Changes Coming in FHA program

 

1. 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.

 2. 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.

3.  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.
   • 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

Great Project

Sherman & Co. agents are looking forward to entering a team of our agents in the 2010 RELAY FOR LIFE of KERR COUNTY. The event is scheduled for April 23rd & 24th. We will also be acting (in a small way) as one of the sponsors.

This is our first time to participate in this worthy event and we would encourage anyone to consider helping in the fight against cancer.

For what it is worth, our phone system IS upgraded and seems to be functioning fine. Good that it is because there does seem to be a stirring of activity. Amazing how external events (Tuesday election in Mass.) can effect attitudes clear down to Texas. While nothing has actually changed in the econnomy, the “idea” seems to be that a sense of better direction and control may be just around the corner.

Has anyone else noticed this? What are your thoughts?

Upgrade!

In this case, the office phone system. Good news is it means newer and better equipment. Bad news is our office phones will be “off” for several hours this afternoon while the work is completed. Thank God for cell phones.

Attitudes seem to be upgrading as well. Nice to see smiles and hear laughter once in a while. Agents going to closings and going on listing appointments. Both ends of the all important real estate pipe line. You keep your business going with one and pay for it with the other. It’s all the in between stuff that can sometimes get strange.

New Week – New Opportunity

Always grateful for another opportunity to make a living, this day and the whole week look very promising. This business has to rank among the leaders for requiring living by faith! Therefore, it is always nice to see evidence of good things to come. Today, we have sunshine hinting of a beauful week weather wise; and we have phones ringing and agents working feverishly on every aspect of the buying and selling process which always culminates in production throughout the week. Nothing happens by accident in this or any other business and I never want to fail to thank the One who created it all and grants me the privilege of working  in the middle of His creation. If I can assist, point in the right direction, or simply answer a question, drop your comment on me and lets see where it leads.

‘Skinniest House’ Sells for $2.1 million

A property dubbed New York City’s skinniest house sold recently for $2.1 million.The two-story Greenwich Village property is 9.5 feet wide and 42 feet long and has two bedrooms and two baths. The townhouse was listed last August for $2.7 million by Alex Nicholas, senior vice president of the Corcoran Group. It last sold in 2000 for $1.6 million. It is now for rent for $10,000 per month. I found this information in an Associated Press story from day before yesterday. It brings home the reality of the phrase, “Real estate is local.”  Curiosity is the only thing I can think of that would get anybody out here to look at a home 9 1/2 feet wide! Would you look?

New Year – New Rules

Jan.1 brought with it additional regulation from the federal government. As usual, this new way of doing business is intended to punish the (few) ones who used fraudulent activites to get their way (buy property) but;  the result is punishment for everyone in the buying process.

It began last year with a revamp of the appraisal process ; and now, has moved to the actual mortage companies with a  new “stamp of approval” necessary from the IRS in order to obtain final loan approval.

Early in the cyle of applying new regulations, it is not unusual to see the system bog down. That is exactly where we are today. Every mortgage lender with which Sherman & Co. has a transaction in process, has numerous approvals holding: waiting on the required IRS “stamp of approval.” It appears Congress, as is their habit, has passed rules without including guidance for implementaion. IRS is really not to blame! They have been handed something to do in an area where they have not previously been involved. They are struggling to implement “something” to meet the new regulation.

A year from now we probably will not think much about the new way of getting loans processed and we may not even recall these delays. WE MUST CHANGE, TOO! At Sherman & Co. we take our agency responsibilities seriously. When we are the Seller’s agent, we work very hard for the Seller’s interest. When we are the Buyer’s agent, we put the same kind of effort into representing the interests of the Buyer. We have already discussed the benefit to both Sellers and Buyers for us to be on top of what will be required from here on out and start early, early, early, letting clients know what is ahead in the real estate buying process. Our goal is satisfied Sellers and Buyers which would have to include timely transactions for all involved with no surprising delays!

Raise a question? Feel free to add a comment.

Warming Up…

Kerrville weather is warming up a little; now, if only the real estate market would warm up as well. I have to say, it is showing signs of life! Two nice listings for the agents to see tommorrow at the conclusion of the staff meeting. Both high dollar in great locations. The sad news is that I am spending most of today working on tax statements that will be converted to 1099’s by the end of this month! No exemptions for anyane when it comes to Uncle Sam!

Far from my first day “on the job,” it is, however, my first day on the blog! It is my hope to develop on going dialogs with anyone wishing to discuss real estate in Kerrville, Texas. Questions and comments alike are welcome and I hope the outcome will benfit all.

Call 257-3030 in Kerrville and you get the current time and temperature – and half the time it is sponsored by us, Sherman & Co., REALTORS®! Today, after years of providing the information, I learned that the temperature reading is taken from a piece of equipment on the roof of the phone company office in downtown Kerrville. That means that as I sit at my desk, I am looking across the parking lot at the very spot of the temperature. Sherman & Co. provides a lot of other usefull information, too. Try us on real estate sometime. I would be glad to address your query right here!