As of April 1, potential borrowers with ongoing credit disputes totaling more than $1,000 are no longer eligible for mortgages insured by the FHA.
Under the rule, borrowers must either pay off the outstanding balance on these collections accounts or document a payment arrangement that the lender must then submit to the FHA before closing. The payment arrangement will be counted into the debt-to-income ratio for the new home loan.
The rule excludes disputed accounts from more than two years ago, along with those related to theft. But the lender must document an identity theft or police report on the fraudulent charges.
An FHA spokesman said the rule was designed as another protection for the FHA emergency fund. The fund levels slipped to 0.2 percent of at-risk insurance last year, well below the 2 percent mandated by Congress. The FHA raised insurance premiums on April 1 as well to boost the fund by $1 billion.
http://www.housingwire.com/news/fha-deny-mortgage-backing-credit-disputes-above-1000
HUD and the U.S. Dept. of the Treasury released the December edition of the Obama Administration’s Housing Scorecard this week. Data in the Scorecard show some subtle improvements in the market over the past year, but underscore fragility as the overall outlook remains mixed. For example, new and existing home sales rose compared with the prior month and remain higher than a year ago, and homes are more affordable than they have been since 1971. Median-income families today have nearly double the funds needed to cover the cost of the average home. However, home prices showed a slight dip from the prior month and remain below year ago levels.
The December Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:
- More than 5.5 million modification arrangements were started between April 2009 and the end of November 2011 – including more than 1.7 million HAMP trial modification starts and more than 1.1 million FHA loss mitigation and early delinquency interventions.
- Nearly 910,000 homeowners have received a HAMP permanent modification to date, saving an estimated $9.9 billion in monthly mortgage payments. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.6 million proprietary mortgage modifications through November.
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The New York Times
With most lenders requiring borrowers to put down at least 20 percent as a down payment – unless using an FHA or VA loan, or purchasing mortgage insurance – the best holiday gift some people might receive would be help with a down payment on a house.
Making sense of the story
- According to a survey by Trulia, the biggest barrier to buying a home these days is saving for the down payment. The survey, conducted over the summer, found that 51 percent of renters said coming up with money for the down payment was preventing them from buying, while 35 percent identified qualifying for a mortgage as the stumbling block.
- Under federal tax law, each individual is permitted to give money or valuables worth up to $13,000 to a single recipient in a calendar year. A married couple could jointly bestow up to $26,000 a year per recipient.
- According to one financial planner, there also is the option of lending a relative or close friend the money for the down payment, or the closing costs, then forgiving the loan in a future year. The recipient would have to pay interest on the loan until it was forgiven, at which point it would become a gift.
- Another way to help with the down payment is to pay other expenses, such as tuition, thereby freeing up money to make a home purchase. Gifts for educational or medical expenses are not subject to taxes, as long as they are paid directly to the educational or medical institution.
- However, prior to giving the money, gift-givers should consider their own financial picture, and they should make sure the recipient is responsible and not behind on other payments that could be subject to debt collection.
HUD recently launched a new web-based mapping tool displaying the location of all foreclosed properties held by Fannie Mae, Freddie Mac, and the FHA. The foreclosed homes collectively account for nearly half of all real estate-owned or REO properties in the U.S. HUD’s REO Portal is intended to help local communities, home buyers, and responsible investors acquire foreclosed properties and accelerate efforts to stabilize local housing markets.
The REO Portal’s enables users to search a specific address or neighborhood, as well as estimated delinquency counts. In addition to mapping individual properties, the portal provides consolidated listing for user-defined neighborhoods with details such as list date, price, number of bedrooms, bathrooms, and links to Homepath (Fannie Mae), Homesteps (Freddie Mac), and HUD Homestore (FHA) to connect potential buyers to the acquisition process.
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The Obama administration is ramping up talks on how to revive the housing market, which is weighing on the economic recovery.
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http://online.wsj.com/article/SB10001424052702304584404576440033488980192.html?mod=WSJ_RealEstate_LeftTopNews
