Posts Tagged ‘fha lenders’

FHA Prepares Own QM Ticket

March 8th, 2013 Comments off

The American Banker informs MHProNews the Federal Housing Administration (FHA) is issuing its own QM rule because the Consumer Financial Protection Bureau (CFPB)’s may conflict with the FHA’s Single-Family Program. HUD spokesman Brian Sullivan states FHA has the authority under Dodd-Frank to create its own ability-to-repay rule, and will be issuing it soon. Brian Collins of American Banker says, “FHA lenders are already concerned about the CFPB QM rule because of certain changes to FHA mortgage insurance policies that will be going into effect soon. On April 1, 2013 FHA will raise its annual premium by ten basis points. On a standard FHA loan, new borrowers will pay a 135-basis-point annual premium and a 175-basis-point upfront fee.”

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Reverse Mortgages Need an About-face

December 27th, 2012 Comments off

As a result of the housing downturn and the slow economic recovery, more seniors have turned to the Home Equity Conversion Mortgage (HECM) program (reverse mortgage), backed by the Federal Housing Administration (FHA) as an economic lifeline, but an independent audit has revealed the program is $2.9 billion in the red. As originationnews informs MHProNews, 57,500 seniors cannot afford taxes and insurance and are technically in default, a problem which can lead to foreclosure, despite $534 million from the FHA insurance fund in May 2011 to shore up the program. Several large lenders, including JPMorgan Chase and Wells Fargo no longer offer reverse mortgages because of the street rep of foreclosing on seniors. With some borrowers abandoning their homes because of the need for major repairs, HUD wants to restructure the loans, requiring lenders to do a financial assessment of the borrower’s needs, including their ability to pay taxes and insurance going forward. HUD Secretary Shaun Donovan wants to push its HECM Saver program: Instead of a lump sum payout, the borrower essentially gets a home equity line of credit. In fiscal 2012 FHA lenders originated 48,000 standard fixed-rate HECMs but only 3,800 HECM Savers. As the Baby Boomers age, the number of these loans will undoubtedly rise, more so if the economy remains sluggish.

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FHA to Lenders: Pay Hurricane Isaac Claims Now!

September 25th, 2012 Comments off

MHProNews has learned the Federal Housing Administration (FHA) issued a reminder to approved FHA lenders to promptly release hazard insurance funds to disaster victims of Hurricane Isaac, as per loan documents. The Mortgagee Letter says in the past some lenders used hazard insurance proceeds to pay off the mortgage, leaving the homeowners no funds to rebuild homes and lives. FHA’s Acting Commissioner Carol Galante says, “FHA Lenders are always required to follow our guidance and, particularly following a devastating disaster like Hurricane Isaac, it is important that FHA take affirmative steps to ensure that is the case.” The lender must be listed as “Loss Payee,” which protects the lender, but also ensures proceeds are available once rebuilding of the home begins. For the full HUD press release, click here.

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