Government-insured mortgages are about to get more expensive.

Government-insured mortgages are about to get more expensive.

The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced Wednesday that it will raise premiums by 10 basis points, or 0.1%, on most of the new mortgages it insures.

Translation: A borrower opting for a 30-year, fixed-rate mortgage who puts 5% or more down will now pay an annual insurance premium of 1.3% of their outstanding balance. And someone who puts less than 5% down will pay a premium of 1.35%.

The agency said it will also raise premiums for borrowers with jumbo loans — or loans of $625,000 or more — by 5 basis points, or 0.05%, and increase the minimum down payment requirement on these loans to 5% from 3.5%.

Related: 10 great foreclosure deals

FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78% of the principal balance. One exception will be for borrowers who put more than 10% down at the time of purchase.

Additional new policies include a requirement that any mortgage for an applicant with less than a 620 credit score and debt-to-income ratio above 43% must be underwritten manually. Lenders who want to issue loans to these applicants must be able to adequately document why they decided to approve the loans.

The agency also decided to put new restrictions on reverse mortgages, no longer permitting retirees to take such large, upfront payments.

Related: Where are the first-time homebuyers?

The changes are an effort to reduce the agency’s exposure to risky loans and bolster its financial reserves, which have been depleted due to high delinquency rates from the mortgage crisis. The agency did not say when the new rates will take effect.

Last spring, FHA increased both premiums and upfront costs on mortgages. Such hikes make it tougher for mortgage borrowers — especially first-time purchasers who can’t afford the large down payments most private lenders require today, according to Jaret Seiberg, a Washington policy analyst for Guggenheim Partners. “They are the ones most likely to turn to the FHA for credit,” he said.

And that could have a negative impact on the housing market overall. “You can’t have a healthy housing market without a constant influx of first-time buyers,” said Seiberg.

To view the original article, click here: http://money.cnn.com/2013/01/31/real_estate/fha-mortgage-premiums/index.html

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Foreclosure Crisis 'Now Well Past the Peak'

Foreclosure Crisis 'Now Well Past the Peak'

DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 14, 2013
Foreclosure filings continue their downward spiral, dropping to the lowest level in January since April 2007, according to RealtyTrac's latest report.

Filings — which include notices of default, scheduled auctions, and bank repossessions — dropped 28 percent in January year-over-year.

"We're now well past the peak of the foreclosure crisis," says Daren Blomquist, spokesman for RealtyTrac.

Still, the foreclosure problem has a ways to go: Filings remain at double the pace of 2005, and foreclosure auctions are on the rise in 26 states.

"It's likely that by this time next year, we'll start to see 2005-type, pre-crisis numbers again," Blomquist says.

The decrease in foreclosure starts in January was largely attributed to California, which saw a significant drop last month. Due to a new law in California that offers borrowers in default more protection, the state saw foreclosure filings fall 62 percent in January. The big drop made it the first month since January 2007 that California was not the leader in the nation in foreclosure filings — that state has been replaced by Florida.

Meanwhile, RealtyTrac also reported that bank repossessions were down 24 percent in January from year-ago levels, reaching their lowest ebb since February 2008 and putting it below half of the record amount set in September 2010.

Source: RealtyTrac and “Foreclosure Filings Fall to Lowest Level Since 2007,” CNNMoney (Feb. 14, 2013)

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Home Prices Rise to Six Year High

Home prices, including distressed properties, soared by the largest gain since May 2006, rising 8.3 percent in December on a year-over-year basis, according to the latest housing figures from CoreLogic. This is the tenth consecutive month for increases in nationwide home prices, according to CoreLogic.

When foreclosures and short sales are excluded from the mix, home prices rose 7.5 percent year-over-year, according to CoreLogic.

Nearly every state posted gains in December, except for Pennsylvania, New Jersey, Illinois, and Delaware.

The following states posted the highest gains in December in prices, when including distressed sales:

Arizona: 20%
Nevada: 15.3%
Idaho: 14.6%
California: 12.6%
Hawaii: 12.5%
“We are heading into 2013 with home prices on the rebound,” says Anand Nallathambi, CoreLogic president. “All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”

To view the original article, click here: http://realtormag.realtor.org/daily-news/2013/02/06/corelogic-home-prices-post-largest-gain-in-6-years


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Will Lenders Begin to Require 20% Down

