FHA Looks to Shore Up Finances with New MIP Changes

re: FHA Looks to Shore Up Finances with New MIP Changes

Alabart Thomas — Sat, 09 Feb 2013 10:55:14 GMT

Most people tend to take out a mortgage, then forget about it. The monthly payments go out from their accounts every month, but they probably couldn’t tell you what the interest rate was if you asked! This is slack financial policy – it is easy to make sure you always have the best mortgage rate, and therefore pay the least interest. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings! http://www.reversemortgagelendersdirect.com/reverse-mortgages-pros-and-cons/ http://www.reversemortgagelendersdirect.com/hecm-reverse-mortgage/

re: FHA Looks to Shore Up Finances with New MIP Changes

Jason Harris — Sat, 02 Feb 2013 01:57:34 GMT

Jeff...if you plan on being in the house long term refi now into a 22 year term in the low 3's fixed. Remember to thank me in a few years. Do it soon before forever MIP starts.

re: FHA Looks to Shore Up Finances with New MIP Changes

jeff nagy — Fri, 01 Feb 2013 16:06:04 GMT

You are the experts, so what does a person who has an existing FHA loan for 8 plus years do? I was on a 3 year arm, and now my rate is 2.25% for 2013. How will this effect me and when do I consider refinancing. I beleive my MIP is a 1/2 point.

re: FHA Looks to Shore Up Finances with New MIP Changes

Frank Ceizyk — Fri, 01 Feb 2013 05:39:22 GMT

another way to look at it is "FHA can't keep foregoing billions in MIP if they are going to continue to make 3.5% down mortgages, as they have for the past 5 years, in many cases in declining value markets, to borrowers with lower FICOs, higher debt ratios, and gifted funds, to keep the flow of future upside down inventory piling up for first time homebuyers who think that houses are the most affordable they've ever been based on the Affordability Index sales pitch (which is based on a 20% down payment). But you're right. It's all in the semantics.

re: FHA Looks to Shore Up Finances with New MIP Changes

Ted Rood — Thu, 31 Jan 2013 06:01:02 GMT

Correct, Jim, for NEW FHA loans with case numbers issued after new mortgagee letter takes effect (likely 4/1/2013), the MIP will be for the life of the loan. Interesting that the article says "FHA has foregone billions" as MIP has rolled off on current loans. Another way to look at it would be to say "the new rules will INCREASE costs to FHA customers by billions". Guess it's all in the semantics. Bottom line, anyone with an FHA loan at 4.5% or above needs to talk with a loan officer pronto to see if doing a streamline makes sense before this change takes effect. Need info? I do FHA streamlines in all states! Thanks, Ted

re: FHA Looks to Shore Up Finances with New MIP Changes

Frank Ceizyk — Thu, 31 Jan 2013 02:03:43 GMT

Jim--despite the recent uptick, it seems highly unlikely we'll see rates rise so fast that these borrowers can't refinance out of FHA altogether. If the news reports about appreciating markets and double digit price rises are accurate--the silver lining is equity may actually be building, right? I know there is a lot panic over the 10 yr rising above 2%, but good Lord, there are still a lot of rates in the 3.5% to 3.75% range, and the FOMC minutes didn't spark any fears of massive interest rate hikes in the near future. It's not like we haven't seen the green shoot, get your money into equities in your IRA market frenzy before 4/15 perception is reality trading drive rates up like this before. FHA has been used as a subprime alternative for far too long, and obviously is feeling the strain of pushing the DTI envelope on leveraged purchases in a declining market environment the last 5 years. This is an opportunity for mortgage finance professionals to go out in the community and educate future housing consumers about the coming changes so they start saving more, and perhaps stop buying too much house so we keep a rerun of the housing boom/bust we're just coming out of, and build a client list of successful homeowners who can buy up and refer us business in a kindler gentler consumer friendly future housing market.

re: FHA Looks to Shore Up Finances with New MIP Changes

Jim Ventura — Thu, 31 Jan 2013 01:07:58 GMT

So, let me understand (and I realize this may be a silly question) - does this mean that NEW FHA loans will not allow the removal of mortgage insurance, or that ALL loans new and old will not be allowed to remove the mortgage insurance? The difference is massive of course - if ALL loans will be affected by this, we will have a new refi craze - OUT of FHA before the rates rise and they're all stuck in mortgage insurance for life.. with these low rates, they may never be able to refi out again....

re: FHA Looks to Shore Up Finances with New MIP Changes

Michael Owens — Thu, 31 Jan 2013 01:04:19 GMT

FHA will be out of the mortgage business in 5 years or less. That appears to be the plan anyway based on these changes. So much for affordable housing via a FHA loan.