FHA first shared these changes on August 4th, after it had been approved by Congress and then the President signed off on it on August 11th. FHA has finally come out with the mortgagee letter, ML 2010-28, which puts it officially in writing now.

This mortgagee letter is effective on FHA loans in which the case number is assigned on or after October 4th, 2010. This policy will increase the monthly mortgage insurance and decrease the mortgage insurance premiums for purchase money and refinance transactions, to include FHA streamline refinances.

 

 

 

So what are the major FHA changes regarding mortgagee letter 2010-28? - For terms greater than 15 years -

• LTV's <= 95% will increase the monthly fee to 85 bps  >> Old monthly fee was .50 bps
  

• LTV's >   95% will increase the monthly fee to 90 bps  >> Old monthly fee was .55 bps 

 

And lastly, it will reduce the Upfront Mortgage Insurance Premium, UFMIP, from 225 basis points to 100 basis points.

 

 

How will this affect new homebuyers?

3 quick examples (these examples are putting the minimum down payment of 3.5%)

• On a $275,000 mortgage – the change in payment would be about $70 higher a month

• On a $200,000 mortgage – the change in payment would be about $45 higher a month

• On a $125,000 mortgage – the change in payment would be about $27 higher a month

 

Buyers Beware - If you have your eye set on a specific home, or are negotiating on a property, or are very serious about buying soon, you will have 31 days to make a mortgage application before these new changes take place.

 

These 2 posts I wrote previously below go into more details about the changes and showing more detailed figures.

 

• Bill H.R. 5981 passes - FHA Mortgages to increase it's annual mortgage insurance premium

• STOP TAXATION? - The new changes for FHA loans are being called : The New Homebuyer Tax

 

 

 

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

 

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

Tip of the Week: How to Freshen a Stinky Dishwasher. If you have a dishwasher that is getting a little sniffy or is showing some staining, pick yourself up a few packets of Kool-Aid brand unsweetened lemonade (I’m not trying to plug the brand here, but I have found that their packet recipe works better than the others). What you need to do is empty a packet into the soap dispenser; if you’re one of the lucky ones and your dishwasher has the little supplemental dispenser, put some in there as well. Now run the EMPTY dishwasher through a full cycle and you should be amazed. The result? Clean and lemony!

Posted By: Chrissy Doremus, U.S. Inspect Blog

A DECADE OF DAMAGE- ITS YOUR CREDIT, WHICH IS BETTER A SHORT SALE OR A FORECLOSURE?

Homeowners struggling to make their mortgage payments experience a wide range of emotions. This is a horribly stressful time. An unexpected illness, loss of a job, reduction of income, or a divorce are all financially life changing situations which are hardships.  Add to that the constant bill collector calls, and having to make difficult decisions of which bills can be paid and when, can make thinking clearly even more difficult.  

Compassion does not come easily for lenders attempting to collect on bad debt. The downturn in the housing market, home deflation, and foreclosures at historic high rates mean distressed homeowners are not alone. There are literally millions of them and more coming int he near future.

So which is better a short sale or a foreclosure?

A foreclosure will cause a decade if damage to your credit report. Which for a younger home owners may not be catastrophic but for a mature homeowner could be disastrous.  A short sale is an agreement between borrower and lender to settle the debt for less than is owed. It is a negotiation.  It will reduce your credit score for 12 to 18 months, but not decimate it.

Frustration leads to irrational acts.  So what are the alternatives?

You can "Let the bank have it"    

 

And take the hit on your credit for a decade.

Or

You can consider a Short Sale.   A short sale is a negotiation between the borrower and lender in which the lender may agree to accept less than is owed against the property it hold the mortgage lien against.

 

Consider the consequences.  Think long term.  A short sale may give you an opportunity to settle the debt sell the home and regroup.  There are consequences.  A lender can ask you to make a contribution to offset the loss (if your financial documents show you have the ability to do that), they may ask for a deficiency judgment, or they forgive the debt in areas very hard hit with high foreclosure rates. For 12-18 months there will be a drop in your credit score averaging about 50 points. You can be eligible for a loan provided you stay current on your other loan obligations in as little as two to three years.

In A foreclosure, the damage to your credit rating will leave a stain for ten years.  The damage to your credit score ranges from 250-300 points typically for three years. Making you ineligable for new loans from most lenders.

Before you just give up, talk to a professional.  As a Certified Short Sale Resource Specialist (SRF), and Certified Distressed Property Expert (CDPE) together we can work through your options and look for solutions which will help you the most in achieving your long term goals.  Foreclosure hurts. Frustration is understandable.  Make informed decisions.

