Trump plans to stop impending reduction in FHA Mortgage Insurance (credit card, loan)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I could have gotten a conventional loan, but FHA offered a slightly lower rate. Why give an extra $100/month to a bank for the next 30 years if I don't have to?
I went under contract on NYE, signed my FHA paperwork on 1/7/2017. I didn't even realize Obama had signed an executive order when my broker sent me revised paperwork to re-sign a few days later. I completed attorney review on 1/20 and my broker sent the loan to underwriting. Only to have the new President undo Obama's change, thus requiring that my broker re-do all the paperwork.
The change in MIP is less than $20/month for me. Do you think I give a *****? No. I bought well below my means and the change would not have affected my ability to get my loan (or any kind of loan).
But it does affect a whole lot of people. My mortgage broker works for a small company with less than 50 employees. My lawyer is a small business. The appraiser is a small business. The seller's attorney is a small business. All of these people have had to do extra work for free--they don't get to charge me extra. Having to re-do all the paperwork also will delay closing, which means the seller has to keep paying taxes.
In the end, I don't think there is anyone who will not get a loan because of these changes. It's just going to cost a whole lot of small businesses their profit. I suspect in a month's time, when financial numbers come out, we will see that mortgage numbers didn't change but profits in the real estate industry did.
Obama inherited a housing crisis created by his fellow Democrats who felt that everyone should be able to buy a home. Google Community Reinvestment Act put in place by Jimmy Carter and put on steroids by Clinton. Granted Bush could have acted to limit it but he did not, and that is his fault. SmartMoney hit the nail on the head in his post.
And yes, my friend did purchase a $800k home using an FHA loan, she purchased her home about 4 years ago. You do realize FHA loan limits vary by area and are adjusted periodically? She purchased her home about 4 years ago. You want me to send you her address so she can show you her HUD-1? Regardless, the point is your asinine statement that FHA is for low income homeowners. Its not, and has not been for a LONG time. It is utilized by credit challenged buyers who cannot obtain conventional financing and really has nothing to do with how much a buyer has regarding a downpayment, as anyone with halfway decent credit can use a conventional loan with 3% down, not financed on the backs of taxpayers.
My post doesn't smear Obama, but your posts are just a sad attempt at smearing the incoming administration, like the other poster stated. I actually agreed with Obama when he raised FHA MIP premiums, as I clearly stated. You can try to twist words to fit whatever narrative you want, but you really fail to show where I am slamming Obama. But the housing crisis lays right on the backs of Democrats who think that EVERYONE is entitled to purchase a home, when in fact, that is NOT the case. These things were in place way before Obama and even Bush took office. Obama was a Senator during part of that time, when he bothered to show up for votes (that was rare). Do some solid research.
FHA is not a good, sound government program. One of the reasons Obama changed the FHA mortgage premiums in 2013 was to keep FHA solvent. It was on the verge of financial collapse, even after a taxpayer bailout. The fact that you even stated that FHA insurance premiums would completely cover defaults shows how uneducated you are about FHA in general.
Obama didn't "fail". He was financed by Wall Street. So was Hillary Clinton. You think they are going to put those in jail who put them in office? Please.
That article wasn't a "projection". Educate yourself.
that is incorrect.
I have a 700 credit score but my issue was coming up with reserves that are required by conventional banks.
Those 3% loans are very predatory,in that the less you have for a down payment the higher the interest rates.
Most conventional banks want excessive Reserves.
Last edited by jerseygal4u; 02-06-2017 at 03:52 AM..
I have a 700 credit score but my issue was coming up with reserves that are required by conventional banks.
Those 3% loans are very predatory,in that the less you have for a down payment the higher the interest rates.
Most conventional banks want excessive Reserves.
She is also wrong about the credit score in the sense that FHA is also more flexible with the debt to income ratio than a conventional loan would be. My score is over 800 but I had to go with FHA because of dti ratio.
So really lower credit score is only one of the many reasons someone would go with an FHA over conventional.
I have a 700 credit score but my issue was coming up with reserves that are required by conventional banks.
