FHA Mortgage Rates Low and Jumbo Rates High
Filed under FHA Videos, FHA news, Mortgage News · Tagged: FHA mortgage, FHA mortgages, jumbo mortgage rates, refinance
New homebuyers benefit greatly because these FHA mortgage loans maintain low rates and HUD’s flexible credit guidelines ensure that fico scores are not the driving factor for approval like how conventional underwriting guidelines use for approving refinance or purchase loans. FHA mortgages are more aggressive with less equity needed for home refinancing and less needed for depositing with traditional home financing.
CBS News’s Kelly Wallace reports that FHA rates and conforming interest rates have dropped significantly, but jumbo mortgage rates remain high, because lenders don’t want to offer low rate incentives for these high risk mortgages that many borrowers in high cost areas find themselves stuck in.
FHA Mortgage Protects Fee Compliance
Filed under FHA news, Mortgage News · Tagged: FHA loan, FHA mortgage
California based mortgage mitigation company called Interthinx recently extended their regulatory compliance services in an effort to provide added value services to help underwrite and balance FHA mortgage originations. They have introduced their automated solutions for the mortgage industry with a product to help FHA lenders comply with the HUD’s fee limitations on FHA loan programs.
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The Department of Housing and Urban Development maintains a strict enforcement of fair lending practices that encourage full disclosures to borrowers considering a FHA home loan with a mortgage broker or lender providing a refinance or purchase loan transaction. PredProtect, an 8-year old home financing compliance product, now has an automated analysis designed to aid lending companies with risk management.
California Leads FHA Mortgage Lending Volumes by State
Filed under FHA news, Mortgage News, Published Articles · Tagged: FHA mortgage
Once again, California ranked 1st in nearly every home loan category of FHA mortgage lending as 2008 finished out. According to a source regarding the FHA Lending analysis of state lending data, California leads the way for market share of FHA loans all-time high. The FHA mortgage surge significantly in the second half of the year appeared to take significant business from Fannie Mae and Freddie Mac in numerous states.
In an effort to keep foreclosure rates down, many FHA mortgage lenders recently began imposing their own minimum credit score requirements.
Filed under FHA news, Mortgage News, Published Articles · Tagged: FHA loan guidelines, FHA mortgage, income documentation
In an effort to keep foreclosure rates down, many FHA mortgage lenders recently began imposing their own minimum credit score requirements. These are additional lending requirements that go beyond the scope of FHA loan guidelines. Mortgage lenders continue to require more income documentation to help prove that borrowers have the ability to repay the loan.
Clearly, they’re trying to protect themselves: if a particular mortgage broker or lender’s default rate exceeds neighboring lenders, they can be audited and even removed from the program.“In the last month and a half, there has been a dramatic increase in the minimum credit score required,” said Michael Moskowitz, president of Equity Now, a New York FHA mortgage lending that makes FHA home mortgages. “Some lenders increased their credit score minimums to 580 and other lenders raised the minimum requirements up to 620.”
FHA Cashout Refinance Banks Restricted by Tighter Lending
Filed under FHA news, Mortgage News · Tagged: cash out, FHA loans, FHA mortgage, FHA refinance
FHA mortgage loans are becoming tougher to qualify for. As of January 1, 2009 HUD announced that any FHA cash out refinance would require two appraisals when the loan to value exceeds 85%. Since the customer usually has to pay for the appraisal, this adds around $350 to the cost of refinancing with the FHA. In addition, many underwriters are taking a very close look at appraised values, due to the continuing drop in home prices. In turn, the close scrutiny of appraised values by the underwriters are making many appraisers more conservative in the values that they assign to a home. The FHA also raised the down payment requirement on purchases to 3.5% and increased mortgage insurance premiums. The net result is that an FHA mortgage not only has higher costs but also a higher probability of being turned down due to insufficient equity and more stringent underwriting guidelines.
Some Banks Reduce Cash Out Limits for FHA Mortgage Refinancing
Two smaller banks today have reduced the cash out limits on FHA home loans to 85% loan to value, despite the FHA guideline allowing 95% cash out. Rumor has it that larger banks will also follow through on lowering the loan to value limits on FHA cash out refinancing. Tougher guidelines quickly spread industry wide, so expect many more lenders to make it more difficult to cash out on an FHA refinance.
Since FHA loans have a very high default rate (roughly 12%), it is only logical that banks are imposing tougher guidelines for borrowers. The banks simply cannot afford to take on additional default risk given their weak financial position. Many potential borrowers will continue to find it difficult to obtain mortgage approval until the economy recovers and the housing markets stabilize. Based on the way things are going, it could be a long wait.
