FHA Loans Changing with the Times

Document Sample
FHA Loans Changing with the Times Powered By Docstoc
					                                                                                                                                                                                Brought to you by Rhonda Porter
                                                                                                                                                                  Your Trusted Advisor at Mortgage Master Service Corporation
                                                                                                                                                                               NMLS Licensed Loan Originator #MLO-121324

                                                                               Web/Blog:                        What’s Inside:                                       Home Buyer’s Tax                 Those in the military do have some special
                                                                                                                                                                                                                             extensions on the timelines available.
                                                                               Direct: (206) 718-9488                                  Home Buyer’s Tax Credit            1                 Credit Extended                  Qualified Armed Forces have a deadline of
                                                                               Licensed Loan Originator #510-LO-32047
                                                                                                                                       Creative Cuisine                   2                 and Expanded                     April 20, 2011 for being in contract and
                                                                               Rhonda Porter                                                                                                                                 closing by June 30, 2011.
                                                                                                                                       Let’s Get Social                   2
                                                                                                                                                                                                Effective November 6,
                                                                                                                                       What’s New ~                                            2009, Congress extended       What’s so great about a “tax credit”?
                                                                                     Kent, WA 98030
                                                                                                                                       My 10 Year Anniversary!            3                    and expanded the first time
                                                                                     24909 104th Avenue S.E., Suite 100
                                                                                                                                                                                               home buyer tax credit (Bill   The benefit of a tax credit is that it is a
                                                                                                                                       Rates at a Glance                  3                                                  dollar-for-dollar benefit, rather than a “tax
                                                                                                                                                                              HR 3548). The new version extends the
                                                                                                                                       Rave Reviews                       3   tax credit for first time home buyers and      deduction” or reduction in a tax liability that
                                                                                                                                                                              includes current home owners who are           would only save you $1000 to $1500 when
                                                                                                                                       HVCC: How It Impacts You           4                                                  all is said and done. So if a first time home
                                                                                                                                                                              looking to buy. And even if you’re are not
                                                                                                                                       FHA Loan Changes                   4   looking to buy another home, please            buyer who qualified for the entire benefit
                                                                                                                                                                              share this article to anyone who might be      were to owe $8,000 in income taxes and
                                                                                                                                                                              considering to do so. This information         they qualified for the $8,000 in tax credit,
                                                                                                                                             Seahurst Park in Burien          might benefit them greatly and I’m happy       they would owe nothing.
                                                                                                                                                                              to help them.
                                                                                                                                                                                                                             Better still, the tax credit is refundable,
                                                                                                                                                                              Here’s a brief overview of the Home-           which means that the home buyer can re-
                                                                                                                                                                              buyer’s Tax Credit.                            ceive a check for the credit if he or she has
                                                                                                                                                                                                                             little to no income tax liability. For example,
FHA Loans Changing with the Times                                                                                                                                             Tax Credit for First-Time Homebuyers           if a repeat homebuyer is eligible for a tax
                                                                                                                                                                                                                             credit of $6,500 and they owe $2,000 on
                                                                                                                                                                              First time home buyers (that is, people        their income taxes, they will receive a check
HUD is making some big changes to FHA insured mortgage loans due to the current mortgage climate. The first change may                                                                                                       back for the remaining $4,500.
                                                                                                                                                                              who have not owned a home within the
have taken place by the time you read this newsletter (if you subscribe to my blog at, you’ll be notified
                                                                                                                                                                              last 36 months) may be eligible for the tax
by email whenever I write a new article).                                                                                                                                     credit. The credit for FTHB’s is 10% of        High Income Caps
                                                                                                                                                                              the purchase price of the home with a
Upfront Mortgage Insurance Premium Increasing. Effective on all FHA case numbers issued on or after April 5, 2010, the up-                                                    maximum available credit of $8,000.            The amount of income someone can earn
front mortgage insurance premium is increasing from 1.75% of the base loan amount to 2.25%. A majority of the time, FHA up-                                                                                                  and qualify for the full amount of the tax
front mortgage insurance premiums (ufmip) is financed in the FHA loan by adding it to the base loan amount. The difference in                                                 Tax Credit for Current Homeowners              credit has been increased.
payment over a 30 year term may not be as significant as the lump sum appears.
                                                                                                                                                                              The tax credit program for those who all       Single tax filers who earn up to $125,000
                                                                                                                                                                              ready own a residence is up to $6,500 for      are eligible for the total credit amount.
Reduced allowable seller closing cost credit from 6% to 3%. Most transactions do not have enough closing costs and prepaids                                                   qualified purchases who have owned and         Those who earn more than this cap can
that would justify a 6% contribution from the seller (unless they’re paying for the ufmip and buying additional points). This change                                          occupied a primary residence for a period      receive a partial credit. However, single
to guidelines is expected to happen this summer.                                                                                                                              of five consecutive years during the last      filers who earn $145,000 and above are
                                                                                                                                                                              eight years.                                   ineligible.
