FHA Is True to its Word

Earlier this week, we wrote a post, in part, on the FHA’s plan to crack down on unscrupulous lenders. You can read the post here. 

According to an article published in The Wall Street Journal on Tuesday, the FHA is making good on its promise. It suspended Home Mortgage Inc. for six months and pulled the licenses of three other lenders, Strategic Mortgage Corp., ProMortgage Inc., and Americare Investment Group Inc. The FHA said that Strategic Mortgage Corp. and ProMortgage did not uphold the FHA’s loan standards, Americare violated previous settlement terms, and Home Mortgage was suspended for failing to disclose an owner’s indictment. You can read the full article here.

Present Value is an FHA certified appraisal company. 

By: Present Value

Tags: FHA Loans
Posted in FHA Loans, Real Estate Appraisal | No Comments »

FHA Changes the Rules

On January 20, 2010, the Federal Housing Administration – a government insurance company that backs mortgages and refinance loans for lenders that follow its guidelines – changed the rules for home borrowers.

Starting in the spring, borrowers will have to pay more up front to get a loan. The FHA is raising its upfront mortgage insurance premium from 1.75% to 2.25% of the loan amount. (Homebuyers pay for FHA insurance in two ways: through a one-time upfront premium and through monthly insurance payments.) At the same time, the FHA will ask Congress to raise the limit on the amount it can charge for annual premiums.

While tightening requirements for buyers, the FHA is cracking down on unscrupulous lenders responsible for the agency’s growing defaults and shrinking reserves. Officials at the agency – which is growing to become the lender of choice for buyers without perfect credit or those who can’t amass a 20% down payment – feel the changes are necessary because loan defaults have shrunk the FHA’s reserves below required levels. The problem would right itself by 2013 without intervention, but the proposed changes should bring the reserves back in line in the next fiscal year.

To read our previous blogs about the FHA and FHA changes, click here, here, or here.

By: Present Value

Tags: changes, federal housing administration, FHA, rules
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FHA Loans

In March, we wrote a post that, in part, discussed what distinguishes an appraisal for a Federal Housing Administration (FHA)-insured loan from an appraisal for a conventional loan and explained that the appraisers at Present Value are certified to conduct appraisals for both types of loans. Click here to read the full post.

This week, The New York Times published an article discussing the effect that FHA loans currently are having on home sales. The article says that three years ago, FHA-insured loans made up 2% of the market and now, 25% of the market is backed by FHA-insured loans. That’s a huge jump in a very short amount of time. Clearly, the FHA’s plan to help potential buyers secure financing is working.   

Traditionally, FHA-insured loans were obtained by people with less-than-perfect credit scores. Banks were more comfortable lending to riskier borrowers if the loans were insured by the government because the bank would be protected from a loss should the borrower default on the loan. But because financing is so difficult to secure right now, people who would have gone after a conventional loan in the past now have to look into FHA-insured loans to receive the financing required to own a home. To read the full article and see how this trend is affecting New Yorkers, click here.

By: Present Value

Tags: FHA appraisals, FHA Loans
Posted in FHA Loans | 12 Comments »