Archive for the 'Federal Housing Administration' Category

FHA Offers Short Refinance Program to Underwater Borrowers‎

August 12th, 2010

Written by Frost Mortgage

Starting September 7th the Federal Housing Administration (FHA) will offer homeowners who owe more than their home is worth a new refinancing option or “short refinance” opportunity.

Hundreds of thousands of homeowners who are underwater on their mortgages may by having a lower rate and having their principal reduced through the FHA Short Refinance initiative.

Deutsche Bank said that there may be as many as 20 million U.S. underwater homeowners by the end of 2011. Underwater homeowners are at much greater risk of foreclosure, of either the strategic or traditional variety.

“This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product,” FHA Commissioner David Stevens said.

In order to qualify for the FHA short refinance initiative, homeowner must be current on the existing mortgage to be refinanced and owing more on it than the property is worth. Additionally, consumers must meet FHA loan standards and their lender has to agree to write off 10% of their balance, as well as refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.

The Obama administration implemented numerous programs to help troubled consumers keep their houses that include the popular Home Affordable Modification Program (HAMP), which is designed to assist homeowners through minimizing how much they have to pay on their mortgage.

August 12, 2010 By Jeniffer Winget

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Major FHA Changes Coming on September 7th

August 10th, 2010

Written by Frost Mortgage

FHA (Federal Housing Administration) insured loans are headed for a big change. For those unfamiliar with FHA mortgages, these loans are insured by the government, which allows for flexible approval guidelines. This insurance is paid for by the borrower as an upfront premium collected at close and as a smaller premium collected on a monthly basis. These premiums are then pooled with those from other FHA borrowers to form an insurance fund.

In times of normal demand, the aforementioned process works pretty well, but with the demise of sub-prime mortgage options and collapse of the housing market, FHA loans have steadily grown in popularity. The increased demand has put significant pressure on the capital reserves of the insurance fund. As a result, Congress approved a plan this week to shore up the agency’s insurance fund with a reconfiguration of the mortgage insurance paid by borrowers on loans originated after September 7th.

Under the new structure, FHA requires a borrower to pay an Upfront Mortgage Insurance Premium calculated at 1% of the loan amount. The good news is that this is down from the 2.25% currently required. The bad news, however, is that the monthly figure will increase from a factor of 0.55% annually to a factor of 0.90% annually.

What does this mean for the consumer?

Let’s look at an example: assume a $150,000 home purchase:

BEFORE September 7, 2010

• Upfront Premium (2.25%): $3,256.88
• Monthly payment including mortgage insurance: $793.93

ON OR AFTER September 7, 2010

• Upfront Premium (1.00%): $1,447.50
• Monthly payment including mortgage insurance: $826.93

NET CHANGES

• Upfront cost: Decreased by $1,809.38
• Monthly cost: Increased by $33.00

Overall, these changes should not affect many borrowers; it may place home ownership out of reach for buyers who currently just squeak by. On the practical side, I would recommend that anyone currently in the market for a home to talk to a lender as soon as possible to see how the new FHA loan requirements would affect them. This is especially important for pre-approved buyers as these changes could nullify their approval status or change the assumptions under which they should be shopping.

Written By Doug Katz

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FHA: A range of creative options for borrowers

June 30th, 2010

Written by Frost Mortgage

The Federal Housing Administration (FHA) helps prospective borrowers in a wide range of ways. Frost Mortgage is a huge fan of the FHA program; in 2009, for instance, we were named No. 2 in America for FHA fundings by Mortgage Originator Magazine, and we’ve consistently been the top FHA lender in our home state of New Mexico.

CreditLoan.com has a great article on some of FHA’s main programs, including loans for

• First homes,
• Fixer-uppers,
• Reverse mortgages,
• Energy efficiency, and
• Manufactured or mobile housing.

We can help you with any of these needs–we’re FHA experts. Please call one of our experienced loan officers today for more information on how FHA programs can help you fund your next move.

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Great news for FHA lenders from Congress

June 29th, 2010

Written by Frost Mortgage

Federal Housing Administration (FHA) lenders will be exempted from new “risk retention” rules, which is great news for companies who issue loans insured by the government.

National Mortgage News reports that

[t]he legislation finalized by the conference committee late last week would require originators to retain at least 5% of the credit risk in loans they securitize unless the assets meet a “qualified mortgage” test. All loans backed by the FHA, the Department of Veterans Affairs or the Rural Housing Service will automatically meet that test.

This is a complex time to be in the FHA-backed mortgage business, but the opportunities are huge for those who are eager to learn to succeed as branch partners or loan officers.

Frost Mortgage has been a leader in FHA lending since 1991. If you’re looking to step up, take a look at our mortgage partner offering–we think you’ll find it’s the best in the business.

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FHA loans: Net worth timeline, new monthly scorecard

June 22nd, 2010

Written by Frost Mortgage

The Federal Housing Administration (FHA) has been busy recently.

We’ve written before about a move to raise the minimum net worth worth requirements for loan originators. The FHA recently set out a timeline for implementation (MortgageDaily.com; subscription required). Among the requirements is a $1 million net worth for all new FHA applicants, with at least 20 percent being liquid. The timeline was announced in a mortgagee letter.