Those 3% loans are very predatory,in that the less you have for a down payment the higher the interest rates.
Most conventional banks want excessive Reserves.
No, you probably were required to have reserves because of your credit score. Lenders in my area require around a 720 minimum before you can start looking at conventional loans with less than 20% down. Yours is obviously lower than that threshold.
There is nothing "predatory" about 3% or 5% conforming conventional loans for qualified buyers. You were not. Just like with anything in this world, whether it is buying cars or purchasing homes...the better your credit, the better loan/rate/fees you will get. Even in auto financing a 700 credit score will not get you the "best" rate. That does not mean they are "predatory".
I just closed a client who did a 3% conforming conventional and locked a 3.75% interest rate on a 30 year (he locked mid December, so after election when we saw a rise in rates). 5% would have wiped out all his reserves which is why he chose 3%, to retain some liquidity after closing. Of course, his PMI was higher, common sense would dictate that (more risk, higher costs...how the world works). Hardly a predatory rate, and no one required "excessive reserves". That's what a strong credit score gets you, as it should be.
The highest rates you will typically pay are on non conforming loans. A lot of banks offer different products like this that they hold, as they don't conform to Fannie Mae guidelines thus can't be sold. Perhaps that is something you had inquired about. We have several banks in our area that offer different portfolio products...conventionals with 0 down with income restrictions and no PMI, yet the rate is about a % higher than a conforming conventional.
Its also really stupid to call banks "predatory". Let's stop blaming banks and put some responsibility on the people signing these notes, shall we? I don't recall ever having been at a closing with a banker holding a gun to anyone's head to sign their note/mortgage. Wow, personal responsibility...what a concept.
Thanks for proving my point, though. Lower credit scored buyers and/or buyers maxing out their DTI (seriously, 47% LTV of gross is ridiculous) benefit from FHA, which is even more reason those buyers should insure the taxpayer against defaults. Its the definition of risk.
No, you probably were required to have reserves because of your credit score. Lenders in my area require around a 720 minimum before you can start looking at conventional loans with less than 20% down. Yours is obviously lower than that threshold.
There is nothing "predatory" about 3% or 5% conforming conventional loans for qualified buyers. You were not. Just like with anything in this world, whether it is buying cars or purchasing homes...the better your credit, the better loan/rate/fees you will get. Even in auto financing a 700 credit score will not get you the "best" rate. That does not mean they are "predatory".
I just closed a client who did a 3% conforming conventional and locked a 3.75% interest rate on a 30 year (he locked mid December, so after election when we saw a rise in rates). 5% would have wiped out all his reserves which is why he chose 3%, to retain some liquidity after closing. Of course, his PMI was higher, common sense would dictate that (more risk, higher costs...how the world works). Hardly a predatory rate, and no one required "excessive reserves". That's what a strong credit score gets you, as it should be.
The highest rates you will typically pay are on non conforming loans. A lot of banks offer different products like this that they hold, as they don't conform to Fannie Mae guidelines thus can't be sold. Perhaps that is something you had inquired about. We have several banks in our area that offer different portfolio products...conventionals with 0 down with income restrictions and no PMI, yet the rate is about a % higher than a conforming conventional.
Its also really stupid to call banks "predatory". Let's stop blaming banks and put some responsibility on the people signing these notes, shall we? I don't recall ever having been at a closing with a banker holding a gun to anyone's head to sign their note/mortgage. Wow, personal responsibility...what a concept.
Thanks for proving my point, though. Lower credit scored buyers and/or buyers maxing out their DTI (seriously, 47% LTV of gross is ridiculous) benefit from FHA, which is even more reason those buyers should insure the taxpayer against defaults. Its the definition of risk.
The point is, those lenders weren't around in 2009,2010 & 2011, so FHA was the *only* game in town & without it, there was no bottom to the housing market. Screwing up FHA means there won't be a backstop next time those bankers get stupid, and the last crash *wasn't* the first. My current home was purchased from the fdic in 2009, and also has "resolution trust company" in its deed history. Look it up, wasn't that long ago & it was just slightly smaller version of the last crash.
