For quite some years, with no money down mortgages on FHA and conventional rates quite low for sub-prime loans, VA had really faded from view.
Although no money down FHA can still be done, and call the office today if you are in this situation and want to buy while this program still exists. 219-762-7200 VA loans, if you qualify for them, are back rising in popularity again.
Email our President if you want to review your options for a VA Loan today. Email Address Below:
James Snyder
FHA is asking for comment and has provided a portal to view the new proposed rule at http://portal.hud.gov/portal. The comment period I think goes for 60 days after 6/16. But I would not wait.
The link for the rule is on the home page, just under the "At Home with FHA" pictures. I have posted the link here also: http://portal.hud.gov/fha/investment/5087-N-04_DPA_Pub_6-11-08.pdf
Quotes from the proposed rule:
"HUD's current policies in connection with downpayment assistance have given rise to a practice known informally as seller-funded downpayment assistance that has resulted in disproportionately high borrower default and claim rates among FHA borrowers. Over time, the rate of defaults, foreclosures, and claims has increased so dramatically that the practice has significantly jeopardized FHA's ability to maintain the solvency, as discussed herein, of its insurance fund and to facilitate the provision of affordable home financing to millions of American families."
HUD "seeks to disallow downpayment assistance from any entity that stands to derive a financial benefit from the sale transaction. The major proposed change to HUD's downpayment assistance policy is that it would apply this prohibition irrespective of whether that assistance is made directly or indirectly to the homebuyer. The data displayed in this notice clearly demonstrates the adverse impact of allowing the current policy to continue. HUD is concerned not only about the practice itself, but also about the consequences of the practice on homebuyers participating in FHA insurance programs and on the FHA insurance fund that is there to serve those homebuyers. A practice simply cannot be tolerated when default rates and claim rates for more than a third of home purchase loans it insures range between 2 and 3 times those applicable to the norm."
If you are an interested real estate professional or if you are an interested consumer, please post a comment. If you have been helped with a DPA loan, please post a comment.
To comment, click here:
http://www.regulations.gov/search/index.jsp
Type in the search field for Comments : Standards for Mortgagor's Investment in Mortgaged Property
This is the name of the proposed rule.
There are several pages of comments already.
Although the opinions are quite different on many sites, I am suggesting that rates will gently slide a bit next week, I would recommend locking your rate on Tuesday or Wednesday.
For details on economic news:
The Daily Mortgage Interest Rate Lock Advisory - June 13, 2008
Well rates have been going up this week, with some threats of inflation pending and oil prices higher, the rates are still pushing up.
I still think they will come back down, but it may be fall before we see a break under 6% again. So, if you are buying a home right now to take advantage of the low prices in the market, you would be better to lock. If you are building a house, you may be able to float for a few months and wait out the rates.
If you are refinancing, I would recommend a point or two to buy the rate down and get yourself safely low so you don't have to worry again for the next year.
Why? Why take the chance to buy a home away from people who don't have the down payment? Sure price in a little extra risk, but don't eliminate.
FHA will again try to restrict seller funded down payments
It was reported today that FHA Commissioner Brian Montgomery stated FHA would again be trying to eliminate seller funded down payments. Documentation has been provided demonstrating these loans are 3 times more likely to default than regular FHA loans, and it is clear that HUD wants to restrict them. By the same token these loans are now representing about 1/3 of the loans insured by FHA and it is quite obvious they serve a great need. The thousands of families who have not defaulted on their loans are an excellent example of why we need to keep these programs.
For the last two months I've been highly suggesting to any and all that all homeowners looking to refinance, lock immediately upon taking mortgage loan application. Today, I'm going to suggest otherwise for the first time. Rates have risen back above 6% and I think rates will tick back down under 6% in the next two weeks.
If you are refinancing or buying a home that won't need to close for the next two weeks, I would recommend floating and awaiting this week's economic news. Some pundits are now also predicting oil will drop to $50 this summer!
I'll post more each day this week on economic news and the effects on mortgage interest rates, stay tuned or email me at steved@fftmortgage.com
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