Real Estate: New FHA program offers relief for underwater homeowners

Three and a half years ago, Sara Timmons and her husband bought a new house in Sparks that she thought would be the family's permanent home.

But it has lost nearly $100,000 in value and, though they are current on their payments, the monthly mortgage combined with other expenses is a struggle.

"We don't want to move out of our home," she said. "We bought a home to live in, not to invest in. But it's hard to enjoy that when you're always stressing about the money you're putting into it."

Timmons worries her dream of homeownership might be in jeopardy. The 29-year-old is not alone.

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FHA VS CONVENTIONAL LOAN

FHA PROS AND CONS

FHA Loans Popular Despite Rising Costs, Rates Low

(FreeRateUpdate.com) – Since the housing bust that began in 2007, FHA loans have continued to dominate the mortgage market. Looking back to pre 2007, the FHA (Federal Housing Administration) was attracting very little mortgage business when sub-prime lending entered the market and took over potential FHA borrowers. Today, with sub-prime a mere memory of the past, FHA loans, offering rates that are low, are again popular despite rising costs.

With more credit restrictions and tougher underwriting guidelines issued for Fannie Mae and Freddie Mac loans, FHA’s presence in the mortgage industry has soared. At the same time, due to their popularity, their risks have also increased which has forced them to increase their fees. In order to rebuild their reserves at a faster pace, FHA had already increased the upfront mortgage insurance premium to 2.25%. As of October 4th, the UFMIP will decrease to 1%, but the monthly mortgage insurance premium will be increased from .50% to .85% for a mortgage with an LTV up to and including 95% and up to .90% for a mortgage with an LTV above 95%.

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FHA VS CONVENTIONAL LOAN
CONVENTIONAL: ADVANTAGES AND DISADVANTAGES

HECM Saver: The Impact of FHA’s New Reverse Mortgage Program

The Department of Housing and Urban Development is expected to roll out the HECM Saver in the coming weeks, no one knows what sort of impact the HECM Saver will have on the marketplace.

Designed to address one of the biggest complaints of reverse mortgages, the HECM Saver offers borrowers less money at a lower cost.

When it’s rolled out, the product will reportedly have a 0.01% upfront mortgage insurance premium and 1.25% annual MIP. Much lower than the 2% upfront MIP and 1.25% annual MIP charged to HECM Standard borrowers. In theory, lowering the upfront costs should expand the number of reverse mortgages borrowers, but the industry isn’t so sure.

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FHA VS CONVENTIONAL LOAN

CONVENTIONAL: ADVANTAGES AND DISADVANTAGES

FHA Mortgage Refinancing Program

A new government program got underway this week, that could help homeowners who feel they're drowning in their mortgage to come up for air. It's called the FHA Short Refinance Option, and it allows borrowers who owe more on their home than the home is worth to refinance into a government-backed FHA Loan.

Nicolas Retsinas, a Senior Lecturer in Real Estate at the Harvard Business School, explains.

Retsinas predicts the program won't prevent all foreclosures, and certainly won't turn around the housing market by itself, but it can't hurt.

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FHA VS CONVENTIONAL LOAN

REMOVAL OF MIP FROM FHA LOANS

Mortgage Rates 9/5: Mortgage Rates May Tick Up Tuesday

September 5, 2010 (FreeRateUpdate.com) – Mortgage rates may tick up Tuesday following Friday’s decline in mortgage-backed securities prices -10/32 (FNMA 30-yr 4.0 at 102.24), which move mortgage rates in the opposite direction. Further deterioration of MBS prices is what could drive current mortgage rates higher.

Current 30-year fixed mortgage rates are at 4% for now for well-qualified consumers who pay a standard .07 to 1 point origination. Current 15-year fixed mortgage rates are at 3.625%. Both fixed mortgage interest rates today are at all-time record lows.

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FHA VS CONVENTIONAL LOAN

VA LOAN ADVANTAGES AND DISADVANTAGES

Mortgage Rates & Trends: Mortgage Blog

Total Mortgage currently offers one of the lowest FHA mortgage rates in Connecticut. At Total Mortgage a 30 year fixed FHA loan is available at 4.000% rate with 5.178% APR. FHA mortgages have become more and more popular over the last four years, and now is a great time to take advantage of record low mortgages rates whether you are a first-time home-buyer or if you are refinancing your current mortgage.

