Smart Borrower Blog

Archive for the ‘Federal Loans’ Category

FHA Increases Upfront Mortgage Insurance Premium for Buyers

If you’re looking for a house, and thinking about getting an FHA loan, you might want to apply before April 5, 2010. That’s the date the FHA is raising its upfront mortgage insurance premium (UFMIP) on all FHA loans and your FHA case number will have to be assigned before that date in order to qualify at today’s lower UFMIP rates. Actually, you’ll need to get in touch with a lender a few days before April 5th, as you’ll need an FHA case number assigned and that can take several days, depending on your lender. What is an FHA Loan?... more »

Freddie CEO Defends His Company’s Existence

After Congressman Barney Frank suggested recently that government-sponsored entities Freddie Mac and Fannie Mae should be “abolished,” Freddie’s CEO took a stand listing off the reasons his company needs to remain in business. During a speech at the Detroit Economic Club on Tuesday, Freddie’s chief executive Charles “Ed” Haldeman Jr. said he would like to remind policymakers that Freddie and Fannie have helped to make the 30-year fixed rate mortgage possible. He also said that they have provided the most liquidity to the mortgage market, as they were the source of roughly 75 percent of all liquidity in 2009. Haldeman... more »

Will FHA Mortgages be the Next Mortgage Crisis?

Federal Housing Administration-backed mortgages are now the next market crisis waiting to happen, according to home builder Robert Toll, CEO of Toll Brothers Inc, the nation’s largest luxury builder. “Yesterday’s subprime is today’s FHA,” Toll said today at a New York builders conference. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll likely based his comments on reports last week from the FHA that its reserves ratio has fallen to 0.53 percent, well below the federally-mandated two percent designed to protect against fund default.... more »

Is Obama’s Home Affordable Modification Program a Good Deal?

If you are in danger of default or delinquent on mortgage payments, you may wish to take advantage of the home affordable modification program that began in March. Although the program provides relief for home owners, what is little-known about the program is the damage that is done to your credit score. An article from Bloomberg gives us the information that everyone should be aware of when considering this program. What happens is this: When you apply for a loan modification, many of the large lenders, including J.P. Morgan Chase & Co. and Bank of America, report the loan modification... more »

HUD Requests a $798 Million Credit Subsidy

Recently, the Department of Housing and Urban Development (HUD) released its 2010 budget.  In their budget, they asked for a $798 million credit subsidy for the reverse mortgage program that is handled by the FHA.  HUD has never requested a subsidy of any kind.  It begs the question is the Home Equity Conversion Mortgage (HECM) actually working as it should?  In a report by ReverseMortgageDaily.com, the author consulted  the Congressional Justification Report to determine the reasoning behind the request. According to this report, HUD estimates that 121,000 new mortgage loans will be endorsed in 2010.  In 2009, HUD estimates that... more »

Fannie & Freddie Tighten Lending Standards

According to the Wall Street Journal, Fannie Mae, in efforts to provide some stability in the mortgage market, have said that they will no longer guarantee mortgages on condominiums that are in buildings where fewer than 70% of the units have been sold.  Representatives Barney Frank, D., MA and Anthony Weiner, D., NY, have written a letter to the chief executives of Fannie and Freddie, warning them that the 70% sales threshold is detrimental to the market and could lead people interested in buying a condo away from new developments. In all truthfulness, you must look at both sides of... more »