Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages

FHA loans will no longer have mortgage insurance premiums based on a combination of loan-to-value ratios and credit scores. This actually starts today, October 1, 2008, and rescinds Mortgagee Letter 2008-16. This is for all FHA mortgages that have FHA case number assignments as of today.

So, what does this mean? Well, we won't have a chart of like 18 different options, which was tedious at times, depending on the borrowers credit scores. It's now pretty simple and basic.

Overall, this is in effect through September 30th, 2009. It will be revisted prior to that to decide whether changes should be made, depending on the mortgage insurance pool & if it lost monies.Changes will be effective at the beginning of the fiscal year. FHA's fiscal year begins 10/1 and ends 9/30.

Upfront Mortgage Premiums : FHA loans will have an upfront premium in an amount equal to the following percentages of the mortgage as listed below : (these are all applied to the base loan amount)

• Purchase money mortgages & Full-credit qualifying refinances = 1.75 percent
• Streamline refinances (all types) = 1.50 percent
• FHA Secure (not sure about the new FHA Hope Program) = 3.00 percent

Annual Premiums : (these are monthly mortgage insurance - MMI) Below is a chart to show the difference between the LTV (loan to value) and the term of the mortgage.

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Highlights regarding FHA's Mortgage Insurance Premiums :

• All FHA loans to borrowers with a credit score must be risk-classified by FHA's Total Mortgage Scorecard.
• Those borrowers with credit scores below 500 and with a LTV ratio equal to or above 90 percent are not eligible for FHA-insured mortgage financing.
• Borrowers without credit scores will need to be manually underwritten based on the credit criteria described in Mortgagee Letter 2008-11.
• Eligibility for delinquent mortgagors under the FHA Secure initiative is described in full in Mortgagee Letter 2008-13.

** FYI -- In the previous Upfront Mortgage Insurance Premiums that were determined in Mortgagee Letter 2008-16, first-time homebuyers were allowed to take a HUD approved counseling course to reduce their upfront mortgage insurance. Since the new premiums are in effect now with 1 kind of percentage, this does not apply now. **

Overall, it is extremely important for all loan officers and lenders to read Mortgagee Letter 2008-22, because there are 5 pages of new rules and guidelines. What I listed here were the basics of the new changes. The mortgagee letter also talks about the defining of the "decision credit score", if you have multiple borrowers, about non-traditional credit, and the underwriting rules when using FHA's total mortgage scorecard. That last section is very detailed and very important.

For your FHA mortgage needs, please don't hesitate to contact me.

FHA Loan changes for 2008 - 2009

Part 1 - Down Payment Assistance Programs

Part 2 - Upfront Mortgage Insurance Premiums

Part 3 - Down payment and Maximum Mortgage Requirements

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

____________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

The Constitution of the United States of America

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

The source of this preamble was found here : http://www.law.cornell.edu/constitution/constitution.preamble.html

Politics at its best... right? I really don't like to talk about politics and religion. But I needed to voice my opinion because there has been to much finger pointing and accusations. I am also tired of how we can't get along on Capital Hill. It's either the Democrats fault or the Republicans fault. The Republicans come up with a plan or good idea, yet the Democrats shoot it down, even if it would help our economy. Now, this goes on from both sides. But how about the real proof, so the general public can make its own mind up and not with these slandering remarks. What about those individuals that are to firm and true to their political parties and not the truth. Are we that naive? Stupid? What happened to common sense? Please, someone explain this to me before we slide into the shitter, a deep, dark hole. Or is that right around the corner or has happened??

Overall, I have read many blogs in the last week about this sp-called bailout. I held off on this for one main reason. It wasn't finalized as of yet. So many people complaining about this and that.... and for what? Congress is in an emergency session now, to see what they can scrape together. My opinion? I have a few.... but Norma Toering said it best here..... Life Goes On.....

