FHA LENDING LIMIT UPDATE

by traditionta

FHA Update: 

On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages. 

Forward Mortgages: 

Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect.

As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11:

•       Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11.

•       Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29.

The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame.

HECM:

Lenders are reminded that the maximum claim amount for HECMs is not affected by HR 2112 and the maximum claim amount for HECM remains at $625,500 as stated in Mortgagee Letters 10-40 and 11-29. This loan limit will remain the same for 2012 and will be included in the pending Mortgagee Letter.

 

 

 

Posted via email from Title Insurance
Continuing Ed for Title Agents

FHA LENDING LIMIT UPDATE

FHA LENDING LIMIT UPDATE

by traditionta

FHA Update:

On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages.

Forward Mortgages:

Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect.

As a reminder, Mortgagee Letter 11-29 still applies to the time period 10/1/11 through 11/17/11:

•       Loans that did not have credit approval on, or before, 9/30/11 are subject to the lower limits that were in effect 10/1/11 through 11/17/11.

•       Loans that had credit approval on or before 9/30/11 and FHA to FHA refinances may be eligible for exceptions to those loan limits as defined in Mortgagee Letter 11-29.

The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame.

HECM:

Lenders are reminded that the maximum claim amount for HECMs is not affected by HR 2112 and the maximum claim amount for HECM remains at $625,500 as stated in Mortgagee Letters 10-40 and 11-29. This loan limit will remain the same for 2012 and will be included in the pending Mortgagee Letter.

Posted via email from Title Insurance
Continuing Ed for Title Agents

Warren: New Mortgage Forms to Empower Consumers.

By Maya Jackson Randall and Alan Zibel

Figuring out the true cost of a home loan over the long haul is a confusing process for consumers, forcing them to sift through a complicated stack of purchasing paperwork.

The lack of clear disclosures was a key problem during the housing market’s boom, consumer advocates say. Many consumers didn’t understand the terms of “exotic” home loans such as interest-only mortgages, or “pick a payment” loans that allowed for the principal balance to increase over time. Some didn’t even realize they had more garden-variety adjustable-rate loans whose interest rate reset at market rates after an initial teaser period.

The government’s new consumer protection agency is trying to correct this problem and simplify the entire process. The Consumer Financial Protection Bureau, which officially launches in July, on Wednesday published two prototype mortgage disclosure forms. (View the first and second.)

The forms are designed to give consumers a clear idea of how much their monthly loan payments – as well as their tax and insurance bills – could rise over time.

“This is about empowering consumers,” said Elizabeth Warren, the White House adviser charged with setting up the bureau. “It is always good for consumers to know the real cost of a mortgage.”

In the coming months, the agency will hold interviews with consumers, lenders and brokers around the country. The consumer bureau is also inviting feedback from the public:

The project is a major undertaking for the fledgling agency. Previous attempts to streamline mortgage disclosures have stumbled partly due to intense opposition from interest groups and lawmakers.

The Dodd-Frank financial overhaul, which created the consumer bureau, directed the agency to combine the mortgage documents and propose new mortgage disclosure requirements by July 2012. Currently, home buyers receive two sets of mortgage disclosure forms when they apply for a loan: a two-page form required by the Truth in Lending Act of 1968, or TILA, and the three-page Good Faith Estimate required by the Real Estate Settlement Procedures Act of 1974 or RESPA.

When they are eventually made final, the consumer protection bureau’s forms will replace those disclosures, which have been criticized for being difficult to understand and containing overlapping information.

David Stevens, chief executive of the Mortgage Bankers Association, said in a statement that his group supports simplifying disclosures, but warned that such changes could be expensive to the industry. He noted that 18 months ago, the industry “expended considerable costs” on a previous set of changes to mortgage forms. “We need to make sure that this new form is highly beneficial to consumers who will bear the implementation costs,” he said.

Posted via email from Title Insurance
Continuing Ed for Title Agents