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Purchase Data Sheet

To see the FHA Up Front and Annual Mortgage Insurance Premium, fill in the form below and click the Calculate button.

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HUD Announces Two Changes to Mortgage Insurance for 2013

Please note that these changes are proposal to be implemented sometimes in year 2013 and have not been implemented yet
 

Proposed FHAs Changes effective 2013:

HUD has released its annual audit results ( http://goo.gl/TJ9LA ) with two surprises highlighted.

One, in reversing the long-established policy of a prior Administration that FHA mortgage insurance (MIP) is cancelled at 78% of the original value, FHA will require that the MIP remain on all FHA loans for as long as the loan is an FHA-insured loan. In other words, the MIP remains until the mortgage is paid off entirely. The reason for the change is straightforward: FHA loans carry the insurance for the life of the loan but the payment for the insurance ends at 78% of the original value, so FHA has faced foreclosures that have no insurance premiums still being paid, harming the insurance fund.

Unfortunately, carrying the MIP for the life of the loan will impair the finances of the borrowers FHA strives to help. I have written to the head of FHA with the suggestion of an alternative to this drastic step: have the loans originated with an end to the FHA insurance (such as today's 78% LTV) that will coincide with the end of the charge for MIP. It doesnt have to be at 78%; it could be 75% or 70%, as long as the lender agrees to the removal of the insurance at the agreed LTV. This is how private mortgage insurance works and is quite easy to implement.

The second surprise is that HUD expressed the intent to increase the annual MIP another .10% (10 basis points). This comes on the heels of periodic increases since the real estate crisis began. It is designed to increase FHAs capital levels, which have fallen dangerously low due to foreclosures of loans originated prior to 2010. Loans since that time perform well and are actually adding to FHAs capital position.

The dates of these changes are loosely described as 2013, so at this point its a good idea to let buyers, as well as family or friends who might look to refinance to a new FHA loan, know that its wise to take action soon. With FHA financing, the transaction only needs to be started (having the FHA case number) in order to lock in the existing structure.

FHAs Changes effective 4/9/12:
To see the FHA MIP and UFMIP Rate Changes that went in effect on April 4th 2012, please see http://www.texasfivestarrealty.com/FHA_changes_2012-04.asp

Equal Housing Opportunity Commission Bahman Davani REALTOR

Bahman Davani, CM
Broker/REALTOR
ABR, GRI, CDPE, SFR,
TAHS, eAgentC, and
CCIM Candidate

Office: (214) 457-7055
Cell: (214) 457-7055
Fax: (972) 596-7984

P.O. Box 261665
Plano, TX 75026-1665

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Texas Five Star Realty
P.O. Box 261665
Plano
, TX 75026 US
Phone: 214-457-7055
Website: www.texasfivestarrealty.com/

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