FHA mortgage ins and other changes (2013, mortgages, fees, housing)

[old_cold]

Along with new down payment requirements and other changes is this.........

"In addition, homeowners with FHA-backed mortgages will be required to continue paying the premiums, based on the unpaid balance, for the life of the loan. Premiums no longer will be canceled when a homeowner has repaid 22 percent of the loan's principal."

FHA to hike mortgage insurance premiums - Chicago Tribune

[Pfhtex]

Yes this is about to roll out. Basically. FHA is creating a refinance market, and devaluing their product. The premiums have really increased over the past few years.

And now, buyers will think twice, considering options like improving their credit and going with Conventional lending @95-ish%, or exploring the 2nd mortgage market. Otherwise, buyers' hands will be forced into refinancing a few years down the road, pending digestible rates.

[aneftp]

Can you blame the govt for increasing fees on FHA loans.

FHA loans made up over 40% of all loans around 2009-2010. That's scary.

Why? Because the majority of loans made during the housing boom (2001-2006) were not FHA loans. And the percentage of those loans with very little down resulted in a high default rate.

Fast forward to 2013. Guess which loans are still increasing in default rates? You got it. FHA loans. Probably those made after the credit crunch in late 2008-2010.

"On a seasonally adjusted basis, the overall delinquency rate decreased for all loan types except FHA loans. The seasonally adjusted delinquency rate decreased 26 basis points to 3.79 percent for prime fixed loans and decreased 68 basis points to 8.02 percent for prime ARM loans. For subprime loans, the delinquency rate decreased eight basis points to 19.15 percent for subprime fixed loans and 61 basis points to 22.34 percent for sub-prime ARM loans. The delinquency rate for VA loans decreased by 37 basis points to 5.97 while the FHA delinquency rate increased by three basis points to 11.17."

National Delinquency Rate Drops to 7.09 Percent in Q4 | Mortgage News | Daily National and State Headlines

Just the American way to put as little down along with not having the greatest credit. How much do you want the taxpayers on the hook for?

[mkarch]

Originally Posted by aneftp

Just the American way to put as little down along with not having the greatest credit. How much do you want the taxpayers on the hook for?

Ironically, raising the fees for FHA may only make it less attractive to more qualified buyers.