Announced FHA Policy Changes: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.
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.
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.
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.
o 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.
o Implement Credit Watch termination through lender underwriting ID in addition to originating ID. o 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
o 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:
o 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 o 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
In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.
Wednesday, January 20, 2010
Sunday, January 17, 2010
HUD Announced that they would Temporarily waive the 90 Day Seasoning Rule
On Friday, HUD announced that they would temporarily waive the 90 day seasoning rule for FHA buyers. This is the link to the waiver from the HUD website. http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf The waiver goes in to effect on February 1, 2010 for one year.
The 90 day seasoning rule had prevented a buyer from purchasing a home with an FHA loan if the seller had not owned the property for at least 90 days prior to the buyer's purchase contract being executed. There were exceptions for Bank owned properties, relocation companies and inherited properties.
The biggest benefit will be for the "fix and flip" investors. They will now be able to market their properties sooner to FHA buyers who are currently the largest segment of the market. HUD has determined (finally!) that these investors are good for the market.Of course, there are restrictions. For example, an increase in sales price from the seller to the buyer of more than 20% will require a second appraisal and documentation of the improvements that were done to justify the increase in sales price. Also, the transaction must be an arms length transaction.
Please call, email or stay tuned for more information. The announcement was just made on Friday. There are not lender specific guidelines yet.
The 90 day seasoning rule had prevented a buyer from purchasing a home with an FHA loan if the seller had not owned the property for at least 90 days prior to the buyer's purchase contract being executed. There were exceptions for Bank owned properties, relocation companies and inherited properties.
The biggest benefit will be for the "fix and flip" investors. They will now be able to market their properties sooner to FHA buyers who are currently the largest segment of the market. HUD has determined (finally!) that these investors are good for the market.Of course, there are restrictions. For example, an increase in sales price from the seller to the buyer of more than 20% will require a second appraisal and documentation of the improvements that were done to justify the increase in sales price. Also, the transaction must be an arms length transaction.
Please call, email or stay tuned for more information. The announcement was just made on Friday. There are not lender specific guidelines yet.
Tuesday, January 5, 2010
What are people saying about the Thomas Davis Group
“Tom is an excellent, well informed and capable Realtor. He helped me get through a difficult and trying real estate transaction and educated me on the process at the same time. He is a pleasure to work with and very knowlegeable in the real estate industry. I highly recommend considering Tom as your Realtor if the opportunity arises.” December 16, 2009
Top qualities: Great Results , Expert , High Integrity
Matthew Jenks hired Tom as a Real Estate Agent in 2009
“I have had the pleasure of forging a business relationship with Tom for several years dating back to his time in Michigan. I have found him to be very educated, committed and willing to share his expertise regarding the current state of the real estate market. I appreciate his dedication, candor and sense of humor. I would recommend Tom without reservation.” December 15, 2009
Joe Pongracz , Financial Professional , AXA Advisors was with another company when working with Tom at Thomas Davis Group, LLC
“As a local businessperson , I am committed to customer service excellence and value that trait in other professionals as well. I only refer clients to individuals who I believe will treat my clients with the same high level of customer service that I provide. I have referred several clients to Tom and have consistently received favorable feedback from them. Tom is hard working, trustworthy and committed to his clients.” December 14, 2009
Neil B. Cutler , Owner , American Family Insurance - Neil B. Cutler Agency was a consultant or contractor to Tom at Thomas Davis Group, LLC
“I have worked with Tom and on several occasions in helping to purchase a and manage a few properties in AZ. Tom was so cordial and personable to my mother and I, and had exceeded my expectations in performing his duties, that I recognized that he should be more than just someone I work with, but rather, should be a friend. Having worked closely together, Tom and I became good friends over the years and have shared some great times. He is professional, down to earth (important in business these days), and has moral and ethical character. I would highly recommend Tom and am confident you will be more than happy with his abilities to successfully execute his duties as a partner, as a friend, or on your behalf. Al Pourian Senior Project Manager A&D GC Inc.” December 12, 2009
Top qualities: Personable , Expert , High Integrity
Al Pourian hired Tom as a Real Estate Agent in 2006 , and hired Tom more than once
“Tom is very good at understanding your needs and has a great way of explaining things that are foreign to others- like myself. His tenacity and willingness to provide the utmost respect and service to his clients made me even more of a believer. You want answers and ideas- Tom is the man to talk to.” December 11, 2009
Top qualities: Great Results , Personable , High Integrity
Chris Young hired Tom as a Real Estate Agent in 2008
“Tom does a great job and our situation provided highly unique challenges. Tom was right there.” December 11, 2009
Top qualities: Great Results , Personable , High Integrity
Robert Kuvent hired Tom as a Real Estate Agent in 2008
“Tom, is a hard working professional. With his knowledge of the real estate market, you are guaranteed to get the best customer service and price for your home.” December 11, 2009
David Kester , Sr. Mortgage Planner , Sterling Home Mortgage was with another company when working with Tom at Thomas Davis Group, LLC