St. Cloud Realtor Allison Stewart,                                                                                

Real Estate Broker,                                                                                                 

 Certified Short Sale Foreclosure Resources (SFR)

                                                                                                                                                                                                          Certified Distressed Property Expert (CDPE)

St. Cloud Homes & Land,LLC               www.floridahouseinfo.com                                                                                                          407-616-9904

 

Credit is one of THE MOST IMPORTANT ISSUES IN getting a loan today. 

Time and time again, I'm called by a client who says "I PAY MY BILLS ON TIME, BUT MY PEOPLE SAY MY CREDIT STINKS....

Maybe I'll just pay off my credit cards today.....

No, No, No, No Nooooooooooooo!!!!!!" 

Truthfully, there is more to a credit score than just making your payments on time or paying off your credit.  In fact paying off all your credit today could be a bad move.  Needless to say, I've broken this down so that the complexities of mortgage credit scoring can be understood by the consumer.  I reference this a lot when consulting clients.  With this information you can self-analyze your situation to make sure that you monitor your scores or raise your scores to where you want or need them.  In other words, this serves as a roadmap to building a good credit report.

 Here are all 5 factors in the order of importance:

 1)  Payment History has a 35% impact. Paying debt on time and in full has a positive impact, and late payments, judgments and charge-offs have a negative impact.

 2)  Outstanding Credit Balances have a 30% impact. Debt ratio of outstanding balance to available credit is important.  Keeping that below 50% is wise and below 30% even wiser. It is never a good idea to close an account; the debt ratio will go up and the number of seasoned lines will decrease. Pay outstanding debt down as close to zero as possible and evenly redistribute the remaining balance among the open lines. The increased interest incurred by moving a balance from a 0% card to a 23% card will be minimal relative to what the increased mortgage debt might be with a low credit score. Hitting the maximums of available credit can be very negative. It may be worth calling and asking the credit company to increase your available credit to lower the debt ratio, provided they can do so without a hard credit inquiry. 

 3) Credit History has a 15% impact. The length of time a particular credit line has been opened is important. A seasoned borrower is stronger. 

 4)  Type of Credit has a 10% impact. A mix of auto loans, credit cards and mortgages is positive, rather than a concentration in credit cards only. 

 5)  Inquiries have a 10% impact. Hard inquiries for credit will negatively impact the score. Auto and mortgage inquiries receive special treatment and 20 inquiries can be made in a 14-day period for auto or mortgage and will be treated as only 1 inquiry. The maximum number of inquiries that will reduce the score is 10. Any inquiries beyond that [11+] in a six -month period will have no further impact on the borrower. Each hard inquiry can cost 2-50 points on a credit score.

Make sense?  It does to me.  File this away in your back pocket.  Every time you want to save 10% on the flashing blue light special for signing up for a new card....well...you may be paying a lot more than that with all of your other credit if your scores drop. Know your facts, call me if you want to talk further on how this may affect you.

Larry Bettag - Regional Vice President, Midwest Region

Illinois FHA Specialist

630-417-7172

  

               

An Illinois Residential Mortgage Licensee

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It is probably true that on half the home inspections I do the filter is installed backwards.  It is important that the filter be installed the right way!  Why?  Because one side is stronger and meant to handle the air flow's pressure.  There is an arrow drawn on every filter to tell you the air flow direction.  Put in backwards, and as it gets loaded with dust, the filter can literally get sucked into the system and even cause damage to the fan.

Someone took the time to draw which way the filter should be installed.

That way, when it is put into the slot, you only have to put the arrow on the filter in the direction of the arrows drawn on the return duct.

What if the arrows are drawn wrong?

THESE ARROWS ARE POINTING IN THE WRONG DIRECTION!!

How do you know which way the air blows?

The air will always be drawn TOWARD the blower.  From the blower it gets heated in the furnace or cooled on the AC coils.

So the air-flow arrows on the filter should point TOWARD blower.

This unit is 5 years old.  It was filthy.  The ducts in the house were filthy.  Could it be the bad information on the arrows contributing to that?

My recommendation:  If you don't know which way the air is blowing, put a piece of toilet paper on the end of a pair of pliers and stick it into the slot.  See which way the paper is drawn.  That is your air flow direction!  Don't believe me?  Check it yourself.  AND THEN DRAW YOUR ARROWS THE RIGHT WAY!