Arizona Home Talk

With a New Year brings New Guidelines.
Many in response to HR 3221.
This is not the all encompassing list of New Guidelines; just the ones I feel have a major impact on purchase and refinance transactions.  (Read all of HR 3221)

Thursday (01/08/09) Fannie and Freddie announced they are extended the Foreclosure moratorium. This will extend the Holiday gift initially given (11/20/2008).

Not a huge increase, although ½ % is a ½%.  FHA increased the required down payment from 3% to 3.5% for all purchases.

The max Loan to Value (LTV) for FHA rate & term refinances (no cash out), including streamlines is 97.75%
The max LTV for FHA cash-out refinances is 95% for loan amounts less than the conforming limit ($417,000) and 85% for loan amounts at or above the conforming limit.

Attention FHA cash out clients your closing cost just increased; TWO (2) appraisals will be required for all cash-out refinances with an LTV above 85%. (some lenders are stating 2 no mater what LTV)

FHA Up Front Mortgage Insurance Premium rates increased from 1.5% to 1.75% for all rate & term and cash-out refinances and 1.5% for all streamline refinances.

The FHA Secure refinance will be terminated. (I didn’t know one lender that actually closed one anyway, I believe it was just a factious comfort program)

Cash back on rate & term and streamline refinances is maxed at $500.

The Rollback/Reduced FHA loan limits. Also known as the FHA Modernization Act: FHA & GSE Limit Increase.
As of January 1st 2009 the temporary FHA loan limits were reduced.  Some areas have been rolled back over $100k or greater; while some metropolitan areas have been reduced the limit is still greater than the previous FHA esoteric limits. (No area is lower than $271,050)  FHA Loan limits

Effective April 1,  Fannie Mae’s definition of risk is expanded.  Fannie Mae’s new loan-level fees now impact any conforming mortgage that meets any of the following criteria, with the exception of fixed rate loans of 15 years or less. These fees are added to the base par rate a borrower qualifies for.

• Up to 0.75% fee: Secured by a condo/co-op with less than 25% equity
• Up to 0.50% fee: Features a junior mortgage (i.e. HELOC, HELOAN)
• Up to 1.00% fee: Features interest only payment options
• Up to 1.00% fee: Secured to a 2-unit property
• Up to 3.00% fee: Is designated as “cash out”

The BIG, “lets charge the borrower and hope we get value appraisal change”.
Come May 1, 2009 a major change to the Home Valuation Code of Conduct.
lenders will be required to order appraisals from one central clearing house, which will in turn select an appraiser. This is an attempt to thwart inflated values. In my opinion this will do more harm than good.  If the Broker/Lender is unable to get a comparable value and the appraisal comes in under the forecasted amount not only is the borrower going to lose out on the refinance, they will be out the cost of the appraisal. (note; appraisals can run $300 -$500 dependent on area)

The First Time Homebuyer Credit is set to expire July 1, 2009

Again these are just a few of the multitude of change for the start of the year, as always check back to see what’s new and coming down the pipe.

Image courtesy: http://www.flickr.com/photos/nifmus/2590380482/sizes/o/