“Tom has a unique perspective as a real estate agent. He is not just showing homes, he is running a business and providing a service. Any real estate can show a house or do an MLS search, but it takes a specical agent with a greater level of expertise and committment to analyze the transactions and develop an overall plan. If you are looking to buy "the right house" then you should use the Thomas Davis team.” December 11, 2009
Top qualities: Great Results , Expert , High Integrity
Matt Redding, MBA hired Tom as a Real Estate Agent in 2007 , and hired Tom more than once
“I've had the opportunity to work with Tom and many of his clients, over the past 1 1/2 years, through the Thomas/Davis Group. He is an excellent Realtor and treats his clients with the highest levels of respect, professionalism and customer service. He takes a lot of pride in his work, and it shows with his results! He's very knowledgeable in the Real Estate industry, with both first time home buyers and investors, and has proven his expertise with getting his clients the right home for their needs.” March 5, 2009
Matthew Jenks , Founder/Certified Home Inspector , First Step Home Inspectors was with another company when working with Tom at Thomas Davis Group, LLC
“Tom offers a most creative, innovative, and constructive mind that would be an asset to any venture. One would struggle to find a more driven, compassionate, & out-of-the-box thinker for Real Estate work to which he is unwaveringly dedicated.” April 30, 2008
Top qualities: Personable , Expert , Creative
Julie Carr hired Tom as a Real Estate Agent in 2008
“I highly recommend Tom, he gives a 110% toward the goal. Very reliable and very personable.” March 18, 2008
Top qualities: Great Results , Personable , High Integrity
Mark Crockett hired Tom as a Real Estate Agent in 2006 , and hired Tom more than once
Top qualities: Great Results , Expert , High Integrity
Matthew Jenks hired Tom as a Real Estate Agent in 2009
“I have had the pleasure of forging a business relationship with Tom for several years dating back to his time in Michigan. I have found him to be very educated, committed and willing to share his expertise regarding the current state of the real estate market. I appreciate his dedication, candor and sense of humor. I would recommend Tom without reservation.” December 15, 2009
Joe Pongracz , Financial Professional , AXA Advisors was with another company when working with Tom at Thomas Davis Group, LLC
“As a local businessperson , I am committed to customer service excellence and value that trait in other professionals as well. I only refer clients to individuals who I believe will treat my clients with the same high level of customer service that I provide. I have referred several clients to Tom and have consistently received favorable feedback from them. Tom is hard working, trustworthy and committed to his clients.” December 14, 2009
Neil B. Cutler , Owner , American Family Insurance - Neil B. Cutler Agency was a consultant or contractor to Tom at Thomas Davis Group, LLC
“I have worked with Tom and on several occasions in helping to purchase a and manage a few properties in AZ. Tom was so cordial and personable to my mother and I, and had exceeded my expectations in performing his duties, that I recognized that he should be more than just someone I work with, but rather, should be a friend. Having worked closely together, Tom and I became good friends over the years and have shared some great times. He is professional, down to earth (important in business these days), and has moral and ethical character. I would highly recommend Tom and am confident you will be more than happy with his abilities to successfully execute his duties as a partner, as a friend, or on your behalf. Al Pourian Senior Project Manager A&D GC Inc.” December 12, 2009
Top qualities: Personable , Expert , High Integrity
Al Pourian hired Tom as a Real Estate Agent in 2006 , and hired Tom more than once
“Tom is very good at understanding your needs and has a great way of explaining things that are foreign to others- like myself. His tenacity and willingness to provide the utmost respect and service to his clients made me even more of a believer. You want answers and ideas- Tom is the man to talk to.” December 11, 2009
Top qualities: Great Results , Personable , High Integrity
Chris Young hired Tom as a Real Estate Agent in 2008
“Tom does a great job and our situation provided highly unique challenges. Tom was right there.” December 11, 2009
Top qualities: Great Results , Personable , High Integrity
Robert Kuvent hired Tom as a Real Estate Agent in 2008
“Tom, is a hard working professional. With his knowledge of the real estate market, you are guaranteed to get the best customer service and price for your home.” December 11, 2009
David Kester , Sr. Mortgage Planner , Sterling Home Mortgage was with another company when working with Tom at Thomas Davis Group, LLC
“Tom has a unique perspective as a real estate agent. He is not just showing homes, he is running a business and providing a service. Any real estate can show a house or do an MLS search, but it takes a specical agent with a greater level of expertise and committment to analyze the transactions and develop an overall plan. If you are looking to buy "the right house" then you should use the Thomas Davis team.” December 11, 2009
Top qualities: Great Results , Expert , High Integrity
Matt Redding, MBA hired Tom as a Real Estate Agent in 2007 , and hired Tom more than once
“I've had the opportunity to work with Tom and many of his clients, over the past 1 1/2 years, through the Thomas/Davis Group. He is an excellent Realtor and treats his clients with the highest levels of respect, professionalism and customer service. He takes a lot of pride in his work, and it shows with his results! He's very knowledgeable in the Real Estate industry, with both first time home buyers and investors, and has proven his expertise with getting his clients the right home for their needs.” March 5, 2009
Matthew Jenks , Founder/Certified Home Inspector , First Step Home Inspectors was with another company when working with Tom at Thomas Davis Group, LLC
“Tom offers a most creative, innovative, and constructive mind that would be an asset to any venture. One would struggle to find a more driven, compassionate, & out-of-the-box thinker for Real Estate work to which he is unwaveringly dedicated.” April 30, 2008
Top qualities: Personable , Expert , Creative
Julie Carr hired Tom as a Real Estate Agent in 2008
“I highly recommend Tom, he gives a 110% toward the goal. Very reliable and very personable.” March 18, 2008
Top qualities: Great Results , Personable , High Integrity
Mark Crockett hired Tom as a Real Estate Agent in 2006 , and hired Tom more than once
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