Several government agencies are reviewing data to determine what will be the minimum down payment required under the new Qualified Residential Mortgage (QRM) guidelines scheduled to be revealed in the next few months. In the original Mortgage Market Note issued by the FHFA, it was suggested that loan-to-value (the percentage of the overall purchase price which was being borrowed) was a major factor in determining if a loan would default:
“For most origination years, requirements for borrower credit score and loan-to-value ratio are the factors that most reduce the ever-90-day delinquency rate of mortgages acquired by the Enterprises that would have met the proposed QRM standards.”
The note then made the following proposal:
“An LTV ratio qualified residential mortgage must meet a minimum LTV ratio that varies according to the purpose for which the mortgage was originated. For home purchase mortgages, rate and term refinances, and cash-out refinances, the LTV ratios are 80, 75, and 70 percent, respectively.”
Basically, the original note suggested that a 20% down payment should be the new guideline. We realize that there has been much debate on this issue since and that the minimum down payment required under the new QRM guidelines will probably be less than 20%. However, we can’t know for sure.
Bloomberg reported last week:
“The six regulators drafting the separate QRM rule, including the Department of Housing and Urban Development, the Office of the Comptroller of the Currency and the Securities and Exchange Commission, must decide whether to include such a requirement — and whether to make it less than the 20 percent they originally proposed.”
Will it be more difficult to qualify for a mortgage after the new QRM rules are announced? Probably
As David Stevens, President of the Mortgage Bankers Association said during a speech in Washington on Jan. 16:
“I have consistently warned of the regulatory tidal wave to come and it’s finally upon us. These changes will impact business operations and the future of mortgage access for years to come.”
To view the original article, click here:http://www.kcmblog.com/2013/01/23/will-20-soon-be-the-minimum-down-payment-on-a-home/

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Pent-up Demand Fueling Home Market Jump

Monday, February 11, 2013 — The national median home price saw the strongest year-over-year increase in seven years as a growing number of metropolitan areas posted higher median values in the fourth quarter of 2012, the National Association of Realtors said.

Favorable affordability conditions, increasing rent rates, demand for housing and job creation are some of the drivers leading to solid home price performance, said chief economist Lawrence Yun at NAR.

“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” he said. “Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”

The median existing single-family home price rose in 133 out of 152 metropolitan statistical areas (MSAs) based on closings in 4Q12, compared with the previous year. Additionally, 19 areas had prices drop, NAR said.

The national median existing single-family home price hit $178,900, up 10% from last year. This is the strongest year-over-year price increase since the fourth quarter of 2005, when the median price rose 13.6%.

A contracting market share of lower priced homes continues to account for price growth.

For instance, distressed homes accounted for 23% of fourth quarter sales, down 30% from the previous year, according to NAR.

Total existing-home sales, including condominiums and single-family homes, increased 5% to a seasonally adjusted annual rate of 4.9 million in 4Q12, compared to 4.66 from the previous quarter. Additionally, existing-home sales were 12.1% above the 4.37 million pace during the same quarter of last year, the report noted.

Additionally, there were 1.82 million existing homes available for sale at the end of the fourth quarter, down 21.6% from a year earlier. Unsold inventory is at the lowest level since Jan. 2001, NAR said.

“In reality, home prices overcorrected on the downside and homes in most of the country were selling for less than replacement construction costs, which means they were undervalued,” said President Gary Thomas of NAR.

He added, “At the same time we’ve had record low mortgage interest rates and slow but steady improvements in median family income. Combined, these factors boosted housing affordability conditions to the highest on record in 2012.”

Regionally, all existing home sales improved, with the most expansion in the West, increasing 5.9%. This region is most impacted by limited housing supplies, NAR noted.

Similarly, existing-home sales in the Northeast increased 2.2%, the Midwest also rose 5.6% and the South grew 5% in 4Q12.

NAR’s national annual Housing Affordability Index, which breakouts for metro areas, soared to a record high 193.5 in 2012 from 186.4 in 2011.

The index is calculated on the relationship between median home price, median-family income and average effective mortgage interest rate.

Metro areas with the greatest housing affordability conditions included the Detroit-Warren-Livonia, Mich., with an index of 571.1 and Lansing-East Lansing, Mich., at 397, according to NAR.

Even with rising home prices, conditions are expected to remain favorable with the index averaging 161 in 2013, Yun said.

He added, “The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means.”

To view the original article, click here: http://www.housingwire.com/news/2013/02/11/pent-demand-fuels-home-sales-nar

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Former “Foreclosure King” Faces Bar Discipline

Tuesday, February 5, 2013 — A former foreclosure attorney known for living a luxury lifestyle while engaged in one of Florida’s largest foreclosure robo-signing scandals is now facing disciplinary action from the Florida Bar Association, according to documents from the organization.

David J. Stern was known in Florida as much for his luxury lifestyle of yachts and courtside seats at basketball games as he was for the trail of legal issues that surrounded the foreclosure law firm he manned until facing the loss of Fannie Mae and Freddie Mac’s business and allegations from Florida’s then attorney general of sloppily handling foreclosures.

The other Florida area law firms under fire at the time included Shapiro & Fishman, Florida Default Law Group and the Law Offices of Marshall C. Watson.

But David J. Stern became one of the most well-known names in the wake of the robo-signing, foreclosure document mishandling scandal. Numerous lawsuits were filed after Fannie Mae, Freddie Mac and top servicers dumped the law firm in the wake of the AG’s investigation.

Documentation issues tied to the firm’s work continued to plague individual foreclosure cases last year, well after David J. Stern had already exited from the practice of handling foreclosures.

It’s not specific how the Florida Bar’s rulings will impact Stern. However, under the rules he is accused of violating, the list of potential disciplinary actions includes everything from probation to suspension and disbarment.

As of Feb. 5, the Florida Bar Association had Stern listed as in good standing on its website, but that could easily change with the findings of probable cause for discipline released in just the past few days.

To view the original article, click here: http://www.housingwire.com/news/2013/02/05/floridas-foreclosure-king-attorney-faces-bar-discipline

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