This is not the time to panic. Yes, easier said than done. But what I mentioned above, "We the People".... or is it "we the (our) pocket books"?? This is not funny, yet beyond serious. I am also tired of how the media keeps playing this down, talking about doom and gloom. I was born with a brain and common sense. I have seen this coming for more than 2 years and talked about it in here, regarding a recession.

Let's look at some proof.... Who is at the top of the list for high payouts in regards to Fannie Mae and Freddie Mac?? How about Chris Dodd and Barack Obama to name a few. And again, I am not here to attack a specific political party. But it does make you wonder, those that have cried and those that have been the loudest crucifying others.

What about going back the last 10 years to see the real problems that got us to the point that we are at now? Yes, this can be debated...it's just my knowledgeable opinion.

SOLUTIONS...... gee, this could be a longer list than what I gave Santa Clause when I was 5 years while looking at the kids section of a Sears catalog.

But what about starting at the top? As I mentioned, I really tried to stay away from any blogs or anything written in the paper about the proposed "bailout" until now. There was a part of me that didn't want it to happen. Yes, shoot me. In some sense, we need to let the market correct itself. But we do need some help now.

I will say this, Lenn Harley wrote a very well written post on this topic. The Loss of Consumer Credit. She stated ... "WALL STREET vs. MAIN STREET"

Because of my comment, Lenn made this reply. "The consumer pays over and over for credit impairment. The Wall Street executive is PAID for his failure."

Solution # 1 ..... How about those that knowingly made false statements, reports, cooked the books, etc, etc, just to make sure that they received their bonuses based on performance. How about going after the companies that handle the accounting for such major banks and lenders that also knew about this. Yes, this is starting to happen a little on Wall Street. But how come it's not front page news? How about those CEOs and CFOs and the million dollar bonuses? Why is the Enron crisis being repeated again? Why can't we learn from these mistakes? What will it take? Because of the news that this plan was not approved, the stock market lost over 700 points. Do I hear panic? Again, we need solid solutions....

#2?? Keeping more paying jobs in the U.S., and not selling our soles overseas for cheaper labor. Yes, they have been working on tax breaks for years, but it just doesn't seem to happen.

#3.... How about using our resources and produce more oil and gas locally? Yes, this has been talked about, but why now? Why not 10 years ago? 20 years ago? Why do we have to wait until it's an issue or crisis?

If this is the time to be United... to stand up for what we believe in... and to put our political indifferences aside, this is the time to do it. NOW... We don't need another 9/11 to be united and we surely don't need a financial crisis. But the second part is a little to late. So, again, let's start at the top and also look at the last decade, which in my opinion, has created a large part of this mess.

Before I leave.... again, please read this by Norma Toering... Life Goes On....

Overall, I wanted this blog to be based on a fact and a solution. Paige Rausch described a lot more of this in detail, which is what I wanted to do. But that would have been a chapter of a book. Please read her blog about the failed bailout plan. She makes some excellent points.

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

____________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

Are you ready for some more changes in the mortgage industry? Many of us know that there has been a lot of change, both with FHA loans and conventional loans. And the changes that I am about to mention have already been out there for about a month now, but this is more of a refresher post of information. These are changes that will start to take place next week and up until January 1st, 2009.

Is change good? Yes and no..... The first major change as of right now is that down payment assistance programs will be discontinued for now. As you noticed, I said discontinued and not banned. HUD and the government wanted to ban these programs, more so because of HUD's misleading figures. This is something that I have proof of and that I will write about in the next few days. Hence why I went to Washington D.C. to help keep the DPA programs alive. For more info, please read:

Mr. Belonger Goes To Washington! By Patricia Kennedy

Video : Down payment assistance rally - 9/10/08 - with Jeff Belonger

As of now, there are some gentleman handshakes on the table between Congressman Barney Frank and the rest of the Senate in regards to bringing back these down payment assistance programs. Right now, they end on October 1st, 2008. But with the help of so many individuals such as you and me, and Scott Syphax of Nehemiah, the DPA's should be back by the end of the year. (this is my opinion)

