My Mind on Mortgages

Two days ago HUD announced changes to the popular FHA loan program.  The changes are designed to “strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for undeserved communities.“
If you’ll recall last September FHA announced that their capital reserves (used to insure FHA mortgages) [...]

There are a few things to know about standard FHA loans.
*Minimum down payment requirement: Currently homebuyers who use FHA mortgage financing to buy a home can put as little as 3.5% down and borrow the remaining amount.
*Down payment may be gifted: FHA is one of the few programs that allows the entire down payment to [...]

By some estimates as many as 35-40% of homes sold in the Portland-Metro area thus far in 2009 have been bank-owned or short sales.  Often times these sales involve distressed property because the sellers lack financial motivation to provide basic maintenance to the home.
Looking ahead I don’t expect this pattern to change as we head [...]

I was recently asked by a real estate professional about FHA’s anti-flipping rule.  Since I did some digging on the subject I thought I would post what I found because I suspect many others are coming across similar circumstances.
What is the anti-flipping rule?
It prevents homebuyers from obtaining FHA financing when they write an offer to [...]

The Washington Post published this article stating that FHA is expected to announce changes to the popular FHA loan program tomorrow in an effort to shore up the agencies finances.  The objective of the changes is designed to have homebuyers put more “skin in the game” so that walking away from their home is less [...]

Wells Fargo announced a key change to their underwriting guidelines today.  The reason I am blogging about them is because a) they are fairly big changes & b) Wells Fargo tends to be a bellwether for our industry.  Therefore, if Wells Fargo is announcing this today it won’t surprise us to see others following suit [...]

For all the benefits of FHA loans (i.e. low interest rates, low down payment requirements, assumability) there are also drawbacks (i.e. extensive paperwork requirements, upfront mortgage insurance premiums, etc.).
When it comes to refinancing an existing FHA mortgage homeowners need to be aware that one of the drawbacks is that FHA loans require a full 30-day [...]

As a supplement to this post and this post, WSJ.com published this article a few minutes ago in which they report that the FHA will tighten credit standards in order to improve it’s mortgage insurance performance.  No details on when these new rules will become effective.  Here is a quote from the article in which [...]

Last week I had blogged this post regarding mounting losses at FHA.  Today, WSJ.com had a follow up with this article.  The bad news is that the FHA reserves level will drop below congressional mandated levels.  The good news is that the FHA has forecasted out 2 years from now and is projecting those reserves [...]

By most estimates FHA loan originations now make up somewhere between 33-50% of all mortgage fundings.  One of the nice flexibilities about FHA loans is that it allows the borrower/ homebuyer to receive their down payment (minimum of 3.5%) entirely as a gift from a family member.
With the first-time homebuyer credit in effect we have [...]