The new requirements are likely to shake up portions of the mortgage industry, making it all the more important to look for evidence of stability in your potential lending partner (such as Frost Mortgage’s “Full Eagle” status). If you have any questions, please feel free to contact one of our loan officers today–we’ll be happy to talk with you about our qualifications and the depth of our resources.

Meanwhile, the U.S. Department of Housing and Urban Development (HUD) and the Treasury Department have announced that they’ll be distributing a monthly “scorecard” on the national housing market, including updates on FHA programs. This should be a good resource for those of us who follow the industry closely and should help  us and our branch partners continue to provide you better service and useful products.

If you’re in the market for a loan, now is a great time thanks to low interest rates, and if you’re considering making a move up in the business, it’s a great time for that as well–Frost Mortgage has one of the best programs in the mortgage industry, and we’ve got the resources to thrive even in an environment like this one.

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Greg Frost Sr.: Training industry leaders, planning for the future

June 21st, 2010

Written by Greg Frost

Things are always cooking here at Frost Mortgage, and last week was no exception. I wanted to share a couple of experiences in particular that I’m excited about.

Last week, I was the guest speaker at the Casa Latino National Franchisee meeting held in Orlando, Florida. We shared current mortgage industry information and conducted my Productivity Sales Training based on the 6 Scientific Principals of Ethical Influence.

This week I am in the airport and on the way to meet with the Primary Residential Mortgage, Inc. executive team for a 2-day Master Mind conference in Salt Lake City on Monday and Tuesday. Strategizing for continued industry leadership is the meeting goal, which includes design work on a new 580 FICO score FHA product that will be originated and serviced by Primary. I believe that a manually underwritten, common sense FHA product, without the severe FICO score overlays that are currently being imposed by the big Banks, is essential to simulating mortgage production and home sales. During the first 65 of the 77 years FHA has been in existence there was no FICO score a and no automated underwriting. Loans were manually underwritten to the FHA credit manual, and still should be.

Coming weeks are no less packed. What’s on your agenda?

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Are Jumbo mortgages coming back?

June 2nd, 2010

Written by Frost Mortgage

The Mortgage Bankers Association suggests the news is mixed on whether Jumbo loans will make a comeback, though most agree they’re not likely to hit pre-crash levels anytime soon. Still, the first quarter of this year was above 2009 averages, and the idea is at least on people’s minds again.

Here at Frost Mortgage, we’ve consistently said it’s impossible to time the market, and we believe great producers make their own fortunes. If you’ve got what it takes and you’re looking for the best platform in the mortgage business, please look at our Branch Partner Opportunities today. We think once you’ve compared our numbers to the competition’s, you’ll be glad you did.

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Final days for ’seller concessions’

June 1st, 2010

Written by Frost Mortgage

The writing is on the wall for funds for homebuyers from sellers that can pay for some services and taxes in the transaction. As the Washington Post explains,

Say you’re buying a $200,000 house. If you are using FHA [Federal Housing Administration] financing under current rules, you can structure the contract so that the seller agrees to pay at settlement all closing costs and even the cost of some needed repairs, up to 6 percent of the price, or $12,000. On a $400,000 house, allowable concessions go to $24,000. That’s huge, especially if you have to struggle to come up with a 3.5 percent down payment and you’re not sure where you’ll find the closing and repair money.

Contrast that with using Fannie Mae or Freddie Mac conventional financing, in which seller concessions generally are limited to 3 percent. For many buyers, the extra negotiating flexibility built into the FHA program makes the choice of programs a no-brainer.

Sometime this summer, though, seller concessions will be cut to a maximum 3 percent. The precise timing is unknown because the announcement had not been made in the Federal Register, but the message is clear: Act now if the concession affects your deal.

We can help. Frost Mortgage is a “Full Eagle” FHA expert. Please contact one of our experienced loan officers today and we’ll quickly help you work through any questions. Because at Frost Mortgage, we don’t just close loans–we open doors.

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‘Qualified mortgages’ to be exempt from new risk requirement

June 1st, 2010

Written by Frost Mortgage

The recent “Wall Street Reform” bill required that 5 percent of a mortgage be retained as a buffer against risk. Fortunately, as National Mortgage Newsreports, a measure passed in May amended that requirement to exempt “qualified mortgages” (subscription required)–those that are generally fully documented and include 20 percent down and mortgage insurance. We agree with Sen. Johnny Isakson, one of the co-sponsors of the bill, who said, “Risk retention is not the cure-all for good lending–underwriting is.”

If you’d like to join a mortgage group that values smart thinking and solid principles like these, please look into our Branch Partner Opportunities. We’re always looking for qualified new partners for this industry-leading offering.

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FHA Reserve Fund: Signs of better health

May 26th, 2010

Written by Frost Mortgage

The Federal Housing Administration (FHA) Reserve Fund is a buffer against loan defaults and claims on the federal mortgage insurance fund. FHA Commissioner David Stevens (National Mortgage News; subscription required) was optimistic in Senate testimony this month that the fund will finish the fiscal year in a better capital position after being battered for several years by soaring claims.

This is good news. Here at Frost Mortgage, though, we don’t wait for market timing, and we’re always bullish on business opportunities for those who are truly motivated. If you’re a top producer looking for a Branch Partner opportunity or to take your career as a Loan Officer to the next level, give us a call today. We don’t close loans — we open doors.

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