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www.lasvegasmtg.com Report: FHA proposed changes for collections and disputes on credit reports.

by John Le Francois

www.lasvegasmtg.com Report: FHA proposed changes for collections and disputes on credit reports were to take affect on April 1,2012 but has now been delayed till July 1, 2012. The proposed changes are addressing disputes, collections and judgments that show on a credit report. FHA released mortgagee letter 2012-3 refers to the following: 

• Requires borrowers with collections with a combined total greater then $1,000 must be paid off including medical collections if the accounts are less then 2 years old activity date.
• Disputed accounts must be removed except for identity theft and or unauthorized use of account.
• Borrower must repay the debt off or enter in to a repayment plan and consistently made three consecutive payments.
• Judgments must be paid off but a repayment plan and three consecutive payments can acceptable.

Why the changes on disputed, collections and judgments to obtain a FHA loan?

”We found that many borrowers with mortgage payment delinquencies had prior credit deficiencies, including unpaid collections and unresolved disputed debts prior to the approval of their loan,” an FHA spokesperson said. “This change was made to eliminate this layer of risk to FHA-insured loans and help protect our insurance fund.”

With FHA under pressure from increases in claims due to mortgage defaults and foreclosures, it has become apparent to FHA regulators that increasing UFMIP and the Annual Mortgage Insurance Premium can not be the only answer to keep FHA loan guarantees being insolvent.

Collection companies and judgments being reported on credit reports has been shown to be inaccurate at least 76% of the time. This was the reason that FCRA (Fair Credit Report Act) was implemented so the consumer had the right to challenge inaccurate information that was being reported. With many unscrupulous collection companies re-aging old collection accounts in violation of the Fair and Accurate Credit Transactions Act of 2003 (FACTA) will the abuse only become more prevalent as a form of extortion to collect old debt? 24 states now allow collection companies to have arrest warants issued to collect debt owed to them. Recently a woman who survived breast cancer was falsely arrested for a $280 medical bill that was billed in error. 

Will this impact some consumers? The answer is yes, most definitely. Will this be a problem for FHA buyers in Las Vegas? Yes.

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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www.lasvegasmtg.com Report: Recent FHA changes impacting Las Vegas, NV.

By John Le Francois

www.lasvegasmtg.com Report: Recent FHA changes impacting Las Vegas, NV. has caused some home buyers to scale back their purchasing power due to increases in FHA Upfront Mortgage Insurance Premium (UPFMIP) going up from 1.00% to 1.75% and the annual mortgage insurance going up from 1.10 to 1.25% with a 3.5% down for a 30 year loan. This increase was implemented for all case numbers issued after April 12th, 2012.

For the first time HUD has implemented a two tier Annual Mortgage Insurance Premium that is dependent on the loan amount, LTV and the terms of repayment. On June 11th, 2012 there will be additional increases for counties that exceed greater then $625,000.00 purchase price.

When does the FHA Annual Mortgage Insurance Premium Decrease?

FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:

• Mortgages with terms 15 years and less and with LTV ratios 90%>, annual premiums will be canceled when the LTV ratio reaches 78% regardless of the amount of time the mortgagor has paid the premiums.

• Mortgages with terms > 15 years, the annual mortgage insurance premiums will be canceled when the LTV ratio reaches 78%, provided the mortgagor has paid the annual premium for at least 5 years.

• Mortgages with terms 15 years < and with loan to value ratios of 89.99% and less will not be charged annual mortgage insurance premiums.

In the next addition ofwww.lasvegasmtg.com  Report: FHA proposed changes for collections and disputes on credit reports.

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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www.lasvegasmtg.com Report: Help for FHA underwater home borrowers in Las Vegas Nevada will be coming on June 11, 2012 that had taken out a FHA loan prior to May 31, 2009. President Obama Administration on March 16th, 2012 announced  the new FHA Streamline program to help current FHA home owners to be able to refinance to the currently historically low rates that wasn't possible until now. This was due to the increased current Upfront Mortgage Insurance Premium and the annual premium that are currently in place.  

Recently I had pulled a farm list of FHA Home Owners for loan amounts above $150,000 and interest rates higher then 5.5% prior to May 31,2009 broken down by state and by Clark County. The results were staggering. In the State of Nevada there are 7,992 FHA loans that meet this requirement and for Clark County there are 3,993.

