Mortgage Talking Points

Maybe a more appropriate headline would be “Make Hay While the Sun Shines -

FHA just announced another delay to the implementation of the new Condo Approval Process to December 7, 2009.

They are claiming that within two weeks they will issue new guidance that will be a kinder, gentler version of the original condo approval process and offer more clarification.

But the really surprising news is that they’ve reversed their position (temporarily) on spot loans.  Mortgagee Letter 2009-19 eliminated the spot loan approval process as of June 12, 2009.  Now they are telling us that we can do them again until December 7!!  Could this be a hint of things to come???

Official Notice Released Today:

FHA notice on delay in FHA condominium changes: 

Implementation of FHA’s new policy guidance for condominium project approval and condo unit financing will be delayed until December 7^th  2009.  The new guidance, to be issued within the next two weeks, will:  1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.   

Until the new guidance takes effect on December 7^th, 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41.  Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.

This Just Out - The House voted (10-13-09) to extend the $8,000 tax credit to MILITARY, Foreign Service & Intelligence Officers until 11-30-10. They have to qualify using the same 1st time buyer rules and they have to have had 90 days of continuous military service during 2009. One new provision: If the military person is forced to sell their home (within the 3 year period) due to military orders or deployment - they will not have to pay back the $8,000. It’s expected to sail thru the Senate shortly.

HUD is touting it as “aren’t we great because we are now opening up the FHA opportunity to more brokers” when in fact they are creating a situation where the responsibility is passed to the lenders (which I understand) and the lenders could easily be more stringent than HUD on which brokers they are willing to take responsibility for. 

The new proposed rule says that there will be no more mini-eagles and brokers will not be approved by HUD-period.  They will work through an approved lender and the lender will have to take all the responsibility for them. I believe it squeezes the broker out even more,  (which again, I understand why) but they are trying to spin this as a positive thing for the brokers when it isn’t.  It’s another “stop the bleeding” move by HUD!