Changes always make for great conversation. Just a few years ago that conversation was relatively limited in reach to inner office or group communication. With the advent and proliferation of the Internet and all it brings information truly spreads at the speed of light. With everyone having the same amount of reach regardless of having the same knowledge and experience the “playing field” for readership is equalized.

The Federal Housing Administration, the arm of the Department of Housing and Urban Development which insures mortgages on millions of home, recently adopted some changes and announced a smattering of proposed changes which have the potential of making it more difficult for struggling Americans to enter the housing market or make a change in housing.

Accounting demonstrates FHA loans to be in default or foreclosure 18% of the time when the standard is 14%. Numbers like these are massive compared to the levels of just 6% and 4% of a couple years ago. Obviously it is important for every lender and insurer to take steps to protect their own ability to continue in business and providing employment for the families who depend on them. Since the FHA is one of the only government programs which operates at a profit without taxpayer assistance it is important to the organization, industry and people it remain that way.

Some of the announcements by HUD are scheduled take effect while others are still open for public comment even though they have been “reported” as final and factual.The following intends to dispell the myths.

FHA down payments has been increased to 5% FALSE

HUD has proposed raising the minimum down payment to 10% for borrowers with a minimum middle credit score of lower than 580. Proposing this change HUD will place it into the Federal Register for open comment in February. Open comment means if you think this is a bad, or good, idea you need to make your input known during the comment period instead of voicing your opinion after it goes into effect.

FHA upfront mortgage insurance is increasing TRUE

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This includes both types of streamline refinances whether credit or non-credit qualifying. Case numbers are assigned at the time of full application when the lending process begins.

The HUD anti-flip rule has been waived TRUE

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

* All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
* In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
* The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Seller concessions have been decreased by 50% FALSE

More than anything this is a throw-down to the appraisers of the nation. The proposed change, to be placed into the Federal Register for open comment in February, intends to decrease the allowable seller contribution from the existing level of 6% of the sales price to a maximum of 3%. This is another one of those opportunities you have to make your professional experience known during the open comment period instead of waiting until after it goes into effect.

Do yourself, your clients and your industry a favor and make sure you fully understand or work with a trusted FHA professional who comprehends changes like these. Many industry participants rush to blog or otherwise pontificate about changes without taking the time to digest the changes, speak with a representative of HUD or engage an experienced FHA mortgage professional.

Ken Cook – Georgia – FHA, USDA, VA and Conventional Home Loans (678) 439-8683

Fifty years ago this past August I was born in the same hospital where decades later my children would be born and I would say good-bye to both of my parents. I remember when there was no Interstate highway, only six government high schools and the fire department was all volunteer. That was before my fellow Cobb County residents Ty Pennington, Travis Tritt or Julie (Julia) Roberts were born.

The seat of Cobb County is Marietta. I was, in fact born in Marietta and that is where I currently live. As a side note I live in the home my parents bought the year after I graduated high school. So let’s just say I am a little familiar with the history of my town and I would love for you to know a little about it, too, but not the histroy so much as the today.

Earlier I mentioned this is the home of a few famous people and Travis still lives in the area but a bit to the west. My town, Marietta, and more specifically East Marietta (East Cobb) is quite afluent. Many of the local sports stars and other celebrities have made this area their home. With established neighborhoods and some of the highest performing high schools in the nation such as prestigious Walton High School right here in my neighborhood, East Cobb is a highly desirable location to live and raise a family.

Our culture is highly diverse with people from every thinkable background making their home here. We have a large Asian population, big middle eastern population and many other nationalilities in the area. This leads to, of course, a vast selection of restaurants with food and atmosphere from around the world.

Today the population of Marietta, Georgia is about 68,000 and with the exception of income our demographics are very similar to those of Beverly Hills, California. Housing prices and values, on the other hand, are lower mearning you can get much more for much less. The average home value has declined over the last five months from $288,320 to $269,915 but there is also good news for sellers as inventory has also decreased steadily from over 2,300 one year ago to less than 1,850 today. This is considered a nine month inventory even though one year ago the average number of days on market was 113 and today that number is 200.

Finding work, professional, career or other, is not difficult in Marietta. In fact our unemployment rate today is estimated at only 2.4% with a median household income of $112,572. Big employers include the government (31,000 jobs), Lockheed Martin, Bosch, IBM, GE, Coca-Cola, and others. There are 238,000 jobs in Marietta. Cobb County population is reported at an estimated 660,000.

Marietta and Cobb County are home to the F22 war plane, the Atlanta Country Club where the PGA Classic was held for many years, and Six Flags over Georgia (more recently called Six Flags Under Water!) Come on over and let me show you Lost Mountain, the Big Chicken and some really good food and fun!

If you are planning on moving to the Atlanta area and are looking for a somewhat conservative but youngish area call me. I can tell you things your agent can’t and I can also welcome you here as a life long resident and even tell you enough local secrets to get you started! Anyone is welcome to Cobb County – after all we have Alton Brown (Iron Chef/Good Eats) and John Patrick (T2000 from Terminator/CSI New York). Oh, and I grew up with Randall Bently, Sr., father of Randall Bentley, Jr., who stars in Heroes.

