FHA loan cost is going up on Sept 7th, 2010, unless you have an accepted contract by this date and your lender has a case number. (Case numbers can only be obtained if there is an address.)
Monthly mortgage insurance will increase from .50% to .90% for loans over 15 year term. (Despite the new ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.)
In everyday terms, assuming a $200,000 mortgage, the math to a homeowner looks as follows:
* Current Premium (0.55%) : $91.67 monthly mortgage insurance premium
* Expected Increase (0.90%) : $150.00 monthly mortgage insurance premium
* Maximum Increase (1.55%) : $258.33 monthly mortgage insurance premium
The news is not all terrible, however.
FHA has also said it plans to reduce its upfront mortgage insurance premium paid at closing from 2.25 percent down to 1.000 percent.
On the same $200,000 mortgage, that would reduces closing costs by $2,500.
However, the potential for reduced seller paid closing costs from a maximum of 6% down to 3% will mean higher entry cost and higher monthly payments for minimum down buyers.
The California Tax Credit Application Deadline is August 15,2010. Funds are limited, and not all applicants will be accepted.
All in all, several compelling reasons for minimum down homebuyers to get into contract now!
Wednesday, August 11, 2010
Sunday, August 8, 2010
Home Affordable Foreclosure Alternatives Program Update
The Home Affordable Foreclosure Alternatives (HAFA) Program, a part of the HAMP program, provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or deed-in-lieu.
HAFA has been revised effective April 5th, 2010 in Supplemental Directive 09-09, replacing original Supplemental Directive 09-01.
In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer - provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation. A loan must be HAMP eligible and meet other requirements to be eligible for incentive compensation. Among the requirements: The property must be borrower's principal residence and the loan was originated on or before January 1,2009. The program sunsets December 31, 2012.
The borrower may receive a one-time payment of $3,000 in the month the Short Sale/DIL Loan Set Up transaction is received after the closing has occurred.
The guidelines for HAFA are detailed further in the documents found here:
https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html
https://www.hmpadmin.com/portal/docs/hafa/sd0909r.pdf
HAFA has been revised effective April 5th, 2010 in Supplemental Directive 09-09, replacing original Supplemental Directive 09-01.
In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer - provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation. A loan must be HAMP eligible and meet other requirements to be eligible for incentive compensation. Among the requirements: The property must be borrower's principal residence and the loan was originated on or before January 1,2009. The program sunsets December 31, 2012.
The borrower may receive a one-time payment of $3,000 in the month the Short Sale/DIL Loan Set Up transaction is received after the closing has occurred.
The guidelines for HAFA are detailed further in the documents found here:
https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html
https://www.hmpadmin.com/portal/docs/hafa/sd0909r.pdf
Monday, August 2, 2010
USDA Rural Housing Bill Passes
One government housing program that had run out of funds months ago was revived by Congress yesterday.
The Senate yesterday passed HR 4899 to reestablish the popular U.S. Department of Agriculture Single-Family Housing Guaranteed Loan Program (Section 502 Housing) as a self-sustaining program.
The Rural Housing program had run through its $13.1 billion funding by early this year and many buyers hoping to finance home purchases using Homebuyer Tax Credits were unable to close their loans. Depleted funding has been a nearly annual occurrence for the program that guarantees loans for single family homes in designated exurban and rural areas. The new legislation will end the annual uncertainty by putting the program on a self-funding basis through enacting a 3.5 percent guarantee fee paid by the borrower. The fee, while substantial, can be included in the total amount financed.
Senator Michael Bennet released the following statement, "The Rural Housing Preservation and Stabilization Act increases the maximum loan guarantee fee that USDA's Rural Housing Service has authority to charge for new housing purchases from 2.0 to 3.5 percent and allows an annual fee of not more than 0.5 percent per year on the balance of the loan. The bill would also enable the Rural Housing Service to waive these fees for low-income borrowers for up to $679 million in loans. Together, these changes will enable the USDA-Rural Development's Rural Housing Service to continue offering loan guarantees through the duration of the year and to become self-funding."
Despite the low down payment required to participate in the program, it is generally considered to be a good risk by lenders because of the 90 percent government guarantee and because the loan size is limited to 115 percent of the area's median income. This keeps the loans small; the average loan size is $112,000. Last year the foreclosure rate for these USDA loans was a reported 1.72 percent compared to 3.32 percent for Federal Housing Administration loans.
The bill now goes to President Obama for signature. As we went to press, USDA had not commented on the action and we are still waiting for guidance from lenders.
Source: Jann Swanson on July 30, 2010, MND Newswire
The Senate yesterday passed HR 4899 to reestablish the popular U.S. Department of Agriculture Single-Family Housing Guaranteed Loan Program (Section 502 Housing) as a self-sustaining program.
The Rural Housing program had run through its $13.1 billion funding by early this year and many buyers hoping to finance home purchases using Homebuyer Tax Credits were unable to close their loans. Depleted funding has been a nearly annual occurrence for the program that guarantees loans for single family homes in designated exurban and rural areas. The new legislation will end the annual uncertainty by putting the program on a self-funding basis through enacting a 3.5 percent guarantee fee paid by the borrower. The fee, while substantial, can be included in the total amount financed.