What will the new DPA look like and what is being talked about? Some other things that HUD supports as a compromise to bill HR 6694 are :

• Borrowers with a credit score above 680 will be allowed to participate in these down payment assistance programs with no penalties.
• Borrowers with credit scores from 620 to 679 could be subject to higher insurance premiums. (I personally wouldn't have a problem with this)
• Borrowers with credit scores below 620 would be banned from using the down payment assistance program until mid 2009. ( I truly think that we could improve on this one. First off, why down to 620? Secondly, even people with credit scores of 570 or such can still have decent credit, under FHA's credit guidelines. I would think 600 would be a good place to start. And I will share some of the facts with charts in another post in the next several days. These are from outside sources that aren't connected with HUD & FHA.
  

FHA Loan changes for 2008 - 2009

Part 1 - Down Payment Assistance Programs

Part 2 - Upfront Mortgage Insurance Premiums

Part 3 - Down payment and Maximum Mortgage Requirements

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

____________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

There will always be different views when it comes to fiduciary responsibility. Many of us know that a realtor has a Fiduciary responsibility to their clients. But how do you treat this when meeting with your clients. How does a realtors code of ethics intertwine with your fiduciary responsibility?

Over the years, I have seen some very poor performances both by realtors and loan officers when it comes to looking out for their clients best interest. But many will argue that the loan officer has a fiduciary responsibility to the investor, not the consumer. Is this a fine line? What about those loan officers that don't care about either? Shouldn't it be the consumer first? Besides, if a loan officer looks out for the consumers best interest, shouldn't this be good for the borrower? Or is it a fact that you should make a loan and make it happen, which helps the investor/lender? Now, doesn't this go against what fiduciary responsibility is all about? What about the consumer?

What about those realtors that direct their client to their in-house lender? Shouldn't this be against their fiduciary responsibility? Whose best interest is at hand? Shouldn't you seek the best loan officer for your client and not to a loan officer that is part of your real estate office? What sey thee?

What about greed? What about that realtor that handles both the real estate side of things and the lending side of things? Both as a realtor and a loan officer? Even though it's allowed in many states, shouldn'[t it be banned? How can one person have your best interest on both transactions? Isn't this just like dual agency, which so many states are putting their foot down on now.

First off, you just can't possibly know and understand all about mortgages, the programs, the guidelines, and stay on top of the rates if working as a part loan officer. And then to turn around and be that clients realtor also. I truly hope that they make loan officers responsible. Possibly having them sign something.

I recently received a phone call last week from a realtor working in one of Miami's largest real estate offices. She needed help with an issue and received my name from a realtor in her office in which I closed a loan for her buyer 2 weeks prior. This realtor wanted to know if I could still do the down payment assistance program. I said I could and she went on to explain the problem. Here it is....

She had the seller. The buyers agent was also her loan officer who had the loan for 5 weeks. They just found out a few days ago that they can't do the DPA program now. But the seller was giving a total of 9% in closing costs, part of which was to go to the buyers down payment. Since the realtor/loan officer couldn't help with the DPA, he wanted the 3% that couldn't be used, to be added onto his side of the commissions. He then went on to say, that if they couldn't accommodate this, that his buyer will not go through with the offer.

Now, most of you know that it sounds like some fraud is involved. And the story gets worse. But for arguments sake, the listing agent presented this to her seller. She didn't want to have any part of this and said no. Now she can't sell her house, has spent money on the purchase of another house, and just wasted about 6 weeks. The listing agent was even able to get a hold of the buyer, trying to piece this together, but the buyer thinks that her realtor deserves the extra 3%. And now is telling everyone that she has the 3% to complete the transaction. Can anyone smell something here?

