FHA Announces Some Big Changes!

I wanted to let you know that FHA Commissioner David Stevens made some big announcements today.  FHA’s capital reserves are evaporating, and they’ve been working on some solutions for a while now.  In the announcement, they stated the goal of “trying to better position the FHA to manage its risk while continuing to support the nation’s housing market”.

Here’s a link to the press release, and below are some highlights.

Higher Mortgage Insurance, Larger Down Payments, Higher Fees

It’s going to get tougher to qualify FHA borrowers. Key changes coming are:

• upfront Mortgage Insurance Premium fee increased from 1.75% to 2.25%
• reduction of maximum seller contributions from 6% to 3%
• Congressional request to increase maximum monthly mortgage insurance premiums from 0.55% 

One key item was missing: The widely speculated notion that down payment minimums would increase from 3.5%. Homebuyers can still access the market with just 3.5% down. However, the new guideline requires a 580 FICO score to be eligible for 3.5% down. Lower FICO borrowers will need a 10% down payment.

Get Familiar with ‘Investor Overlays’

But just because FHA will allow a 580 FICO doesn’t mean banks will approve a 580 borrower. Banks use FHA Guidelines as a base for their own underwriting rules, which are often more strict. FHA is on the prowl for lenders who approve FHA loans that result in higher than average default rates – and cancelling them from FHA lending. So banks have good reason to create ‘investor overlays’ rather than approve loans right at the brink of non-approval.

With the new focus on policing FHA approved lenders, ‘investor overlays’ will be a hot topic for the coming year. Guidelines are going to vary between banks, and not all banks will approve the same deal.

RPM is a HUD-approved lender, and we underwrite and fund from our own accounts. We work with the largest FHA lenders in the nation, so your clients need to apply only once and we’ll align them with the bank source that hasthe best pricing and least overlays.

Timing

These changes are expected to be effective in the spring. Official dates should be announced tomorrow.

Thank you,
John

John C. Glynn, CMPS
RPM Mortgage
415 674 1283 direct
866 898 0227 fax
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$1 million Oakland condo sells at The Ellington

Could this be a sign of better times ahead? The San Franscisco Chronicle has posted on their ‘On the Block’ segment that for the first time since October 2008, an Oakland condo has sold for more than $1 million dollars!

The Ellington, in the soon-to-be-bursting Jack London Square, sold one of its two penthouse suites for $1.1 million on January 5th, giving many hope that the long-awaited real estate turnaround is upon us. The other penthouse – priced at $1.5 million – is in escrow.

This is great news ~ here’s the original posting:
http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?blogid=58&entry_id=55142

2005 – 2009: 94618 (Rockridge) Single Family Homes & 94607 (Jack London Square/West Oakland) Condominium Market Analysis

ARE THERE ANY BANK OWNED (REO) PROPERTIES IN BERKELEY, CA?

Yes, there are REO’s available for purchase in Berkeley.  The inventory fluctuates, but as of 1/5/2010, there are ten current REO listings:

1.  1648 Curtis Street, 3/2, 1423 sq.ft, listed at $499,900

2.  1055 Amito Drive, 4/3, 4160 sq.ft, listed at $1,025,900

3.  827 Channing Way, 3/1, 1007 sq.ft, listed at $399,900

4.  1050 Creston Road, 4/3, 2953 sq.ft, listed at $950,000

5.  1239 MLK Way, 3/1, 1211 sq.ft, listed at $634,900

6.  452 Boynton Avenue, 4/2, 2301 sq.ft, listed at $859,000

7.  1687 Thousand Oaks Blvd, 3/2, 2244 sq.ft, listed at $859,900

8.  6946 Bristol Avenue, 4/4, 4120 sq.ft, listed at $999,900

9.  3227 Boise Street, 4/1, 1129 sq.ft, listed at $309,900

10. 1243 Ashby Avenue, 4/2, 1614 sq.ft, listed at $254,000

For more details about any of these listings, or to receive free automated emails with new REO listings in Berkeley, please email Andy Read at aread@caldecott.com or call him at 510.594.2400 x 222.

WHAT BANK OWNED (REO) PROPERTIES ARE AVAILABLE IN AREAS LIKE ROCKRIDGE, ORINDA, LAFAYETTE, MORAGA, ALBANY, KENSINGTON, ELMWOOD, PIEDMONT & EMERYVILLE?

The multiple listing service (MLS) now has a designated field for a property to indicate if it is bank owned. It is possible to receive automated emails with these properties by city, zip code, Thomas Brothers’ map coordinates, etc. Please email Andy Read at aread@caldecott.com if you would like to receive these automated updates. Data for all cities in Contra Costa and Alameda County are available.