Some congressmen are becoming more concerned about the Federal Housing Administration’s financial plight and they want to increase FHA’s downpayment requirement to 5%. Rep. Ed Royce, R-Calif., said FHA is operating at the same dangerous leverage ratios that led to the takeover of Fannie Mae and Freddie Mac. Rep. Scott Garrett, R-N.J., said he has drafted a bill that would increase the FHA downpayment requirement to 5% from the current 3.5% level.

“There are increasing reports of the likely necessity of a taxpayer bailout for the FHA and this legislation aims to implement reforms to try to prevent such a bailout from occurring,” Rep. Garrett said at a House Financial Services Committee hearing. The Garrett bill also calls for a General Accountability Office study to determine the appropriate leverage ratio for FHA. In the early 1990s, Congress mandated that FHA maintain a minimum 2% capital ratio. Keep Reading...

Effective April 1, 2009, Delaware homeowners looking to take cash out on their homes, will have a tougher time.

According to a letter issued by the Federal Housing Authority (FHA), FHA plans to make it tougher for borrowers to secure a cash-out refinance mortgage.

Until now homeowners only needed to have 5% equity in their properties and have a record of on-time payments for at least the last twelve months.  January 1, 2009, FHA required two appraisals for cash-out above 85% LTV.  Now there are eliminating cash-out above 85% LTV all together for Delaware Home Owners. Keep Reading...

The American Recovery and Reinvestment Act of 2009 was passed last Tuesday and part of the bill reinstated the higher Delaware FHA loan limits of 2008. The Delaware FHA loan limits for 2009 were raised as follows;

New Castle County  $420,000  Previous – ($376,000)

Kent County $417,000  Previous – ($271,050)

Sussex County $417,000 Previous – ($312,000)

The loan limit has significantly increased in Kent County.  If you are looking to take advantage of the higher loan limits, please feel free to call me at 302-368-7132 or send me an e-mail to DelawareMortgages@yahoo.com to see if you qualify. Keep Reading...

In response to the passing of HR 3221, this update announces FHA’s new Mortgage Insurance Premiums for the period of October 1st, 2008 through September 30th, 2009. FHA’s Risk-Based Premiums that went into effect on July 14th, 2008 will be on hold until October 1st, 2009.

Here are the 6 things you need to know about these changes…

1. Up-front Mortgage Insurance Premiums:

• Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75%.
• Streamline Refinances (all types) = 1.50%.
• FHASecure (Delinquent Mortgagors) = 3.00%.

2. Monthly Mortgage Insurance Premiums:

• For 30 year loans with LTV > 95%, monthly will be .55%.
• For 30 year loans with LTV < 95%, monthly will be .50%.
• For 15 year loans with LTV > 90%, monthly will be .25%.
• For 15 year loans with LTV < 90%, monthly will not be required.
• For FHASecure loans with LTV > 95%, monthly will be .55%.
• For FHASecure loans with LTV < 95%, monthly will be .50%.

3. Mortgages with FHA case number assignments made on July 14, 2008, through and including September 30, 2008, shall maintain the risk-based premium structure for the life of the mortgage. Keep Reading...

FHA announced it will institute risk-based premiums for Mortgage Insurance. All Delaware FHA Loans require the borrower to pay an upfront mortgage insurance premium plus a monthly mortgage insurance premium. For the first time in history, credit scores will be used by FHA to determine your premiums. The changes will go into effect on July 14, 2008.

Let’s take a closer look at the ten primary changes to the Delaware FHA guidelines:

1. Borrowers with either no score or at least 500 may get an LTV >90%.
2. Borrowers with a score of less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% to 2.25%, depending on the score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on the score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used.
8. Credit rescoring is allowed to improve a borrower’s credit grade.9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. These changes apply to cash-out, rate & term, and non-delinquent FHA Secure refinances. Here is the link to the mortgage letter explaining the changes from FHA http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-16ml.doc Keep Reading...