Gulf Coast Associates' Blog: Mortgage Information

Yesterday, The Federal Housing Administration (FHA) announced several significant policy changes that are intended to help improve their increasing exposure to risk. Seems that rising defaults have hit the FHA's reserve funds hard; in fact, according to the Mortgage Bankers Association, 7.8% of FHA's loans were 90 days or more late or already in foreclosure at the end of the second quarter. While that's equal to the national average for other loan programs, it's up from 5.4% a year ago for FHA. In addition, the increased mortgage-based losses have pushed the agency to the point it is in danger of having its reserves fall below the 2% threshold mandated by Congress. Some officials believe it could happen before the end of this month. Options for the agency…

According to their annual loan closing costs survey, Bankrate.com had Florida ranked number two (tied with New York City) behind only Texas for being a high loan closing cost state. The new ranking was a step up for Florida after two years of being ranked in the number three position. So, while prices may be falling in Florida, home buyers will have to spend more to close on their new home purchases.

The study compared charges for loan origination fees, title and closing costs on a single family home purchase with a 20% down payment and a 30 year fixed rate mortgage of $200,000. It excluded taxes, other governmental fees and escrow fees. Nationwide, the average loan closing costs this year totaled $2,732, down from $3,118 in 2008.

This year's top ten…

Beginning August 15, FHA borrowers will be able to apply to reduce their monthly mortgage payments by seeking a loan modification through their current lender or loan servicer under the new FHA-Home Affordable Modification Program (FHA-HAMP). The Helping Families Save Their Homes Act of 2009 allows FHA to give qualified FHA-insured borrower's the opportunity to reduce their monthly mortgage payment by modifying the mortgage through the new program.

The program will permanently reduce a family's monthly mortgage payment through the use of a partial claim, which defers the repayment of mortgage principal through an interest-free subordinate mortgage. FHA-HAMP will allow lenders to set aside up to 30% of the total principal balance until the house is sold or…

Hardly a few days go by that we don't get an inquiry from either one of our industry peers or a prospective client as to why they can't get mortgage financing for their recent condo purchase. The reasons are many and in most instances very confusing. Especially if you're talking about buying a condo in Florida.

Since the majority of our lending business is now done within this state, I'm going to focus on the problems we are facing here with getting financing for a condo. However, many of the same problems exist in other areas of the country and thus may be applicable to your business too.

Primary residence and second home condo purchases are treated quite differently. The reasons for this are many and entirely too convoluted to go into in a blog post.…

The Florida Homebuyer Opportunity Program (FL HOP) - created during the 2009 regular legislative session - is scheduled to have funds available ($30 million) by the first week of August, 2009. The FL HOP program will be administered through the State Housing Initiatives Partnership (SHIP) program; offices are located in all 67 counties and 53 Community Development Block Grant (CDBG) entitlement cities. Eligible FL HOP applicants can receive up to $8,000 in purchase assistance, which is expected to be repaid by the applicant upon receipt of his/her federal tax refund from their federal first time homebuyer tax credit established through the American Recovery and Reinvestment Act of 2009.

Highlights and Exceptions of the FL HOP program include:

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We just wanted to give you all a reminder that beginning July 30, the Federal Reserve Board's new Mortgage Disclosure Improvement Act (MDIA) goes into effect. The rule will not only change the way the Truth In Lending Act (TILA) is disclosed to consumers, it may also lengthen the time it takes to get your clients home loans closed.

Highlights of MIDA's new requirements include the following:

• TILA disclosures apply to any closed-end extension of credit secured by the dwelling of a consumer including non-principal dwellings (second homes).
• There must be a seven-day waiting period between the date the initial TIL disclosure is provided to the consumer and disbursement of the loan.
• Any change to the initial APR disclosed in the original TIL…

The National Association of Realtors (NAR) released a preliminary analysis yesterday of how the Home Valuation Code of Conduct (HVCC) is impacting the housing market. As should have been expected, the numbers seem to reflect an adverse impact. I say this not only because of the numbers themselves, but because anyone who has been involved in the industry for a long time knows, when the government tries to use poorly thought out and knee jerk reaction legislation to influence outcomes, there are always unintended consequences.

The analysis of the report, "using a statistically representative survey of the membership" according to Jed Smith, Managing Director, Quantitative Research, showed the following:

• Approximately 76% of Realtors® representing…

The federal regulator overseeing Fannie Mae's and Freddie Mac's Home Affordable Refinance Program announced today they are raising the program's loan-to-value (LTV) maximum from 105% to 125% to allow more homeowners to hopefully take advantage of today's lower mortgage interest rates. Homeowners must be current on their payments and the loan must already be owned or guaranteed by Fannie or Freddie. In addition, the program will allow borrowers who made original down payments of 20% or more to refinance without having to obtain mortgage insurance. Borrowers who were required to have mortgage insurance won't be required to obtain any additional coverage either.

Fannie Mae and Freddie Mac will also offer pricing incentives (a 0.5 percent reduction in its…