Fence-Sitting Homebuyers Face FHA Fee Hike Deadline

Fence-Sitting Homebuyers Face FHA Fee Hike Deadline

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by Jann Swanson

Both applications for FHA-guaranteed mortgages and FHA endorsements were lower in January than in the previous month or in January 2010. Reduced loan demand was reflected across all subsets, purchases, refinances and mortgages for first-time buyers.
Applications for FHA mortgages totaled 103,991 in January compared to 112,500 in December and 126,043 a year earlier.  The year-over-year figure reflects a drop of 17.5 percent.  There were 55,417 applications for mortgages to purchase homes and 41,178 to refinance.  This was a 3.4 percent decrease in purchase applications since December and a 21.6 percent change from January 2010.  Applications to refinance were down 12.1 percent quarter-to-quarter and 16.9 percent over the longer period.
FHA endorsed 119,521 mortgages in January compared to 133,603 in December and 158,612 in January 2010.  January numbers are lower by 10.5 percent and 24.6 percent respectively.  Purchase mortgages totaled 63,887 compared to 66,165 (-3.4 percent) and 90,030 (-29 percent) in the earlier periods.  47,429 (74.2 percent) of the purchase mortgages went to first time buyers compared to 48,539 (73.4 percent) and 90,030 (56.8 percent) in December and in January 2010.
Home Equity Conversion (HECM) or so-called Reverse Mortgages for senior citizens represented 5.4 percent of FHA endorsements compared to 4.9 percent in December and 4.8 percent a year earlier.
Year-to-date figures also show a substantial decrease in activity between FY 2010 and FY 2011.  Total applications are 26.7 percent lower with purchase mortgages down 34.3 percent and refinancing off 22.1 percent.  Total endorsements are 24.1 percent off of the 2010 pace with most of the fall-off accounted for by the purchase sector which was down 34 percent.  Refinancing endorsements dropped 8.1 percent and HECM endorsements are at -23.3 percent the 2010 level.
Mortgage Insurance -in-Force in January totaled 5,882,984, an increase of 1 percent month-over-month and 16.3 percent over the January 2010 total of 5,917,805.  The total unpaid principal balance amount is $947.8 billion.  The portfolio has a current delinquency rate of 8.9 percent with 612,443 loans over 90 days delinquent.   In December the rate was 8.8 percent and one year earlier it was 9.2 percent.
The weighted average FICO score for FHA mortgages was 703, one point higher than the previous month and nine points above the score a year earlier.  
FHA took an average of 5,735 applications per day in January.  The average processing time from application to closing was 8.1 weeks, up from 7.6 in December but about the same as a year earlier and 4.0 weeks from closing to endorsement, 1.3 week less than a year ago.
These figures are from the Single-Family Operations Report for January issued this week by the Department of Housing and Urban Development.  FHA mortgages have risen dramatically in popularity since the beginning of the housing crisis but the agency has also raised upfront and annual premiums in the past year. Declining loan demand in January is no surprise given the uptick in mortgage rates we witnessed. Rates are now off those highs but loan production has yet to pickup.  We are curious to see how the FHA's decision to raise the annual mortgage insurance premium will impact loan demand before the new fee structure goes into effect on April 18th.
Perhaps buyers will rush to beat the deadline?

Looking For Port Charlotte | Punta Gorda Bank Foreclosure Homes

Looking For Port Charlotte | Punta Gorda Bank Foreclosure Homes

Many new real estate investors want to buy foreclosure homes directly from the bank. The attraction to Port Charlotte | Punta Gorda bank-owned properties is understandable, as you borrow money from the bank to purchase a home. It is natural to assume that the bank owns the home; however, whether through a Deed of Trust or Mortgage, the title to your home is either held by a third party or pledged as security for the loan. So, in fact, the bank does not actually own the foreclosure home at all.
You borrow money from and give mortgage to the bank. The mortgage is the security instrument utilized to protect the bank from loss should you default on the home loan. Unless you bought a bank foreclosure home directly from the bank, the bank has never owned the foreclosure home at all.

