HUD issued a press released today announcing changes to be published in a mortagee letter tomorrow. Most of these changes have been discussed in the industry over the last several months and were anticipated.
Here is a summary.
- Up front mortgage insurance increased to 2.25%
- Seller concessions will be reduced to 3%
- New borrowers with less than 580 scores will require a 10% downpayment
The changes will also increase lender liability for loan performance.
There will be a comment period before the changes to the seller concessions and the increased down payment for borrowers with lower scores are implemented.
Of these changes the seller concessions will have immediate impact on buyers, although increased lender liability and tighter enforcement of lender performance may very well prove to be the more lasting and significant change.
These changes are expected to be in effect in the Spring and early Summer. These changes are likely to be just the first of more FHA enhancements.
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Richard Smith |
American Acceptance Mortgage, Inc |
FHA, VA, Rural Development, Conventional, Jumbo,
Reverse Mortgages, FHA 203k Renovation
Home financing in Tennessee and Georgia.
Don't they want housing to recover. They are making it impossible on borrowers.
Thanks Richard for this update - For the sake of our economic recovery, I hope it doesn't get worse than this.
The new changes will cause many people to not be able to purchase a home. We will see.
Thank you Richard. We have been hearing that if was coming and that it would be severe enough to knock several out of the market for new homes. It will interesting to here the spin that Will be placed on this one. Good post, depressing news.
Derenda,
Thanks for commenting. I really need to post some updates on the changes. There are some bad legislative proposals in the works.
Scary stuff.
But it is better to know. :)