FHA Tightening Up on Loans

Dave Stevens, the newly-appointed head of the Federal Housing Administration, recently shared these facts about the current housing market:

Some of the pertinent facts about the market that Dave brought out in his presentation were:

• “90% of all residential loans originated in the first quarter of 2009 were sold to either Freddy Mac or Fannie Mae
• 80% of insured loans in 2009 were to first-time Buyers (So it looks like the tax credits to these Buyers did work)
• FHA did a “terrible job” of monitoring lenders. Within the past 6 months, FHA has suspended the licenses of 359 lenders …That’s more than all of the suspensions since the year 2000.
• The cost of FHA insurance to Borrowers has been increased by 35%. This represents an increase in closing costs and monthly charges. The increase was to make up for the costs of foreclosures and short sales and to bring FHA’s charges into proper balance as a federal agency.
• When Seller concessions of up-to 6% were allowed, over 50% of the loans became delinquent. For that reason, FHA reduced the maximum allowable concessions to 3%.
• As of January 1, 2010, every loan officer must be licensed.”

The housing market is a HUGE market–and, as they say, it takes time to turn a big ship.  Signs are indicating that real estate markets continue to be “local markets” and the nation is still showing “soft” markets.

Because of these changes and trends, it is more imperative now that you seek wise counsel for real estate needs from a qualified & educated real estate agent.  We can be that agent for you.