Obama's new FHA plan allows you to Refinance for Less!

President Obama has introduced a new refinance plan for homeowner's who hold FHA loans that were originated prior to June 1, 2009. Please see the link below for more details. This is the best of both worlds for any FHA loan holders. The monthly mortgage insurance is lowered from today's rate of 1.15% to the old factor you are currently paying of .55%, so the lower rate will not be washed away by increased monthly mortgage insurance like it had been. Also, you do not have to pay FHA a large up front amount, starting April 1, new FHA loans will have a fee of 1.75% of the loan amount, see blog below, but currently FHA loan holders whose loans originated prior to June 1, 2009 can refinance for a fee of .1% to FHA, on a $200,000 loan this is a savings of $3300. FHA streamline refinances do not need an appraisal and do not have any lender fees. Call or email if you are interested. Or apply online at http://jimsteel.marketplacehome.com

Here is the article....

NEW YORK (CNNMoney) -- Borrowers with some federally insured mortgages will be able to refinance into lower interest rate loans more easily and cheaply under a plan unveiled Tuesday by the Obama administration.

At a news conference, President Obama announced that the Federal Housing Administration will cut upfront fees for refinanced loans it already insures.

The new fees are for borrowers whose FHA loans were issued before June 1, 2009. An estimated 2 to 3 million borrowers could take advantage of the savings, which could reduce mortgage payments for the typical FHA borrower by about a thousand dollars a year, according to the administration.

"It's like another tax cut in people's pockets," said President Obama.

Borrowers who refinance their existing FHA loans will pay an upfront insurance premium equal to 0.1%, the lowest allowable rate, of the mortgage amount -- $100 for a $100,000 loan -- plus an annual fee of 0.55%.

The new refinancing fees contrast sharply with the cost of obtaining a FHA loan, according to Jaret Seiberg, an analyst with the Washington Research Group. A borrower making a 3.5% down payment on a home purchase as of April 1 will pay a 1.75% upfront fee and a 1.25% annual fee. Those purchase fees were raised barely a week ago to improve the FHA's capital reserve.

Has Obama's housing policy failed?

Still, lowering refinancing fees "should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services," Seiberg said.

The new policy will also make it easier for the banks to refinance loans because it directs the FHA not to count the loans toward the lender's "compare ratio." That calculates the performance of loans issued by the lenders and compares it to the performance of other lenders.

Some lenders have not wanted to refinance FHA loans because many of them were made during years of high default rates, according to Seiberg.

Knowing that the FHA will not hold refinanced loans against them should they fail to perform could make lenders more willing to refinance loans for borrowers at a higher credit risk, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association.

FHA TO IMPOSE NEW FEES APRIL 1!

Beginning April 1, 2012, HUD is increasing its up-front mortgage insurance premium by .75%. Currently the fee is 1% and for any case numbers issued after April 1, 2012, the new fee will be 1.75%. See story from HUD below. Please call or email me with questions or how this may effect you.

HUD No. 12-037 HUD Public Affairs (202) 708-0685

FOR RELEASE Monday February 27, 2012

FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
New premium structure will help protect FHA’s MMI fund

WASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans. FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders.

“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or afterJune 1, 2012.

The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month. These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan. Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.

Save Money On Your Monthly Mortgage For Free!

No gimmicks! If you have an FHA loan and took this loan out over the last 18 months, you are a very good candidate, to take advantage of FHA's Streamline Refinance program. Under this program, you are able to refinance without having to get an appraisal, and in most cases we do not need to collect any income documentation, making this a true streamline refinance. In many instances you are able to refinance without any costs as they are picked up by your lender. If you would like more information on this program or the other great programs available for purchasing or refinancing a home, visit my website at http://jimsteel.marketplacehome.com, send me an email at jsteel@marketplacehome.com or call 763-432-4655.