Usually when the Chairman of the Federal Reserve speaks just about everyone listens, in part because it’s tough to get a straight answer or to find a simple sentence.

Speaking before the Senate Banking, Housing and Urban Affairs Committee, Fed Chairman Ben Bernanke offered the following comments regarding FHA reform according to a read more

With support across the board from lenders and HUD officials, you might think that FHA modernization is a slam dunk.

Actually, that’s not the case.

First, FHA modernization, H.R. 1852, was passed by the House last year — but not read more

It makes you wonder….

In it’s announcement that it would begin to allow the use of LIBOR indexes in August, HUD said that it had first asked for public comments. What response did it get for a major change to one of the largest mortgage programs in America?

The comment period for the proposed rule, read more

There was an interesting, if somewhat bleak, op-ed piece in the New York Times that makes interesting reading,

According to Joshua Rosner, “The subprime crisis has not been averted. In fact, it is still largely ahead of us. The downgrades represent only a small fraction — about 2 percent of the mortgage-backed securities rated for the year read more

The FHA mortgage program will change as of August 20th. Lenders will be allowed to offer 3-, 5-, 7- and 10-year FHA ARM products that use the LIBOR index instead of the one-year Constant Maturity Treasury (CMT) index.

If you have an interest in an FHA ARM be sure to look at both the index read more

Figures from the end of June show that the market for FHA loan products is booming.

*Applications maintained a strong annual rate — 820,700. That’s up 21.4 percent over last year.

*Loan originations are up 5.8 percent over last year.

*A lot of people applying for FHA loans are not qualifying — on an annualized basis, there were 820,700 read more

If you’re running a car company, hot dog stand or goat farm then market share is a fair issue: You want more of the market to increase profits and push out competitors.

But is market share an important issue for federal programs?

A report read more

I get a lot of mail, regular mail, from folks who want to lend me money. Sometimes I get fabulous offers of low rates that remain in place for a whole month! Or second loans for more than $100,000 — you know, above the point where mortgage interest is usually deductible. Or, offers that read more

There seems to be no shortage of foreclosure stories, and that’s a shame because some could surely be avoided by switiching to FHA mortgage financing before the first payment is missed.

What can the FHA do? By switching to an FHA loan borrowers are effectively restructuring their debt.

How?

As HUD Secretary Alphonso Jackson has < read more

With all the news about foreclosures, it’s good to know that FHA mortgage borrowers can often avoid the court house steps.

HUD says that the FHA mitigation program has saved 230,000 borrowers from foreclosure in just the past three fiscal years. (The read more

Under the FHA program borrowers pay an insurance fee for FHA converage equal to 1.5 percent of the loan balance at closing plus .5 percent (divided by 12) on the remaining loan balance for each month the loan is outstanding.

But how would insurance fees look if you bought with private mortgage insurance (MI)? There’s read more

Deep within the federal government is something known as the Office of Federal Housing Enterprise Oversight (OFHEO). No, this is not a secret entity or part of the CIA. Instead, it’s an agency which oversees Fannie Mae and Freddie Mac.

One of the functions that Fannie Mae and Freddie Mac perform each year is to read more

How much do borrowers know about their loans?

According to a June study by the Federal Trade Commission, a lot of folks don’t have a clue. The study found that:

*About 20 percent could not identify the APR, the cash due at closing or the read more

For years, whenever I have written about mortgage modifications I have gotten emails from offended loan officers explaining that there was no such thing as a loan modification.

Such claims, of course, are patently untrue. An ARM — by definition — is a loan which is automatically modified according to evolving market conditions. No less read more

Published reports have recently stated that the FHA monthly insurance premium (MIP) cannot be cancelled and that it lasts the life of the loan. This old cancellation policy does not apply to FHA loans made after January 2001.

According to HUD Mortgagee Letter 00-38

“In the past, some FHA borrowers have paid annual mortgage insurance premiums throughout the life of their mortgages. Effective for all loans closed on or after January 1, 2001, FHA’s annual mortgage insurance premiums will be automatically canceled under the following conditions:

*For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, provided the mortgagor has paid the annual mortgage insurance premiums for at least five years.

*For mortgages with terms 15 years and less and with loan to value ratios 90 percent and greater, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, irrespective of the length of time the mortgagor has paid the annual mortgage premiums.

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

Since most FHA mortgages, and most mortgages generally, are repaid before original loan balances fall 22 percent, this FHA policy may not seem as though it has much value. However, there are people who have their loans for many years and for them this is a good policy.