A fixed FHA mortgage loan is similar to a fixed conventional mortgage loan in that the interest rate remains the same for the life of the loan. There are several benefits to FHA mortgages compared to traditional mortgages. Down payments can be as low as 3.5 percent. Additionally, credit requirements for FHA mortgages are often not as stringent for standard mortgages because they are insured by the FHA. One of the downsides is that FHA mortgages cost more than traditional mortgages because the borrower needs to pay for mortgage insurance.

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FHA VS CONVENTIONAL LOAN
ARE YOU LOOKING TO REFINANCE?

Underwater Mortgage Refinancing Brings More Affordable Payments On Home Loans

Underwater mortgage refinancing opportunities may allow homeowners who have seen their home’s value drop obtain a more affordable payment on their mortgage. Home loan repayments for homeowners who have an underwater mortgage have become difficult in some cases so certain refinancing opportunities have been made available or are set to be begin in the near future.

For some, the Home Affordable Refinancing Program may help them obtain a more affordable underwater home loan payment thanks to the Obama Administration’s Making Home Affordable Program. The Refinancing Program, which is an extension of the Home Affordable Program, may help homeowners by allowing them to refinance their underwater mortgage to take advantage of a lower mortgage rate.

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FHA VS CONVENTIONAL LOAN

REMOVAL OF MIP FROM FHA LOANS

FHA delays implementation of mortgage insurance premium structure until Oct. 4th

The Federal Housing Administration (FHA) has announced that it is postponing implementation of its premium changes until Monday, Oct. 4. Originally, it was announced by FHA Commissioner David H. Stevens that a target date of Tuesday, Sept. 7 had been set for implementation of its premium changes. FHA will lower its upfront premium simultaneously with the increase to the annual premium. FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years.

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Fha vs Conventional Loan
Conventional: Advantages and Disadvantages

5 New Barriers To Getting A Mortgage

Are you having trouble getting approved for a mortgage? Ever since the housing bubble burst, lenders have been subjecting mortgage and refinance applicants to stricter and stricter criteria. Here are five reasons why people are finding it more difficult to get approved these days.

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VA Loan Advantages and Disadvantages

Mortgage rates expected to remain unpredictable

Mortgage rates will remain stubbornly unpredictable, and jumbo mortgages will be easier to get as summer fades and fall begins.

Those are two of five projected trends in mortgages and real estate over the next quarter, according to mortgage professionals.

After a lackluster summer selling season, Bankrate asked several mortgage pros to look into their crystal balls and forecast whether things will improve during the next three months. Here are their predictions.

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House Passes Bill Giving FHA Ability to Raise Insurance Premiums

The House passed legislation to give the Federal Housing Administration (FHA) flexibility to raise mortgage insurance premiums on the loans it guarantees on Friday.

In July, the House passed a broader bill doing the same but it remains stalled in the Senate. The bill passed on Friday is a much narrower version and has a better chance to move quickly through the Senate. Read More...

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Fha Vs Conventional loan

Conventional Pros and Cons

Former FHA official predicts ‘pivotal’ year for reverse mortgages

Former Federal Housing Administration Commissioner Brian Montgomery, who oversaw the nation’s most popular reverse mortgage product for nearly five years, sees a “pivotal” year ahead for the industry that allows seniors to tap the equity in their homes.

”This is a service that helps solve a social need,” said Montgomery, now a partner in a Washington, D.C.-based consulting firm. “Because of cash shortfalls in the program, the amount seniors can borrow will be reduced for the second time. In the big picture, the number we’re talking about amounts to a rounding error in the federal budget.” Read the entire story

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Fha Conventional Comparison

Home Loan Money Saver

Allied mortgage company survives despite repeated sanctions

By Charles Ornstein and Tracy Weber,ProPublica

As his competitors imploded one by one, Jim Hodge, the folksy founder of Allied Home Mortgage Capital, touted his sprawling Houston firm as a survivor.

Not only was Allied still standing, Hodge told employees in a company newsletter in December, it was thriving. "The good news," Hodge wrote, "is that even though we are all having to work harder, most branches are making lots of money." Read More

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Amortization Money Saver

The FHA 203(k) Loan: A home repair loan and mortgage all in one

Are you interested in buying a fixer-upper, but don't have the cash to remodel it? Or maybe you have saved money for remodeling and you've found a house you love, but your lender won't allow you to buy it because the house isn't considered habitable without toilets.

There are always properties on the market that weren't maintained by cash-strapped former owners, were treated poorly by renters or were deliberately trashed by formers owners before they lost their home to foreclosure. Shouldn't there be a way for someone like you to fix up these neighborhood eyesores and bring them back to life? Read More...

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FHA Guide

Amortization Guide