| HUD No.10-016 Melanie Roussell |
FOR RELEASE Wednesday January 20, 2010 |
FHA Announces Policy Changes to Address Risk and Strengthen Finances
- Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
- The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
- If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
- This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
- The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
- Update the combination of FICO scores and down payments for new borrowers.
- New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
- This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
- This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
- Reduce allowable seller concessions from 6% to 3%
- The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
- This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
- Increase enforcement on FHA lenders
- Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
- This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
- Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
- Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
- This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
- Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
- Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
- HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
- Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
- Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches
- Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov
Foreclosure Vs. Short Sale Trends Report: December 2009
During Q2 2009 Short Sale settlements increased to 23,102, a 34.8% jump from the previous quarter. Banks and thrifts implemented nearly 3.4 times more home retention actions-than completed foreclosures. Read more at http://tinyurl.com/ykfadna or click on the box below.
Date 11/16/09
Market Area: Montgomery County, MD 20854
Time Frame: 5/16/09 – 11/16/09
General Market Conditions:
Current Market Condition: Slow
Employment Conditions: Declining
Market Price for This Zip Code Has: Decreased By 4.51% in the past 60-days
There is an over supply of active listings.
Number of active listings: 225
Number of units that are Short Sale Listed in MRIS: 4
Number of units that are REO or Corporate owned Listed in MRIS: 2
Market Activity
Range of values is $379,000 to $9,900,000
Normal marketing time is: 96 Days.
Resale Comments: My independent MRIS research shows that there are currently 225 homes on the market in the 20854 zip code. Most of these homes are overpriced or are in less than ideal condition that do not attract buyers and just sit on the market. The average day’s on the market for these active properties is 180. There currently are 76 properties under-contract. These buyers have found and are expecting and getting a great value-a good home at a good price and with all the competition for their attention, they have a lot of choices. These buyers are really picky. There were 65 properties that sold in the last 60-days. The average day’s on the market was 98. Buyers have a sense of what’s fair market value and what’s not and they just won’t show up if sellers are not in the ballpark. There is currently 5 months of inventory on the market in 20854 zip code. It’s very important that sellers price their home correctly and competitively. Buyers are looking for value pricing and if sellers don’t meet these expectations, they’ll be overpriced and overlooked.
Prepared By:
Aaron Rice, CDPE, CLHMS, CRS, GRI, SHS
www.LuxuryDistressedPropertyExpert.com
443-244-0051
Luxury Foreclosure Trends Report: Baltimore City, MD 21224
Date 10/15/09
Market Area: Baltimore City, MD 21224
Time Frame: 4/15/09 - 10/15/09
General Market Conditions:
Current Market Condition: Slow.
Employment Conditions:Declining.
Market Price for This Zip Code Has: Decreased By 4.56% in the past 60-days.
Estimated Percentages of Owner vs. Tenants in Neighborhood: 50% Owner Occupant 50% Tenants.
There is an over supply of active listings.
Approximate number of units for sale is: 593.
Number of units that are Pre-foreclosure stage: 10 (not listed in MRIS).
Number of units that are Short Sale Stage: 64 (listed in MRIS).
Number of units that are REO or Corporate owned: 30
Market Activity
Range of values is $25,000 to $650,000.
Normal marketing time is: 118 Days (last 6 months).
Resale Comments:
My independent MRIS research shows that there are currently 593 homes on the market in the 21224 zip code. Most of these homes are overpriced or are in less than ideal condition that do not attract buyers and just sit on the market. The average day's on the market for these active properties is 160. There are currently 162 homes under-contract. These buyers have found and are expecting and getting a great value-a good home at a good price and with all the competition for their attention, they have a lot of choices. These buyers are really picky. There were 126 homes that sold in the last 60-days. The average day's on the market was 98. Buyers have a sense of what's fair market value and what's not and they just won't show up if sellers are not in the ballpark. There is currently 8.06 months supply of inventory on the market in the 21224 zip code. It's very important that sellers price their home correctly and competitively. Buyers are looking for value pricing and if sellers don't meet these expectations, they'll be overpriced and overlooked.
Prepared By:Aaron Rice, CDPE, CLHMS, CRS, GRI, SHS
www.LuxuryDistressedPropertyExpert.com
www.MyForeclosureAlternative.com
443-244-0051
Luxury Foreclosure Trends Report: Howard County, MD 21794
Date 10/11/09
Market Area: Howard County, MD 21794
Time Frame: 4/11/09 - 10/11/09
General Market Conditions:
Current Market Condition: Slow.
Employment Conditions:Declining.
Market Price for This Zip Code Has: Decreased By 3.73% in the past 6 months.
Estimated Percentages of Owner vs. Tenants in Neighborhood: 100% Owner Occupant 0% Tenants.
There is an over supply of active listings.
Approximate number of units for sale is: 21.
Number of units that are Pre-foreclosure stage: 2 (not listed in MRIS).
Number of units that are Short Sale Stage: 3 (listed in MRIS).
Number of units that are REO or Corporate owned: 1
Market Activity
Range of values is $400,000 to $965,000.
Normal marketing time is: 192 Days (last 6 months).
Resale Comments:
My independent MRIS research shows that there are currently 21 homes on the market in the 21794 zip code. Most of these homes are overpriced or are in less than ideal condition that do not attract buyers and just sit on the market. The average day's on the market for these active properties is 147. There are currently 4 properties under-contract. These buyers have found and are expecting and getting a great value-a good home at a good price and with all the competition for their attention, they have a lot of choices. These buyers are really picky. There were 6 properties that sold in the last 60-days. The average day's on the market was 184. Buyers have a sense of what's fair market value and what's not and they just won't show up if sellers are not in the ballpark. There is currently 9.13 months supply of inventory on the market in the 21794 zip code. It's very important that sellers price their home correctly and competitively. Buyers are looking for value pricing and if sellers don't meet these expectations, they'll be overpriced and overlooked.
Prepared By:Aaron Rice, CDPE, CLHMS, CRS, GRI, SHS
www.LuxuryDistressedPropertyExpert.com
www.MyForeclosureAlternative.com
Avg List Price $249,856 Avg List Price $259,913 “Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”