So how does one qualify for getting a FHA Streamline loan? I will layout the requirements.

1. FHA has to Endorse the loan prior to May 31, 2009. Endorsement is not the same time as applying for a FHA loan nor when the loan closes. Endorsements can take place several days after and up to weeks later after the closing of a loan. You will have to contact your current lender to make sure when the endorsement had taken effect.
2. You cannot have been late for the last 12 months or you will not qualify for this FHA Streamline program.  
3. You must currently have a FHA loan, It cannot be a Fannie Mae, Freddie Mac, or VA loan. 
4. The borrower must see a net tangible benefit of 5% or more to be able to qualify for the FHA Streamline Loan. In most cases this was not possible until the reduced UFMIP and the Annual Premium had been reduced for this special program.  The start date will be June 11th, 2012.

If the borrower can meet these requirements then the rest of the process is pretty easy.

1. No Income qualifications or employment verification's. If you have made the payments on time it is assumed you have the sufficient income to make the lower payments. 
2. No Credit reports or FICO scores. Will run a mortgage rating only to verify current payments.
3. No New Appraisals. Will use the appraised value at the time of original loan.
4. No verification of assets unless it is needed to close the loan.

FHA sweetens the deal with Concessions.

1. Currently the Upfront Mortgage Insurance Premimum is 1% of the loan amount (will be going up to 1.75% on 04/01/2012) but FHA loans that qualify based on the above criteria the UFMIP will only be .01%.
2. Currently the Annual Premium is 1.15% (also going up on 04/01/2012 to 1.25%) will only be .55%. 

Please contact me by e-mail to see how much savings you could potentially see.  

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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www.lasvegasmtg.com report: In a recent article from Wall Street Journal article written by Nick Timiraos it is reported that Freddie Mac has a message for homeowners who could pay their mortgage but have decided not to "Please do not default".

The problem that Freddie Mac and other investors have is many states in the country are a non recourse loans State. What is a non recourse Loan you say? Well it means the borrower can't be held liable for the default of the debt! Nevada is not a non recourse state so they can and will try to collect the debt. Tos see a list of Non Recourse and Recourse states.

Donald Bisenius who is the head of Freddie Mac single family credit guarantee business wrote in the Freddie Mac blog this argument on those that are thinking of a Strategic Default. You are going to hurt your Friends and neighbors because everyone knows that the only reason that property values have declined has been due to vacant properties. With every Strategic Default is going to rob the wealth of your friends and the ripple effect will further hurt the communities.

Donald Bisenius added this argument that the communities hit hardest will face tougher rules and higher costs in the future. Ultimately Freddie Mac realizes that Strategic Defaults are on the rise and the trend is going higher. The rise in Prime Jumbo's Strategic Defaults has increased 40% since 2007.

Donald in his blog extolled these words of advise to those that can pay the payment but are deeply underwater "just hold on till the values go back up!" The problem with this advise is even Freddie Mac thinks that values will continue to decline further in 2010.

Freddie Mac has outlined 4 risk to the housing Market in another article: Why Freddie Mac Sees Home Prices Falling

1) Freddie Mac sees a wave of new foreclosures due to the Obama's policy of moratorium to try to halt foreclosures and through the HAMP loan programs will ultimately result in new REO properties. With a larger inventory of banked owned properties this will bring prices down.

2) The April 30th Tax Credit expiring will create less demand.

3) Interest rates rising in 2010 will make homes more costly and remove a greater pool of eligible home buyers.

4) Lastly unemployment rate will still remain high in the near future.

With this information on declining values that Freddie Mac is predicting, does Donald Bisenius still feel that the advise to wait until prices go up is sound advise or is it self serving to stop the tide of Strategic Defaults?

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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www.lasvegasmtg.com Report: FHA Announces change in Fees effective this spring. The FHA announced Fee increase will raise the Mortgage Insurance Premium from 1.75% to 2.25%. FHA is also seeking legislative approval to raise the annual premium charge further from its current rate of .55% to a undisclosed percentage rate.  

FHA announced changes to the sellers concessions will be lowered from the current 6% of the sales price to a maximum amount of 3% of the purchase price.This will require for the borrower to come in with more money on lower end purchases because fees are typically running 4.5% on loans less then $100,000.00. With most first time buyers having little savings other then down payment this will create a problem for some potentially good borrowers.

