My Lubbock TX Real Estate Blog

From HUD.gov (01/20/10):

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
     
     
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
     
     
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
     
     
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

CONSUMER ALERT!

Craig's List Can Be A Source of Real Estate Scams

I just learned this morning of real estate scam on Craig's List involving one of our listings.

Our office learned this morning that one of our listings for sale showed up on Craig's List as a property for rent, with the MLS photos on the Craig's List listing.  After some investigation, we learned that it was a person from overseas that posted the listing himself, and pulled the pictures off the internet to put up on the Craig's List ad.

To make a long story short, the scammer was pretending to be a missionary overseas; and was looking for someone trustworthy to rent "his" house.  He asked for the prospect to send him a deposit, for which he would send the keys.  Supposedly, the deposit was fully refundable.

Can Your Safety Be Compromised?

While most people would not fall for this type of scam, here's another important consideration.  With anyone having the ability to post anything on Craig's List; it opens the door to more serious safety concerns.  What if someone posts a home for sale or lease on Craig's List who is only intent is to rob or abduct someone?  It is possible that you could show up to look at a home only to find you are confronted by some criminal looking to rob or harm you.

What's The Solution?

When looking to buy or lease a home, it is usually safer to work with a professional in the business.  If you are looking to rent a home, it is wise to work with a property manager.  Some property managers have access to multiple properties from a few dozen to a few hundred.  Likewise, if you are looking to buy a home, a REALTOR® can be a much safer resource to assess your needs and help you find the perfect home.

Bottom line, anytime you deal with anything online, you have to use caution & common sense.