

People who have maintained such basic scores over time have already proven their ability to manage their finances and maintain their credit to a repectful degree. Even though the credit reporting agencies have changed the scoring models.

People should not be forced to exhaust all of their funds in order to bail America out of a crisis. Let the sellers on the other hand give up a little to equity and move America along and keep the deals flowing.

When people are able to buy houses several hundred people are employed in various industries. It takes over 30 people employed in the mortgage business to put a deal together. We need these job opportunities in place.

Another dumb Idea is the 90 day seasoning on titles requirements. Perhaps, Politicians should be able to buy more houses and the requirements would definitely, change?

Too much, Government no common sense!

The housing industry is going to have a hard time recovering if people can’t afford to buy a house with the raise in the cost of up-front mortgage premiums and with seller concessions being cut to 3%. Sellers may have a hard or harder time selling their home because of these new rules. and they are try to regulate the amount of profit a investor can make. if we find a great deal with more than 20% profit why should we have to justify why it is on lower in homes

I would say FHA has made these changes on purpose because they no longer want to do 30% of the new loans. I remember a time in history where FHA was not the preferred loan of chose. These changes have been made to benefit them, not us.
Jamie L., South Carolina

Hi! Cory:

When I read the above information about the new FHA rulings I think of Dejavu of the years of 2004-2007 during the Sub-Prime Magic years.

It’s like feast or famine. before the FHA restrictions 1.5% premium, 3% down-payment, no credit score and grant down payment assistance programs like the Nehemiah program and others are all gone.

The good thing is the one year memorium on the 90 day restriction property holding period for investors and with the buyer’s new qualification standards will reduce the unlikely event of contracts falling through at the closing table.

The other good things is that the tree has been shaken and the rotten fruit has fallen out.

Although the new FHA policies and rules seems strengthen and more restrictive.

In the end we will be moving towards a future of quality not quantity and it will bring more integrity back to the industry.

Thanks for the opportunity to Express… Regards, Jerry P.

FHA is “Full of Hot Air”.

Its like the control freak person, who’s own life is, anything else but in control!
Dag nab it Government, if the legislature-law writers would stop employing themselves
by continuing to Write More Wrong Laws, and just let entrepreneurs like us continue cleaning up others, and their messes-
but this this wall they built, is to keep us out. Let’s sing your song:
FHA-”Can’tTouch That!”

I think that the fact that they have lowered the credit score requirement limit will be a huge help…8-% of the country has credit score issues..that is a big problem for lenders for Refinance so people will reach for that to stay out of foreclosure…however coupled with the 3.5% down pymt option that is very good and closing costs cut in half will certain be attractive and attainable for a lot of people n trouble right now…Having public access to lenders and their performance is always a key benefit.