Comments on: FAQs about FHA Modernization and the Stimulus Bill

By: Bob

Bob — Fri, 27 Feb 2009 16:15:58 +0000

I shopped around for quite a while looking for a net branch opportunity. Opening up a Washington mortgage net branch was my ultimate goal. After getting several recommendations and examining many companies, I settled on Top Flite Financial and I couldn’t be happier (www.tffinc.net). I’m now my own loan officer. I set my own hours, and personally couldn’t be happier with my choice.

By: MB

MB — Fri, 02 May 2008 02:25:32 +0000

thanks for the info tobin, I hadn’t heard of it..will have to read up on that program. if it does what I think you’re saying, that would be a different defintion of reverse mtg. don’t think it will help our stated income or no doc friends to refi though…kind of unreasonable when most of them were told “make the pyts during intro period and you can refi in a couple years prior to reset” In this economy for people’s house pyts to increase dramatically like that is really unacceptable. they can’t sell. they can’t get the same kind of loan they got before. that’s the problem. why the gov’t didn’t require lenders to convert these loans to low fixed rates and disband SISA ARMs is the problem.

By: tobin

tobin — Thu, 24 Apr 2008 17:01:04 +0000

MB, the FHA reverse mortgage called a HECM or home equity conversion mortgage does just that, it is essentially a neg-am loan and is also a non recourse loan as the MIP or mortgage insurance premium provides that safety factor. There is a disclosure in this loan that records the loan amount as 1.5 X the lending limit and at the same time provides any amount of money that has accrued on the loan that exceeds the home value is forgiven by HUD. The borrower or their heirs will not owe more than the homes value at time of sale or death of last remaining borrower.

By: MB

MB — Fri, 07 Mar 2008 22:18:13 +0000

re: fielding mellish comment…using bank stmts deposits to verify income works…there are people giving lap dances out there (or other self-emp) who will not have tx rtns with their income (can you blame them??) but 12-24 mos bank stmt deposits will work as proof of ability to pay…alas I’ve also heard that fannie and freddie are going to eliminate SIVAS and SISA….SISA needs to go anyway, but I hope they keep the SIVA. the upside? crashing RE markets will eventually get people back to affordable housing..I guess the next generation will have viable credit

By: MB

MB — Fri, 07 Mar 2008 22:02:09 +0000

here are solutions being contemplated by HOPE NOW an alliance between gov’t and banking…please email them at info@fsround.org and tell them we need solutions like these for upside down customers:

Options for handling Upside Down Refinances in Conjunction with FHASecure:

Forgive the portion of the mortgage balance greater than (approx) 98% of the current market value allowed by the FHA loan

An interesting idea from a banker on C-Span: Create a negative-equity certificate attached to title (no interim pyts) when house is sold (assuming appreciation eventually recovers) the certificate is paid off (no interest)…it will be a loss if the property is sold for a price that does not cover the amount of the negative equity certificate. (the Borrower would own any amount of the home sale in excess of the negative equity certificate.)

If debt to income ratios allow, structure an affordable 2nd loan to cover remaining mortgage balance due.

Request that FHA offer a 40 year fixed rate mortgage product to reduce payments to affordable levels

Defer the “non-qualifying” portion of loan balances for 36 months–the eventually applied loan terms for this portion of the balance must be affordable, so that there is not another cycle of overly stressed homeowners facing foreclosure.

By: MD in OC

MD in OC — Fri, 07 Mar 2008 15:20:14 +0000

MB is correct about the LTV requirements. we also need to add in all the fico add ons as well as other pricing add ons then look at tighter guidlines on underwriting as well….Here in OC Ca. the king of stated income loans i don’t expect much help for people refinancing…..anyone who bought a home at least 3 yrs ago with 85% financing or more are DONE! No equity left. another thought is that so many people here in OC were using interest only loans as well. do they really want a fully amortized loan or can they really afford one?

By: MB

MB — Fri, 07 Mar 2008 01:36:19 +0000

while the loan limits have increased, the ltv requirements are not going to bail out people who are upside down on their current loans…so it will offer limited assistance to those facing foreclosre.

By: Understanding Key to FHA Modernization and Economic Stimulus Bill Opportunities :

Tue, 04 Mar 2008 15:10:01 +0000

[...] Pointers to several other FHA and economic stimulus FAQs and resources [...]

By: Fielding Mellish

Fielding Mellish — Tue, 26 Feb 2008 04:35:27 +0000

Thanks for the update on specifics regarding FHA. The way things are going with Fannie & Freddie (5% down effectively required on all purchases due to almost all properties being in a “declining market”), FHA will become a much bigger percentage of loans done.

I have still not heard whether there is movement on federal legislation to require “written documentation of borrower’s reasonable ability to pay” – which would effectively outlaw SISA, SIVA’s, No Ratio’s (which are now virtually nonexistent anyway), etc. The main thing these programs do is facilitate ongoing tax fraud: People cheat on their income taxes with the knowledge that they’ll still be able to get mortgage financing. Outlaw stated income & people will have to report their true income & pay their taxes if they want to have any chance of ever getting mortgage financing.

By: Understanding Key to FHA Modernization and Economic Stimulus Bill Opportunities : Lead Marketwatch

Mon, 25 Feb 2008 16:05:14 +0000

[...] Pointers to several other FHA and economic stimulus FAQs and resources [...]