Not all of the changes FHA is doing are restrictive...they’ve just loosened up on their “anti-flipping” rule by allowing certain
qualified homes to be resold within 90-days of acquisition (aka a “flipped” home). There are restrictions that apply and the trans-                                           What are the deadlines?                        Joint filers who earn up to $225,000 are
                                                                                                                                                                                                                             eligible for the total credit amount. Those
action must meet the “waiver of requirements”.
                                                                                                                                                                              In order to qualify for the tax credit, all    who earn more than this cap can receive a
                                                                                                                                                                              contracts (purchase and sales agree-           partial credit. However, joint filers who earn
This is not new—but I’m surprised how many folks don’t know that FHA insured loans are assumable! The lender needs to ap-                                                                                                    $245,000 and above are ineligible.
                                                                                                                                                                              ments) need to be mutually accepted by
prove the buyer and the buyer can take over your FHA interest rate. There are certain steps you would want to take as a seller to                                                                                            .
                                                                                                                                                                              the buyer and seller no later than April
make sure you are protected.
                                                                                                                                                                              30, 2010 and close no later than June
                                                                                                                                        View more of my photos at             30, 2010. The contract must be signed                               (Continued on page 2)
More information can be found on my blog under the FHA category at                                           after November 6, 2009.
                                                               Mortgage News                                                                                                                                               (continued from “What’s New”
                                                               (Continued from Page 1)
                                                                                                                                                                                                                           The SAFE Act is in the process of being fully implemented.
                                                               Maximum Purchase Price                                                                                                                                      Some originators, like yours truly, are Licensed with the
                                                                                                                                                                                                                           NMLS which means that we have to go through a very com-
                                                               Qualifying buyers may purchase a property with a maximum                                                                                                    plete background check (including a review of our personal
                                                               sales price of $800,000.                                                                                                                                    financial stability), pass a national and state exams about
                                                                                                                                                                                                                           mortgages and continue to take hours of education every
                                                               Age Limit                                                          No Foolin’- It’s My 10 Year Anniversary                                                  year...all good things for the industry EXCEPT that LO’s
Sliders                                                                                                                                                                                                                    who work for (yep, you guessed it) banks are only
                                                               One home buyer must be at least 18 years old at the time of        It’s hard to believe that ten years has passed since I started origi-                    “Registered” which means that they’re just registered—a
You can find this and other recipes I like to cook at          closing.                                                           nating mortgages on April 1, 2000 at Mortgage Master.                                    background check is done. Mortgage originators who are                                                                                                                                                                                             registered (work for depository banks) are not held to the
                                                               Proof of Purchase                                                  A lot has changed and a lot has returned (or surpassed) to where                         same standards per the SAFE Act as those of us who are
Metropolitan Market's mini-hamburger buns, or you can                                                                             things where when I started. Ten years ago, we did not have sub-                         licensed. I do wish that our Congress would have passed
use small dinner rolls.                                        To receive your tax credit you cannot e-file as you need to pro-   prime mortgages (for the most part). You had the option of conven-                       the SAFE Act to have the same standards for anyone who
                                                               vide a copy of your HUD-1 Settlement Statement along with          tional, FHA and VA loans. I’m so thankful that these are the pro-                        is taking a loan application regardless of what type of insti-
Fry pancetta or bacon in a non-stick pans. I used sliced       the IRS 5405 “First Time Home Buyer Credit” form.                  grams that I cut my teeth on as they’re pretty much all we have left.                    tution they work for. More favoritism for the banks, in my
pancetta.                                                                                                                                                                                                                  view. And I do think it’s an advantage to be licensed vs.
                                                               Ineligible Home Buyers                                             I can no longer work with my appraiser due to HVCC. We now have                          registered as we are held to a higher standard to the public.
                                                               • Non-resident aliens                                              to use a rotation system and I won’t know who the appraiser is until                     You can verify if a mortgage originator is licensed or regis-
In a separate pan, sauté sweet onions in a pan with olive                                                                         I receive it. I really think that it’s unfortunate NY Attorney General                   tered by visiting — it’s kind
                                                               • If property is sold before the end of the tax year.
oil until soft and golden.                                                                                                        Cuomo was able to create and enforce this code which has had an                          of cool—you can see our resumes and other information.