If you want to talk about "personal responsibility", we can do that after even *one* banker goes to jail.
No, you probably were required to have reserves because of your credit score. Lenders in my area require around a 720 minimum before you can start looking at conventional loans with less than 20% down. Yours is obviously lower than that threshold.
There is nothing "predatory" about 3% or 5% conforming conventional loans for qualified buyers. You were not. Just like with anything in this world, whether it is buying cars or purchasing homes...the better your credit, the better loan/rate/fees you will get. Even in auto financing a 700 credit score will not get you the "best" rate. That does not mean they are "predatory".
I just closed a client who did a 3% conforming conventional and locked a 3.75% interest rate on a 30 year (he locked mid December, so after election when we saw a rise in rates). 5% would have wiped out all his reserves which is why he chose 3%, to retain some liquidity after closing. Of course, his PMI was higher, common sense would dictate that (more risk, higher costs...how the world works). Hardly a predatory rate, and no one required "excessive reserves". That's what a strong credit score gets you, as it should be.
The highest rates you will typically pay are on non conforming loans. A lot of banks offer different products like this that they hold, as they don't conform to Fannie Mae guidelines thus can't be sold. Perhaps that is something you had inquired about. We have several banks in our area that offer different portfolio products...conventionals with 0 down with income restrictions and no PMI, yet the rate is about a % higher than a conforming conventional.
Its also really stupid to call banks "predatory". Let's stop blaming banks and put some responsibility on the people signing these notes, shall we? I don't recall ever having been at a closing with a banker holding a gun to anyone's head to sign their note/mortgage. Wow, personal responsibility...what a concept.
Thanks for proving my point, though. Lower credit scored buyers and/or buyers maxing out their DTI (seriously, 47% LTV of gross is ridiculous) benefit from FHA, which is even more reason those buyers should insure the taxpayer against defaults. Its the definition of risk.
I had a DTI of 20%.
You want to know why my credit score was 700 and not over 750?
The 3 credit bureau's actually recommended I get a mortgage,other wise my score would stay at the lower end of 700. I had no debt other than $10,000 owed on a car.
that is not a joke btw,and i even wrote about this in another section of CD.
Plus,while my score that i can view were 770,the ones the mortgage companies used were lower.
You want to know why my credit score was 700 and not over 750?
The 3 credit bureau's actually recommended I get a mortgage,other wise my score would stay at the lower end of 700. I had no debt other than $10,000 owed on a car.
that is not a joke btw,and i even wrote about this in another section of CD.
Plus,while my score that i can view were 770,the ones the mortgage companies used were lower.
Your score is not 700 because you don't have a mortgage, otherwise no one without a mortgage would have a higher than 700 score. Your score is 700 for other reasons.
I have a 700 credit score but my issue was coming up with reserves that are required by conventional banks.
Those 3% loans are very predatory,in that the less you have for a down payment the higher the interest rates.
Most conventional banks want excessive Reserves.
This is not true since Fannie rolled out HomeReady. 3% down with lower rates and mortgage insurance. DU dictates the amount of reserves, but your score is decent, approvals have been coming out with minimal or no reserves. If your score is 680 or higher, your loan has zero adjustments (rate is discounted anywhere from 1/4% to 1/2%. The PMI is also heavily discounted.
This is not true since Fannie rolled out HomeReady. 3% down with lower rates and mortgage insurance. DU dictates the amount of reserves, but your score is decent, approvals have been coming out with minimal or no reserves. If your score is 680 or higher, your loan has zero adjustments (rate is discounted anywhere from 1/4% to 1/2%. The PMI is also heavily discounted.
You gave me great information about this program when i made a thread about it.
However,my loan officer notified me that Homeready was not available in the area i wanted to buy in.
Also,he told me that the program had higher interest rates than an FHA mortgage.
This is the most under utilized program out there, over half of the lenders out there don't have it to offer or have not taken the time to learn about it. I hope you double checked information you were given.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
