Paul writes and asks, “do you think restoring DPA will be a priority of the Obama administration? I believe H.R. 600 was introduced last week in the House.”

Paul is correct. H.R. 600 was introduced on January 19th by Rep. Al Green (D-TX), a measure designed to again allow seller-financed downpayment assistance (DPA)for FHA mortgages.

However, a close look at the bill’s language shows that it’s not a broad bill that would allow assistance to all borrowers.
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It’s been a busy couple of days for distressed and distressing real estate news.

On the foreclosure front, RealtyTrac.com says 3,157,806 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 2,330,483 U.S. properties in 2008, an 81 percent increase when compared with 2007 and 225 percent higher than in 2006.

The National Association of Home Builders says that “single-family starts were down 40.5 percent for the year to 622,000 units, while multifamily starts were off by 8.8 percent to 282,000 units.”
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With a new President and a new Congress now in Washington the FHA question of the moment is what comes next.

By any standard the FHA mortgage program is central to any effort to restore home values if only because so many private-sector programs are going or gone. Option ARMs are dead, interest-only mortgages are rare, stated-income loan applications are hardly common and it all probably doesn’t matter unless your have a credit record that sparks and shines.
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Could we see rising FHA loan limits?

in the past 18 months the maximum FHA loan for a home in the lower 48 states has ranged from $417,000 in 2007, to $729,750 in 2008, and on to the 2009 loan limits which are generally $417,000 except for high cost areas where the maximum loan amount is $625,000.
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There’s growing talk in Washington that the FHA loan limit may again be lifted, a way to help buyers and sellers in high-cost communities.

According to the Bloomberg news service, “President-elect Barack Obama agreed with House Democrats to increase the limit on loans Fannie Mae and Freddie Mac can purchase to $729,750 in high-cost areas, House Financial Services Chairman Barney Frank said.”
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FHA Applications Post Record Numbers in December
As we’re finally getting reports in for the month of December 2008, the numbers for the first two weeks look quite promising. For December 1^st to 15^th, FHA applications reached a high of 136,685 - a jump of 77.7 percent over the previous period. As for their annual pace, December’s performance was able to push the FHA past the 4 million mark for applications. 

During this period, 76,401 mortgages were insured by FHA, with purchases and refinances accounting for 43,200 and 28,107 respectively. Unfortunately, no Hope For Homeowners mortgages were insured. 

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Here is something which sounds like a good idea — the House Financial Services Committee held a hearing to discuss “FHA Oversight of Loan Originators,” in other words, is the FHA making sure that lenders follow the rules.

What actually came out in testimony was different, in essence a look at the FHA itself and where it stands from James A. Heist. the assistance inspector general for audit at HUD.
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As we start 2009 the year-ahead hardly looks promising in terms of economics and finance. The country, according to the Los Angeles Times, may well have committed as much as $8.5 trillion to clean up the financial mess, a huge sum of money which will eliminate the ability of the federal government to do many of the things which a government should be doing.

In the midst of rising unemployment, vast problems on Wall Street and what is plainly a worldwide recession allow me to offer a bit of good news: The fixed-rate FHA mortgage program remains the best financial alternative for just about anyone considering the purchase or refinancing of real estate.
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As the New Year has finally begun, I wanted to point out two key changes FHA borrowers can expect to see in this coming year. The first issue has been the change to the FHA down payment requirement; a change that we’ve heavily covered and seen some borrowers face since late last year. But in cased you missed it, as of January 1^st 2009 FHA purchase loans will now require a down payment of at least 3.5 percent. 

 The other changes have been a few key updates to the FHA appraisal requirements which also began on January 1^st 2009. One thing new for 2009 is that more FHA loans will now require two appraisals to be eligible for FHA. 

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If you think that Washington is a monolithic entity where every department and agency marches in lock-step, just take a look at how foreclosures are being handled.

First up, we have HUD and the FHASecure program. Announced as a foreclosure prevention program that would save huge numbers of homeowners nationwide, the program came to a halt December 31st. While the final numbers are not in it looks at though roughly 4,100 delinquent conventional borrowers nationwide will have received new FHA loans under the program since August 2007 when it was first announced by President Bush.
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