U.S. Housing officials hope to ease the impact on communities hardest hit by foreclosures with a one-year waiver of its rule against providing FHA-insured mortgages on homes resold within 90 days. Beginning Monday, Feb. 1, its good news for flippers – investors who acquire below-market properties that often need improvements, then quickly attempt to sell for a profit. They will now have a much larger pool of potential buyers – those first-time homebuyers or others who seek or need the backing of the Federal Housing Administration, FHA, to qualify for a mortgage.
Borrowers with federally-insured mortgages now don’t have to be late on their payments before qualifying for foreclosure help under an early relief program for those in “imminent default.” The Federal Housing Administration today announced that homeowners experiencing financial hardship can get loss mitigation assistance before they fall behind on mortgage payments. Previously, homeowners were not eligible for such assistance until after they had missed payments.
In new policies aimed at bolstering its depleted reserves, Federal Housing Administration officials today announced tougher measures for borrowers, including higher mortgage insurance premiums, tighter credit scoring requirements and higher down payments. The FHA also is reducing seller concessions to three percent, from six percent to diminish “incentives to inflate appraised value.” The agency is also implementing a series of “significant measures aimed at increasing lender enforcement.”
The Government National Mortgage Association, commonly known as Ginnie Mae, is transferring to one of its own servicers 6,700 loans – totaling $1.3 billion – that once belonged to the Long Island-based Lend America. It was the largest lender of mortgages backed by the Federal Housing Administration in the New York metro area before it was shutdown by federal authorities on Dec 1. The company was servicing about $1.8 billion in loans.
The Federal Housing Administration is clearing up some confusion about its new Good Faith Estimate (GFE) forms required of mortgage lenders, brokers and closing agents starting Jan. 1. The goal of the new forms is to expand and clarify disclosures to borrowers when applying for a mortgage, and by doing so promote better comparison shopping, U.S. Housing officials say. They project that the new form could save consumers an average of nearly $700 in mortgage costs.
Sen. Charles E. Schumer, D-New York, is asking the Federal Housing Administration to “aggressively” ensure that any legitimate and qualified Lend America borrower can secure a loan after this week’s shutdown of the Long Island-based mortgage servicer. Lend America, based in Melville, N.Y., shut its doors this week after the FHA withdrew its approval, citing fraudulent lending practices.
The Federal Housing Administration, its funds almost depleted from the mortgage lending crisis, is seeking approval for new policies that would require higher minimum credit scores, more upfront cash and higher annual premiums from borrowers.