Here we go again with additional changes in the already trouble world of Mortgage.  It seems that the only thing that is certain is that the mortgage industry is going to continue to change.  If you are considering the sale and purchase of a home it is crucial to speak with a LOCAL Lender that can walk you thru this very complicated process. 

I say LOCAL because many consumers have used mortgage institutions over the internet only to find that the loan does not close or the fees have drastically changed.  Work with your Realtor because they will usually have a recomendation of someone that they already have a relationship with.

TEAM DECELL is your neighborhood experts.  We assist clients in buying or selling their home in Frisco, Plano, McKinney, Allen and the Surrounding Area. We also have relationships with Lenders that have a proven track record and can get the job done in a painless and timely manner.  Don’t let the inexperience of others spoil your Home Purchase.  We have a team of experts that will take care of your needs.  Below are the upcoming changes.

1. Mortgage insurance premium (MIP)  increased to build up capital reserves and bring back private lending.
   1. FHA will raise the up-front MIP to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   2. 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.
   3. This will allow for 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
   4. 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.

1. Update the combination of FICO scores and down payments for new borrowers.
   1. 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%.
   2. This allows FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   3. 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.

1. Reduce allowable seller concessions from 6% to 3%
   1. 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.
   2. 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.

1. Increase enforcement on FHA lenders
   1. Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
   2. Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
   3. Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
   4. HUD is pursuing legislative authority to increase enforcement on FHA lenders.