Senator Michael Bennet released the following statement, "The Rural Housing Preservation and Stabilization Act increases the maximum loan guarantee fee that USDA's Rural Housing Service has authority to charge for new housing purchases from 2.0 to 3.5 percent and allows an annual fee of not more than 0.5 percent per year on the balance of the loan. The bill would also enable the Rural Housing Service to waive these fees for low-income borrowers for up to $679 million in loans. Together, these changes will enable the USDA-Rural Development's Rural Housing Service to continue offering loan guarantees through the duration of the year and to become self-funding."
Despite the low down payment required to participate in the program, it is generally considered to be a good risk by lenders because of the 90 percent government guarantee and because the loan size is limited to 115 percent of the area's median income. This keeps the loans small; the average loan size is $112,000. Last year the foreclosure rate for these USDA loans was a reported 1.72 percent compared to 3.32 percent for Federal Housing Administration loans.
The bill now goes to President Obama for signature. As we went to press, USDA had not commented on the action and we are still waiting for guidance from lenders.
Source: Jann Swanson on July 30, 2010, MND Newswire
Wednesday, July 21, 2010
VA Loan Limits California Counties
County Limit
Alameda $962,500
Contra Costa $962,500
El Dorado $418,750
Los Angeles $593,750
Marin $962,500
Mono $512,500
Napa $443,750
Nevada $418,750
Orange $593,750
Placer $418,750
Sacramento $418,750
San Benito $633,750
San Diego $437,500
San Francisco $962,500
San Luis Obispo $487,500
San Mateo $962,500
Santa Clara $633,750
Santa Cruz $568,750
Ventura $486,250
Yolo $418,750
Alameda $962,500
Contra Costa $962,500
El Dorado $418,750
Los Angeles $593,750
Marin $962,500
Mono $512,500
Napa $443,750
Nevada $418,750
Orange $593,750
Placer $418,750
Sacramento $418,750
San Benito $633,750
San Diego $437,500
San Francisco $962,500
San Luis Obispo $487,500
San Mateo $962,500
Santa Clara $633,750
Santa Cruz $568,750
Ventura $486,250
Yolo $418,750
Friday, June 4, 2010
First Time Homebuyer Tax Credit: How Long Will Funds Last?
These estimates give a general idea of the number of applications received and the amount requested for the First-Time Buyer Credit. 57% of the estimated requested credit is shown since the $100 million cap will only be reduced by 57% of the credit allocated to the buyer. The amounts do not reflect actual amounts which will be allocated. Once the state determines that they have received sufficient applications to allocate the full $100 million, they will stop accepting applications for the First-Time Buyer Credit. There is also a separate "New Home" Credit.
First-Time Buyer Credit Applications
As of # Apps Received 57% of Estimated Requested Credit
05/04/10 430 $ 2,351,000
05/11/10 2,470 $ 13,283,000
05/18/10 4,830 $ 25,473,000
05/25/10 7,330 $ 38,357,000
06/01/10 9,760 $ 50,948,000
Applications are quickly absorbing available funds.
At this rate, I don't expect the credit to last much past July 2010.
First-Time Buyer Credit Applications
As of # Apps Received 57% of Estimated Requested Credit
05/04/10 430 $ 2,351,000
05/11/10 2,470 $ 13,283,000
05/18/10 4,830 $ 25,473,000
05/25/10 7,330 $ 38,357,000
06/01/10 9,760 $ 50,948,000
Applications are quickly absorbing available funds.
At this rate, I don't expect the credit to last much past July 2010.
Housing Prices Improve 6.8%
House prices rose 6.8% in May 2010 from last year. A report from real estate data provider Clear Capital states that this is the largest yearly increase since July 2006.
Last year Clear Capital reported a 19.3% drop in May house prices from the previous year.
"We continue to see sustained price growth throughout much of the country with yearly price gains reflecting the housing recovery off of last year's lows," said Alex Villacorta, senior statistician at Clear Capital. "The expiration of the tax credit at the end of April has certainly contributed to the growth of prices we are observing and as more sales close before the June 30 deadline we expect that markets across the country will continue to see strengthening of prices."
The amount of REO properties on the market appears to be declining, too, according to Clear Capital. The national REO saturation rate dropped 27.8%, down from 41.7% last year.
"This dramatic shift in price trends reflects the unprecedented volatility over the last couple of years and the delicate state of local real estate markets around the country," Villacorta said.
Last year Clear Capital reported a 19.3% drop in May house prices from the previous year.
"We continue to see sustained price growth throughout much of the country with yearly price gains reflecting the housing recovery off of last year's lows," said Alex Villacorta, senior statistician at Clear Capital. "The expiration of the tax credit at the end of April has certainly contributed to the growth of prices we are observing and as more sales close before the June 30 deadline we expect that markets across the country will continue to see strengthening of prices."
The amount of REO properties on the market appears to be declining, too, according to Clear Capital. The national REO saturation rate dropped 27.8%, down from 41.7% last year.
"This dramatic shift in price trends reflects the unprecedented volatility over the last couple of years and the delicate state of local real estate markets around the country," Villacorta said.
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