FEDERAL HOUSING FINANCE AGENCY
STATEMENT
--------------------------------------------------------------------------------
For Immediate Release
July 30, 2008
STATEMENT OF DIRECTOR
JAMES B. LOCKHART
ON THE CREATION OF FHFA
“Today President Bush signed the ‘Housing and Economic Recovery Act of 2008.’ I thank President Bush and Secretary Paulson for their leadership in making government-sponsored enterprise (GSE) regulatory reform a reality.
The Act creates a world-class, empowered regulator, the Federal Housing Finance Agency (FHFA), with all the authorities necessary to oversee vital components of our country’s secondary mortgage markets -- Fannie Mae, Freddie Mac and the Federal Home Loan Banks -- at a very challenging time. As Director of the new agency I look forward to working with the combined Federal Housing Finance Board (FHFB), Office of Federal Housing Enterprise Oversight (OFHEO) and Housing and Urban Development (HUD) GSE Mission teams and with other regulators to ensure the safety and soundness of the 14 housing-related GSEs and the stability of the nation’s housing finance system.
For more than two years as Director of OFHEO I have worked to help create FHFA so that this new GSE regulator has far greater authorities than its predecessors. As Director of FHFA, I commit that we will use these authorities to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing, and operate safely and soundly.”
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Wednesday, July 30, 2008
Tuesday, July 22, 2008
Monday, July 21, 2008
Refinance Debt with an FHA Loan
FHA allows high loan to value to consolidate debt
Refinancing debt with an FHA loan to consolidate multiple bills into one new loan has become a popular option for homeowners. FHA, the Federal Housing Administration allows homeowners to borrow up to 95% of their home's value for a cash out refinance. This cash out can be used to refinance debt the homeowner has including: credit cards, student loans, automobile loans, personal loans, and second mortgages or home equity lines of credit.
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by getting a new mortgage for more than they currently owe, the difference after paying closing costs and the new escrow account is the cash out. This allows homeowners to access the equity they have built up in their home. FHA does require the homeowner to have owned their current home for at least one year before obtaining a cash out refinance.
Taking consumer debt and converting it into a mortgage can be financially beneficial. Refinancing expensive credit card debt into a tax deductible, low rate mortgage can be a good thing as long as future credit card charges are paid off in full monthly.
Congress created the Federal Housing Administration in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965. FHA guidelines are unique in that they give more flexibility for qualifying than do conventional loans.
Additionally, FHA interest rates are very low when considering this flexibility and comparing rates to a conventional loan, second mortgage or home equity line of credit. Unlike conventional loans, there is no significant increase in interest rate when going to a maximum loan to value cash out.
FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.
The downside of taking an FHA loan is the "Mortgage Insurance Premium," or MIP. Although MIP has recently dropped to 1.25% of the loan amount for borrowers with excellent credit and increases to 1.5% for borrower whose credit is not as good.
The FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
article
Refinancing debt with an FHA loan to consolidate multiple bills into one new loan has become a popular option for homeowners. FHA, the Federal Housing Administration allows homeowners to borrow up to 95% of their home's value for a cash out refinance. This cash out can be used to refinance debt the homeowner has including: credit cards, student loans, automobile loans, personal loans, and second mortgages or home equity lines of credit.
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by getting a new mortgage for more than they currently owe, the difference after paying closing costs and the new escrow account is the cash out. This allows homeowners to access the equity they have built up in their home. FHA does require the homeowner to have owned their current home for at least one year before obtaining a cash out refinance.
Taking consumer debt and converting it into a mortgage can be financially beneficial. Refinancing expensive credit card debt into a tax deductible, low rate mortgage can be a good thing as long as future credit card charges are paid off in full monthly.
Congress created the Federal Housing Administration in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965. FHA guidelines are unique in that they give more flexibility for qualifying than do conventional loans.
Additionally, FHA interest rates are very low when considering this flexibility and comparing rates to a conventional loan, second mortgage or home equity line of credit. Unlike conventional loans, there is no significant increase in interest rate when going to a maximum loan to value cash out.
FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.
The downside of taking an FHA loan is the "Mortgage Insurance Premium," or MIP. Although MIP has recently dropped to 1.25% of the loan amount for borrowers with excellent credit and increases to 1.5% for borrower whose credit is not as good.
The FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
article
Thursday, July 3, 2008
Mortgage Overload
Why do Loan Officers and mortgage companies offer every possible loan under the sun? Even though so many loan programs have evaporated in the last year, there are still, just to name a few:
FHA/VA/Fannie Mae/Freddie Mac/jumbo/super jumbo/DPA programs/stated inc/investor/purchase/refinance/option arms/commercial/subprime/sisa/no doc/mixed use properties/hard money/non-warrantable condos/rural properties/lot loans/construction to perm loans.... I can go on and on.
All are different animals. All have different guidelines that constantly change. You can even mix and match to create more categories. It's too much for one person or company or even a website to do. Or at least to do it right.
Where I'm going with this is LO's and Mortgage Companies need to focus on a select niche to best serve their clients and to be successful. It's ok to say "We only do this" or "We don't do that". However, LO's sure have a tough time saying that to clients or Realtors they work with.
Other industries have figured that out. The mortgage industry has yet to. Doctors specialize in certain medicine. Attorneys practice certain categories of law. Even restaurants only serve certain types of food. Ever see a Greek/Italian/Mexican/American/Sushi/Chinese/Korean/BBQ/Steak House? Of course not, the food would be terrible. That's how it is in the mortgage industry.
This refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. Avoid the hassle of four lenders calling.