                                                               • If property ceases to be principal residence before the end
                                                                    of the year                                                   undeniable impact on home values across the country. Because
Ground sirloin (or hamburger) will do...not too lean or it                                                                        bank have ownership interest in many of the Appraisal Management                         I do plan on sticking around Mortgage Master as a mort-
                                                               • If the property is purchased from a person who is related to
won't be juicy! I used a small cookie scooper to make                                                                             Companies (where most lenders have to order an appraisal) and                            gage originator for at least another 10 years. It’s been my
                                                                    the homebuyer or if the homebuyer’s spouse
balls the size of a golf ball and shaped into a hamburger                                                                         banks take about 50% of the appraisal fee from the appraiser, I                          goal to be able to retire just as my Father-in-Law, Bob
                                                               • If the homebuyer’s income exceeds income limits (MAGI            can’t see this changing anytime soon....too much profit the banks.                       Porter did in his late 70s from Mortgage Master. I’m very
patty. Seasoned with freshly ground pepper. Because I               calculations)
fried the burgers in the pancetta/bacon grease left over in                                                                       And sadly, it’s just re-creating the same conflict of interest the code                  proud to be a part of our family owned mortgage company
                                                               • Less than 18 years old or claimed as a dependent by a tax        was intended to correct.                                                                 that’s been around for over 30 years serving home owners
the pan, I didn't add any salt.                                     payer.                                                                                                                                                 in the great Pacific Northwest.
                                                                                                                                  I’m concerned what the next 10 years will be like. Our elected offi-
Fry patties for just a few minutes on each side until they     Repayment of the Tax Credit                                        cials have not been very active with campaign reform—instead                             I thank you for your support and referrals which has made
start to brown.                                                                                                                   they’re going after health and finance. I wish they’d start with them-                   my ten years in the mortgage industry at Mortgage Master
                                                               If the home is sold within 36 months of acquisition or ceases to   selves! The banks really have their attention and it’s no wonder                         possible. I do love this job and helping people achieve
Split buns and add just a light spread of butter. Put under    be the buyer’s primary residence, the tax credit must be repaid    with campaign contributions and lobbyist at work. Pretty soon, it’s                      their financial goals—in spite of what the industry is going
                                                               in its entirety.                                                   my opinion that Americans will not have any choices when it comes                        through during these times with over-regulation (have you
broiler until golden.
                                                                                                                                  to selecting a mortgage product...or where they’ll go for their mort-                    seen the new three page good faith estimate???).
                                                               Remember, the new tax credit program includes a number of          gage needs.
Spread Dijon mustard on the buns.                              details and qualifications. Call or email me today if you have a                                                                                            I wouldn’t be writing this newsletter about my 10 year anni-
                                                               question or would like to see if you can benefit from the tax      (continued)                                                                              versary without you! THANK YOU!!
Add a burger with some grilled onions.                         credit.

Top with cheese. I had a nice blue and a manchego as
options (I used blue).
                                                                Let’s Get Social!                                                 Mortgage Interest Rates at a Glance
Then add a piece of pancetta (or bacon) cut to fit on the                                                                         Conforming priced w/1 pt & 45 day lock. $400k loan 80%LTV & 740+ credit score
                                                                Are you on social media sites like Face-
mini burger.
                                                                book or Twitter? Be sure to “friend me”.
                                                                                                                                  30Yr Conf ~ 4.875% (apr 4.906%)                                                           Rhonda had made this long distance pur-
                                                                You can find me at:                                               15Yr Conf ~ 4.250% (apr 4.511%)                                                           chase of our new home painless.
Sliced tomato or lettuce are optional...I decided to skip it                                                                                                                                                                              ~ Liz N. (relocating to Seattle)
                                                                                                                                  10/1 Conf ARM ~ 4.250% (apr 5.656%) with 5/2/5 Caps
on these little morsels.                                        Facebook:                  `

                                                                                                                                  Conf. High Balance priced w/1 pt & 45 day lock. $500k loan 80%LTV & 740+ credit score.    We were extremely pleased with how quick,
Another variation I’ve made is just doing the burger with a                                                                       30Yr Conforming High Balance~ 4.875 (apr 5.024%)
                                                                                                                                                                                                                            smooth & professional the whole process
slice of melted co-jack cheese...some dijion mustard and a                                                                        Jumbo priced w/1 pt & 45 day lock. $650k loan 80%LTV & 740+ credit score.
                                                                                                                                  Jumbo-Non Conforming ~ 5.500% (apr 5.797%)                                                was!
tiny slice of pickle. Less is more with these tasty treats!     Flickr:
                                                                                                                                  FHA/VA priced w/1 pt & 45 day lock. 3.5% down & 660+ credit score (VA may be 0 down).
                                                                                                                                                                                                                                          ~ Chris & Gary S. (refinance)
                                                                Yelp:                                   30Yr FHA/VA ~ 4.875% (apr 5.551%)
It’s a fun appetizer, snack or even a meal!                                                                                                                                                                                 Thanks again for your great service!
                                                                Click on my “About Rhonda Porter” under my video intro-           30Yr FHA High Balance ~ 4.875% (apr 5.461%)                                                               ~ Jules & Emily (refinance)
                                                                duction at for more social links.          Rates change constantly. These rates are from March 31, 2010 and can be found at
                                                                While you’re at my blog, please take a moment to sub-    where I post rates every Monday. You can see what rates I’m
                                                                                                                                                                                                                            Check out more at
                                                                                                                                  quoting to actual clients by visiting
                                                                scribe to receive updates (in the upper right corner).