Find Port Charlotte | Punta Gorda Bank Foreclosure Homes

The Foreclosing Lender’s Profits

The goal of the foreclosing lender is to gain possession of the foreclosure home. The financial goal of the lender is the recovery of the principle loan balance, accrued interest, late fees, and penalties, taxes paid on behalf of the home owner, court costs and attorneys’ fees.  In most states, the laws are written so that the mortgage lender can only attempt to recover these widely accepted standard losses.
The mortgage lender will add in every legitimate expense when foreclosing on a home. This is what is sued for: the total the mortgage lender claims is owed by the owner of the Port Charlotte | Punta Gorda foreclosure home. In most states, this is the maximum amount the mortgage lender can collect. The laws are written this way to protect homeowners from unfair practices.
The commonly held notion is that a bank (or any other lender) must sell a foreclosure home for the same amount it cost in order to gain possession of the home and, therefore, cannot make a profit. This is false. If the foreclosing lender is the successful bidder on the foreclosure home at auction, it will take possession of the foreclosure home for the very first time. When this happens, all the rules change. The lender, now the legal owner of the foreclosure home, can do anything it wants with the home, including sell the foreclosure home for any amount it desires.

NEED A LOCAL Port Charlotte | Punta GordaRealtor?

Buying A Port Charlotte | North Port home is a big decision.

There is no doubt that buying a Port Charlotte | North Port home is a big decision. A home is the most important, and most expensive, single item most people will purchase in their lifetimes, and getting the best deal on a home loan can save you thousands of dollars over the life of the loan.

If your credit is less than stellar, then find a house to buy can be even more of a challenge. While those whose credit is perfect will be likely to qualify for those eye popping low rates advertised by the banks, home buyers with bad credit will have few options and be subject to higher interest rates, higher down payment requirements and higher monthly payments. So, how do you buy a house with bad credit?

One of the most important steps to take if your credit is less than perfect is to get pre-qualified for a Port Charlotte | North Port mortgage before you begin shopping for a home. While it is important for any home buyer to pre-qualify for a mortgage, it is even more important for those with bad credit. When you pre-qualify for a mortgage loan, you will know up front exactly how much you can borrow. This means that you can tailor your home search to only those properties in your price range. You will not waste time looking at properties that you cannot afford to purchase.

Getting a copy of your free credit report, and trying your best to clean up the negative information, is also an important step to take before you begin trying to find a home and a mortgage. While it is very difficult to remove legitimate negative information from a credit report, it is entirely possible that your credit report contains errors. A recent survey by a consumer rights organization revealed that 7 out of 10 credit reports reviewed contained at least one error. You can get help to repair your credit and improve on your credit score.

The prospective home buyer should be sure to request a copy of their credit report from all three major credit reporting agencies, TransUnion, Experian and Equifax. Under a new law amendment to 'Fair Credit Reporting Act', all consumers are entitled to get one copy of their credit report free each year. Check with the credit-reporting agency to see if you are entitled to one of these free reports. Once you have the reports in hand, be sure to review it carefully and immediately report any errors you find. Cleaning up any problems you find will help improve your credit score and help you get the best possible interest rate and terms on your home mortgage loan. For example, by merely increasing your credit score from 570 to above 620 will lower the interest rate by up to three-quarters of a percentage point!

You may decide to wait for six months to a year to see how your credit score shape up in order to obtain a better interest rate on your loan. However, depending upon the housing prices movement in your area, waiting for more than a year before buying a Port Charlotte | North Port home  may cost your spending 5% to 15% more than what it would cost you today! Therefore, you are advised to consider various factors, housing prices trend and credit score, to find the best time to buy your home.

Once your credit is as good as you can make it, now it is time to start shopping around for the best mortgage loan. While you may not qualify for the best rates, but mortgage loan rates can still vary from lender to lender. Be sure to shop around at local banks, credit unions, savings and loan associations and mortgage brokers. Be sure you understand all the terms and conditions, including any fees or extra costs.

There is no denying that buying a home with bad credit makes finding a mortgage loan more of a challenge. But bad credit is no reason to abandon your dreams of home ownership. Some advance planning and hard work will allow you to buy the home you need, even if your credit is less than perfect.