My New Blog

You may ask yourself… why do I need to be prequalified before I look at homes? The answer is simple, it shows you are a serious buyer. This is important to realtors and seller’s alike. With the recent foreclosure crisis, bank owned properties are a great way to purchase a home with instant equity. Banks (bank owned properties) are especially concerned with whether or not a potential buyer is prequalified. Often times the bank will not accept an offer without a letter of prequalification from a mortgage lender. When you have a great deal there can be competition for the home. You can be sure that when you have your letter of prequalification and your competition doesn’t you will likely win the bid on the home.

Here at Christopher Paul Financial, LLC we pride ourselves on customer service, expert staff and understanding our customer’s needs. For more information, browse our website. Start Here for information on prequalification!

Today the yearly FHA annual financial report and economic outlook for FY2010 was released from the desk of David H. Stevens. The report including findings showing that the insurance fund grew by more than a billion dollars!! FHA management has made sweeping moves in the last year changing many of their policies and guidelines in preparation for a disastrous year. Among the many changes was credit scoring requirements along with increases in the monthly mortgage insurance. It is quite interesting to note that their capital resources are at their highest level ever at $6.5 billion greater than the independent actuary predicted last year. Also an important note, insurance claim expenses are down 21 percent than predicted and single family loan quality has improved dramatically. The FHA is also focusing on the congressional reserve requirements, as they are still low at .50 percent of total insured loans on their books. They are optimistic that the reserve will reach 1.99 percent by 2015.

The National Association of Realtors(R) urges the mortgage lending industry to reassess and amend their policies so more qualified home buyers can become home owners. NAR's Board of Directors adopted this policy today during the 2010 REALTORS(R) Conference & Expo.

"Realtors(R) believe in a responsible, sustainable model for home ownership, and current credit policy restrictions are not conducive to that model," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. "The Federal Housing Administration, Fannie Mae and Freddie Mac have a mission to provide mortgage liquidity to qualified home buyers, including low- and moderate-income families and first-time home buyers. That mission is being impaired by unnecessarily restrictive limits on the availability of credit, and these extremely tight credit policies are significantly delaying a housing market and economic recovery."

Currently, FHA, Fannie Mae and Freddie Mac account for more than 90 percent of the mortgage market. Lenders refuse to make loans unless FHA will insure them or the GSEs will buy them. Stricter FHA and GSE underwriting rules eliminate many buyers with credit scores as high as 750, and lenders are imposing credit overlays of their own, restricting the availability of credit.

"Under current practices, many would-be home buyers who could responsibly, affordably become home owners are unable to do so," said Golder. "NAR wants to ensure that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream."

As part of its credit policy to increase mortgage lending to qualified borrowers, NAR will develop educational materials for Realtors(R) and consumers about credit issues, including the importance of good credit, lender credit policies, and how to find a fair and affordable mortgage.

NAR will also work with FHA, the GSEs, lenders and federal regulators to encourage them to assess their credit policies on a regular basis, and will urge them to re-evaluate their policies regarding which home owners can qualify for loan modifications, short sales, or deeds-in-lieu of foreclosure to help more home owners keep their homes or, when that is not possible, help them begin to rebuild their credit.

In addition, NAR made a series of recommendations to FICO Corp. and lenders to amend certain rules on the utilization of credit and how negative credit scores affect future home purchases, and to change how they report and treat loan modification and payment plans. Other recommendations include making credit scores and credit reports available to borrowers against whom adverse action has been taken, and conducting research on the impact of credit policies on underserved groups.

"Home ownership matters -- to individuals, families, communities and our nation's economy," said Golder. "Ensuring reasonable access to affordable credit is an important part of NAR's efforts on behalf of anyone who aspires to the American Dream of owning your own home."

The National Association of Realtors(R), "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. News releases are posted in the Web site's "News Media" section in the NAR Media Center.

REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.

Home buyers get ready, buying a home is going to be even harder than before. HUD is changing the requirements for home buying again. They are tackling issues like, raising down payment, mortgage insurance premiums and cutting the amount of closing costs a seller can pay for you. This may be  another big blow to an already ailing housing market.

If you are buying a home please call us for the latest updates 877-237-3627.

 THis is direct from HUD's website.

WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
     
     
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
     
     
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
     
     
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches