Pleasanton Real Estate

Fri, 2011-08-19 16:48 — NationalMortgag…

The Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA) as of Oct. 1, 2011. According to Mortgagee Letter 11-29, FHA will reduce loan limits in the highest cost metropolitan areas of the country, while limits would remain unchanged in most other parts of the nation. 

These new loan limits were scheduled to take effect in January of 2009, but continuing strains in credit markets led the Congress to delay implementation. The result has been nearly three years of higher loan limits for some areas based on the Economic Stimulus Act of 2008 (ESA).

Barring any new action by the Congress, many affected areas will have lower FHA loan limits come Oct. 1. The current standard (floor) loan limit for areas where housing costs are relatively low will remain unchanged at $271,050 for one-unit properties. The new “ceiling” loan limit for higher cost areas will be reduced from $729,750 to $625,500 for one-unit properties. FHA loan limits vary based on area median home price, but all will fall within the range of $271,050 and $625,500 for one-unit properties. Additional information and loan limits for two-, three- and four-unit properties are noted in FHA’s Mortgagee Letter 11-29. As in previous years, Alaska, Hawaii, Guam, and the Virgin Islands may have higher loan limits.

FHA estimates that only a fraction of borrowers living in the nation’s highest cost areas will be impacted by the new loan limits announced today. For example, last year only three percent of FHA-insured borrowers lived in these high-cost areas. The change in FHA loan limits will affect 669 counties across the country, out of a total of 3,234 jurisdictions in which FHA insures home loans. Most loan applications with an FHA case number assigned on or after October 1, 2011, will be subject to the new limits. However, there are some exceptions for FHA-insured to FHA-insured refinances that are noted in HUD’s Mortgagee Letter. In addition, there are exceptions for loans that were issued case numbers on or before Sept. 30, 2011 and meet all of the credit approval criteria detailed in Mortgagee Letter 2011-29.

The mortgage loan limit and maximum claim amount for FHA-insured reverse mortgages will remain unchanged. FHA’s Home Equity Conversion Mortgage (HECM) will continue to have a maximum claim amount of $625,500.

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WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the February edition of the Obama Administration’s Housing Scorecard. The latest housing figures show increased existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled.

“In the face of the deepest economic recession and housing crisis in decades, the Obama Administration has taken unprecedented action to promote stability in the market – keeping millions of families in their homes and helping millions more to save money by refinancing. But the data clearly show that the market remains extremely fragile,” said HUD Assistant Secretary Raphael Bostic. “While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet. Through the broad range of programs this Administration has put in place, we can put help in reach to those homeowners as early as possible.”

“Our housing market remains fragile. We know this from data, but homeowners across the country can feel it too. That’s why this Administration remains committed to helping eligible homeowners avoid foreclosure where it makes economic sense to do so,” said acting Assistant Secretary for Financial Stability Tim Massad. “Every month, HAMP continues to help tens of thousands of additional families in a cost-effective manner. And by setting affordability standards and developing a framework for how mortgage servicers provide assistance to struggling families, HAMP has established critical protections for homeowners and has catalyzed improvements in modifications industry-wide.”

Available online at www.hud.gov/scorecard, the February Housing Scorecard features key data on the health of the housing market including:

Housing market remains fragile as data through January paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010. Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.

Administration efforts have been effective in blunting the effects of the deepest economic crisis since the Great Depression. Since April of 2009, record low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings. However, home prices remain unsettled at this fragile stage of the recovery. More than 4.2 million modification arrangements were started between April 2009 and the end of January 2011 – including nearly 1.5 million HAMP trial modification starts, more than 730,000 FHA loss mitigation and early delinquency interventions, and more than 2 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered was more than double the number of foreclosure completions for the same period (1.8 million). View the January HAMP Servicer Performance Report.
Given the current fragility and recognizing that recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.

Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration’s unprecedented housing recovery efforts, including assistance to homeowners through the FHA and HAMP. The Obama Administration’s complete Housing Scorecard is available at: www.hud.gov/scorecard.