FHA Update: FHA loan after a bankruptcy, foreclosure or short sale.

You now have to wait only one year after a bankruptcy, foreclosure or short sale to qualify for an FHA loan. The period had previously been two years following a bankruptcy, and three years following a foreclosure or short sale. 

To qualify for this exception, borrowers will have to show that they experienced an "economic event" whereby their household income fell by 20% or more for a period of at least six months. They must also demonstrate that they have fully recovered from the event, and agree to complete housing counselling prior to closing. If you can not demonstrate the significant decrease in income which lead to the economic hardship, the normal wait periods apply.

FHA states: "As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage".

Call me for details regarding the full qualification requirements.

The full mortgagee letter is linked here: HUD ML 13-26

We hope that you and your family are enjoying the final days of summer. 

As we head into fall, let us know if there are any questions we can answer for you.

FHA update: New mortgage insurance payment durations

FHA Update:

For loans with FHA case numbers assigned on or after June 3, 2013, FHA will change the duration the annual MIP is collected.

For any mortgages with LTV greater than 90%, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first. 

For all mortgages regardless of their amortization terms, mortgages with LTV less than or equal to 90% LTV, the annual MIP will be assessed until the end f the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.

So in plain English and for majority of FHA borrowers: If you put less than 10% down payment, you will pay the annual MIP for the LIFE OF THE LOAN. If you put 10% or more down payment, you will pay the annual MIP for the first 11 years.

FHA also increased the FHA annual MIP in April 1, 2013.

Link to the full HUD Mortgage Letter 2013-04

Have a Wonderful Memorial Day

Join us this Memorial Day as we take the time to remember the brave men and women who have served and protected our country.

Freddie Mac Announces Immediate Availability of Streamlined Modification for Delinquent Borrowers

MCLEAN, VA--(Marketwired - May 13, 2013) -  Freddie Mac (OTCQB: FMCC) today announced it is making its new Streamlined Modification program immediately available to all eligible borrowers nationwide in order to expedite financial relief for potentially thousands of distressed families. Freddie Mac's Streamlined Modification program had originally been scheduled to start on July 1, 2013.

News Quote"Today, Freddie Mac is giving a green light to its mortgage servicers to speed up financial relief for potentially thousands of families with delinquent mortgages across the nation. Now mortgage servicers can send eligible borrowers their Streamlined Modification trial period terms as soon as they are ready and borrowers can modify their loans by making the three trial period payments on time. No borrower documentation is needed. Freddie Mac is focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure."

Following link directs you to the full announcement: Freddie Mac announcement

Following link directs you to the info site for the streamlined modification program: Freddie Mac Streamlined Modification