My name is Ken Cook, Jr., and I am a well experienced small business man and mortgage lender. Call me at 678-439-8683 it’s not an answering machine it’s a ring everywhere. Don’t leave a message, just say your name, nothing else, you only get 4 seconds

Some data may have come from:
http://zipskinny.com
http://city-data.com
http://altoresearch.com
http://wikipedia.org
http://jobs.aol.com

The MDIA Rule went into effect, in part, on July 31, 2009. Many people still are not aware of this rule and how it may affect every closing in the nation. This rule, unlike some others, applies to banks, lenders and brokers equally.? In short it says the Truth-In-Lending document with an accurate Annual Percentage Rate must be delivered to the borrower a minimum of seven (7) business days before closing.

This rule affects all loans whether it is an FHA loan, a Fannie Mae loan, a Freddie Mac loan, or a Ginnie Mae loan. The MDIA affects loans originated by brokers, lenders and bank employees. The MDIA applies to new homes, previously existing home and home refinance loans.

Here is the catch: If the APR changes more than .125% the Truth-In-Lending (the other 1/2 of the Good Faith Estimate) has to be resent and another waiting period of three (3) business days must expire. Some lender interpret that to include a decrease in the APR of more than .125% and some only consider an increase of more than .125% since the government’s action does not specify.

There are many, many reasons the initial disclosure could be wrong including loan amount which may be affected by the appraisal, payoff which could be higher (and usually is on a refi) than indicated on the current mortgage coupon, or a list of other factors which may even affect a home purchase – not just a refinance.

If this short post in any way sounds condescending it is by no means intentional. There is, however, a good cause for expedience in delivering this information in today’s volatile market. Two weeks ago I could easily offer a 4.75% interest rate on a thirty year fixed rate FHA home loan. Last week that rate was as high as 5.675% and today it started out at 5.375% but has now dropped to around 5.25% (this is not an advertisement for a rate so I am not posting an APR but I will give you the APR if you email me or call me).

Rates are going to go back up. They have been much lower for much longer than almost every professional expected and it has little to do with what the government does as to whether they stay low for much longer. In part today’s rates are artificially low because of the massive trillions of dollars they have dumped into the market but they could go higher in spite of that fact and almost certainly will go higher quickly once that investment ceases.

Here is what you must know now in order to get the good interest rates:

FHA loan rates are not going to stay low forever. Waiting for them to get back into the fours is like waiting for a volcano to erupt. Most volcanologists will tell you they rarely do.

Once they start back up if you do not have your FHA loan application already submitted you may completely lose the opportunity to get the lowest rates. It costs the lender money to lock a loan and that’s why many charge lock fees (Novation has not charged them in the past).

If you drag your feet and miss the lower lock you may actually not qualify for the same FHA loan once the rates go up because your debt-to-income ratio will increase based on the monthly mortgage incrase as a result of the higher interst rate.

The urgency is for you to get pre-qualified instead of just sitting around watching the tube hoping to save a couple more dollars. In fact play around with the calculator to the left to see how much your payment will change based on a .125% interest rate. You want to wait to see if you “may” be able to save $9 a month then by all means do so. Remember, they go up just as fast as they go down and one day soon they are going up.

Nobody knows when but interest rates will go up. Seriously, nobody knows when. Rates have been at a historical low for months and months. You, your friends, your family, and your co-workers keep reading little articles like this one saying, “refinance now or buy now if you need to because rates are going up.” Still, you have not done so. No, you’ll wait until rates are up and say, “man I can’t believe I missed that opportunity!”

This past week we saw rates jump from 4.75% to 5.25% in less than 4 hours. We saw people who had not yet locked in their rate have their payments jump as much as $50 or more per month just by waiting a few more days.

Now we do expect rates to decrease slightly in the coming week but not one person knows when or how much. You can rest assured thousands of bloggers will be guessing and some will be right but not because they necessarily knew anything special – even though it does take knowledge and understanding to “get close”.

Do yourself a favor and call a LOCAL MORTGAGE BROKER or lender like Novation Mortgage if you are in Georgia or Florida and get the facts today. The chances of rates going higher are vastly greater than them going lower or even staying level.

Georgia and Florida FHA loans for purchase or refinance including the 203(k) and streamlined.

Every day someone says to me, “do you believe the report that was in/on ___________ this morning?” Let me guess, banks are not lending for mortgages and you must have twenty percent down? The truth is FHA still goes to 97% for the rest of 2008 and beginning in 2009 you will still be able to acheive FHA financing to 96.5%

Additionally we are, once again, able to offer 100% financing to homebuyers who will be occupying their purchase. In other words owner occupied primary residence single-family homes for purchase do not require a down payment. We use a Fannie Mae 95% loan or 97%

Don’t be afraid to call a LOCAL MORTGAGE BROKER and ask for the truth. Why a mortgage BROKER? First of all they have access to multiple lenders including lenders you would not have direct access to. It is an outright lie that mortgage brokers are “expensive middle-men who inflate the interest rate and closing costs”. Not only has the largest mortgage cost study ever conducted proven that to be a false statement but there are, especially in Georgia, laws and regulations which govern mortgage brokers but do not affect banks and lenders!

If you call a bank or lender and you are turned down that’s the end of the story – you’re done, move along. If you call a broker you may be turned down with three or four of the lenders they work with but approved with another. Brokers do a tremendous amount of work on your behalf and make far less of your money than a real estate agent. Agents argue that their fees don’t cost the buyer anything. Actually the buyer pays those fees every month for as long as they own that home. The agent’s fees are financed into the loan because they are paid from the sales price of the home.