FHA/VA/Fannie Mae/Freddie Mac/jumbo/super jumbo/DPA programs/stated inc/investor/purchase/refinance/option arms/commercial/subprime/sisa/no doc/mixed use properties/hard money/non-warrantable condos/rural properties/lot loans/construction to perm loans.... I can go on and on.
All are different animals. All have different guidelines that constantly change. You can even mix and match to create more categories. It's too much for one person or company or even a website to do. Or at least to do it right.
Where I'm going with this is LO's and Mortgage Companies need to focus on a select niche to best serve their clients and to be successful. It's ok to say "We only do this" or "We don't do that". However, LO's sure have a tough time saying that to clients or Realtors they work with.
Other industries have figured that out. The mortgage industry has yet to. Doctors specialize in certain medicine. Attorneys practice certain categories of law. Even restaurants only serve certain types of food. Ever see a Greek/Italian/Mexican/American/Sushi/Chinese/Korean/BBQ/Steak House? Of course not, the food would be terrible. That's how it is in the mortgage industry.
This refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. Avoid the hassle of four lenders calling.
Wednesday, July 2, 2008
Inflation and Interest Rates Soar
U.S. Cost of Living Increases in 2008, Economy Teetering on Recession
Over the last few months, a staggering rise in food and energy prices combined with what many consider to be a much too weak dollar have pushed up the inflation rate to its highest level in many years, already reaching 4% in the first six months of 2008 (inflation rose 4.1% in all of 2007, and that was considered high). Although in the United States the real world price factors that are contributing to the rise in the overall inflation rate are contained within the food and energy industries, that's not much comfort for people buying groceries, gasoline, and heating or air conditioning for their home. Higher transportation costs have partly been to blame for the rise in food prices.
Some economic commentators have noted positively, however, that the Federal Reserve and its Chairman Ben Bernanke are aware of their own monetary policy mistakes of the 1920s and 1930s with the Great Depression and again in the 1970s, which experienced caused the dreaded "stagflation" throughout most of the decade, where sluggish economic growth was accompanied by very high inflation. By being more careful not to do anything extreme or drastic to interest rates, the Fed is attempting to contain the national inflation rate and let the market forces driving it make their own correction.
Princeton economist Paul Krugman feels the Federal Reserve has definitely learned from past mistakes. Krugman stated " During the Great Depression, the Fed was only concerned about protecting the nation's gold reserves, and the federal government believed that austerity and cutting spending was the answer to recession. I think we know more now than we did then and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
The U.S. Congress continues to drag its feet over legislation to free up much more territory for private oil and gas company's exploration and drilling while at once giving what many realize are perverse incentives to literally burn up our food supply to power our cars. None of this will do anything to ease energy and food prices.
Mortgage Rates Also Up
As if inflation concerns aren't enough for many people, mortgage interest rates are at their highest level in nine months. The housing market bubble, driven by long-standing government mandates for creative loan packages intended to get practically every American adult a home of their own, burst about a year ago. With lenders and their investment backers losing loads of money hand over fist as people across the nation defaulted on their mortgages and lose their homes, lenders' purse strings have tightened. It's now harder to qualify for a mortgage than it was just one year ago, and if you do get one you're likely to pay for other's mistakes through higher interest rates.
Government-backed mortgage company Freddie Mac reported on June 19th that 30-year fixed-rate mortgages averaged 6.42 percent. One year ago that rate averaged just 6.08%.
What it all adds up to for the average American is that the cost of living has gone up noticeably, and it may continue to do so for some time.
mortgage refinance calculator
Over the last few months, a staggering rise in food and energy prices combined with what many consider to be a much too weak dollar have pushed up the inflation rate to its highest level in many years, already reaching 4% in the first six months of 2008 (inflation rose 4.1% in all of 2007, and that was considered high). Although in the United States the real world price factors that are contributing to the rise in the overall inflation rate are contained within the food and energy industries, that's not much comfort for people buying groceries, gasoline, and heating or air conditioning for their home. Higher transportation costs have partly been to blame for the rise in food prices.
Some economic commentators have noted positively, however, that the Federal Reserve and its Chairman Ben Bernanke are aware of their own monetary policy mistakes of the 1920s and 1930s with the Great Depression and again in the 1970s, which experienced caused the dreaded "stagflation" throughout most of the decade, where sluggish economic growth was accompanied by very high inflation. By being more careful not to do anything extreme or drastic to interest rates, the Fed is attempting to contain the national inflation rate and let the market forces driving it make their own correction.
Princeton economist Paul Krugman feels the Federal Reserve has definitely learned from past mistakes. Krugman stated " During the Great Depression, the Fed was only concerned about protecting the nation's gold reserves, and the federal government believed that austerity and cutting spending was the answer to recession. I think we know more now than we did then and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
The U.S. Congress continues to drag its feet over legislation to free up much more territory for private oil and gas company's exploration and drilling while at once giving what many realize are perverse incentives to literally burn up our food supply to power our cars. None of this will do anything to ease energy and food prices.
Mortgage Rates Also Up
As if inflation concerns aren't enough for many people, mortgage interest rates are at their highest level in nine months. The housing market bubble, driven by long-standing government mandates for creative loan packages intended to get practically every American adult a home of their own, burst about a year ago. With lenders and their investment backers losing loads of money hand over fist as people across the nation defaulted on their mortgages and lose their homes, lenders' purse strings have tightened. It's now harder to qualify for a mortgage than it was just one year ago, and if you do get one you're likely to pay for other's mistakes through higher interest rates.
Government-backed mortgage company Freddie Mac reported on June 19th that 30-year fixed-rate mortgages averaged 6.42 percent. One year ago that rate averaged just 6.08%.
What it all adds up to for the average American is that the cost of living has gone up noticeably, and it may continue to do so for some time.
mortgage refinance calculator
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