FHA announced changes from the current no FICO score to a minimum FICO score to 580. FHA announced changes to the down payment requirement for score with a minimum score of 580 will be require a 10% down. While this seems reasonable most lenders and the investors that buy the loans in the secondary market have already raised the minimum FICO Score for FHA Loans to 620 and some lenders to 640. As most lenders will not do any loans less then 620 there probably be very view of these loans closed and is more political to show FHA is not the sub prime product that is being portrayed.

On December 3rd 2009 I wrote in a earlier blog " titled "FHA proposed changes and how it might affect The Market in Las Vegas, Nevada". that the changes were being proposed was due to the fact that FHA Mortgage Insurance funds had been reduced to .53% less then the Congress set amount of 2%.

With these changes and with future changes that are guaranteed to happen some qualified good borrowers will be priced out of their Dream Home!

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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Being a Mortgage Banker can be stressful at times, but what makes this job worth while is helping first time home buyers in Las Vegas, Nevada getting into their new home. First time home buyers are from diverse cultures and income, but they share one common characteristic. The joy of accomplishment when the get their keys to their very own home.

When the first time home buyer starts the process of getting pre approved they are unsure of the process. I counsel them on the 7 stages of the lending process, so that they have a strong understanding  of how the loan process from start to finish. It is my job to inform and educate the first time home buyers, and when they leave my office they feel comfortable knowing they are in good hands.

While no transaction is completely smooth from start to finish, with so many players involved in the transaction, it is the loan officer and his team that has to pull everything together. First time home buyers put their trust in the Real Estate agent they selected and the agent trust is with the loan officer that they work with.

Most of the first time home buyers that I have had the pleasure to work with have told me they never felt they would ever be able to buy a home. With the home prices falling to more affordable levels from the past highs, modest income first time home buyers can now afford the mortgage payment. The housing affordability has made a window of opportunity first time home buyers to stop flushing their money on rent, and instead pay for a mortgage at the same price or lower.

While FHA is the product of choice for most first time home buyers, the FHA product has easier qualifying ratio and lower down payment then conventional loans, there is another government loan program that is even better then FHA. The VA loan program for Veterans requires no down payment, and the government backs the loan. For first time home buyers Veterans that have incurred a service related disability does not have to pay for the VA funding fee if the disability is 10% or greater.

John Le Francois
Mortgage Banker
www.lasvegasmtg.com
Direct Access Lending
650 White Dr Suite 200
Las Vegas, NV. 89119
W. 702-939-3465
F.  702-541-9901
C.  702-271-2659

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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November 4, 2009

Washington, D.C. – Led by Nevada Senator Harry Reid, the U.S. Senate today passed a bill that will extend unemployment benefits, the Homebuyer Tax Credit, and tax relief for struggling businesses.The Senate vote was 98 to 0 .

Homebuyer Credit
• Extends the $8,000 credit through June 30, 2010 (must have binding contract by April 30, 2010).
• Expands the credit (capped at $6,500) beyond first-time homebuyers to those who have owned a home for five consecutive years within the previous eight years.
• Increases the dollar limits for eligibility for both credits from $75,000 for singles and $150,000 for married couples to $125,000 for singles and $225,000 for married couples.
• Limits the credits to homes costing $800,000 or less.
• Waives repayment of the credit for Members of the Armed Forces and others on sent away from home on extended duty.
• Extends the credit for an additional year for Members of the Armed Forces and others away from home on extended duty.
• The proposal adds an age requirement, requires corroborating information to be filed with a return claiming the credit, and gives the IRS greater authority to deny the credit based on information reported by the taxpayer on prior returns.

John Le Francois

Production Manager

Direct Access Lending #405

650 White Drive Suite 200

Las Vegas, NV. 89119

Off: 702-617-9900

Fax: 702-541-9901

Email: john.lefrancois@dalusa.com

Site: www.lasvegasmtg.com

                                                                                                          

John Le Francois Senior Loan Officer All Western Mortgage Inc. 8345 W. Sunset Rd. Suite 200 Las Vegas, NV, 89113 US	Work: 702-947-0648 Mobile: 702-271-2659 Fax: 702-541-9901 jlefrancois@awmlv.com http://www.lasvegasmtg.com
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