Overall, the listing agent involved and her broker will be filing complaints all the way up the ladder. To the Florida real estate commission, to the board of realtors, and to the mortgage bankers association. And guess what? This real estate agent slash loan officer? His aunt owns her own title comapny, in which she was doing the title on this. And a FYI..... realtors can not be on the mortgage application if it is a FHA mortgage. In which case this was a FHA mortgage. All I can say is that you should be aware as a buyer, seller, a real estate agent, and a loan officer. Not only are people in the business cracking down and reporting, but the FEDS are chomping at the bits to arrest and prosecute. And it's about time..!!!!!

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

FHA loans have been used 30% more as the choice of mortgages as of lately in many parts of the country. What I hate hearing is that they have taken the spot of the subprime loans. This is not true by any part of the imagination. This statement is from those that are inexperienced in both the mortgage industry and the real estate industry. The realization has been that 30% of the subprime mortgages in the last 5 years previous to the last 1 1/2 years should have been FHA mortgages, not subprime.

The subprime loan for many years could go down to a 500 credit score, as long as you had more money down. But your rate was usually higher. The better your score, the less you needed to put down, the lower your rate. Sounds good, right? Wrong, because the subprime rate was always higher than the FHA rates.

To compound this, so many said just because you had a conventional loan, that you had the better loan. This was not always true when putting 3 percent down. In most cases, you were told this, because that particular lender was not FHA approved. Now? Even with 10% down and credit scores less than 680, FHA loans in most cases, will be the best mortgage for you.

Okay, you could argue the fact that this is just my opinion. True, even though I have over 16 years of experience as a loan officer in the mortgage industry. But numbers don't lie. Let me show you.....

The example below is based on a $300,000 purchase price with 5% down. One reason why conventional rates are a little higher in this scenario as in FHA rates is because Fannie Mae and Freddie Mac have added penalties per se. If you are putting down less than 30% and your credit score is less than 680, certain fee penalties would apply to you, which would increase your rate. The FICO (credit score) that I am going to use is 659, which is above the average credit score and I will still show in this example that FHA loans are cheaper, even with 5% down.

***And keep in mind, some lenders have penalties on FHA mortgages with credit scores under 620. And many lenders can't do FHA loans under 580. I can still do credit scores down to 530 with a manual underwrite.***

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Disclaimer : These rates are based on today's rates for a 30 year mortgage and can change any time because of various market conditions. To compare this scenario apples to apples, the fees are the same and with zero points. The conventional rate also includes the penalty for the 659 credit score.

Some of you might be saying that you will be adding $4,897.00 onto your principal balance if you did the FHA mortgage because of the FHA one-time mortgage insurance premium. This is correct and I don't want to confuse you with more numbers and charts. But here is a quick breakdown. If you kept your house for 5 years, which most people sell in a 6 year period, you would have saved $12,807.00 in payments in 5 years. This is a difference of $7,910 that you have saved!!! And one other thing that is very small, but still makes a difference. You will be subtracting a few more dollars per month from your principal because your interest rate is lower, which would offset the interest that you would write off on the 7.125% rate. Just something else to remember, but consult your tax consultant or CPA.

FYI -- If you sold your house in less than 3 years, you are entitled to a refund of the upfront mortgage insurance premium (UFMIP) of $4,897.

How dto I find an FHA approved lender? You want to make sure who you are dealing with is FHA approved.

Why do I say this? Not all lenders are approved FHA and some may tell you that you don't qualify FHA because in reality, they aren't FHA approved. Another reason might be is because a conventional or subprime loan would be easier than a FHA mortgage.

You can find a HUD approved lender in your area by going to the following HUD website: http://www.hud.gov/ll/code/llplcrit.html DISCLOSURE (just be careful of the spelling of the lender. If I put in my company's full name, Infinity Home Mortgage Company, Inc, it tells me that there is no such company. If I put in Infinity Home Mortgage, it shows my company as being FHA approved. Just keep this in mind. You can always call HUD also. (202) 708-1112

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger