Lendisphere

Heard about the new bill swirling around Congress –  HR 5072? 

It raises the monthly FHA mortgage insurance premium from it’s current .55% to a new rate ALMOST THREE TIMES HIGHER:  1.55%!!

You can thank Congresswoman Maxine Waters (D-CA) for this bright idea at a time when the housing market is showing a small glimmer of recovery based largely on the ability for borrowers to access low down payment, low interest rate FHA financing.   Way to break something that’s working!

‘Member when FHA issued their new waiver of the flipping rules on houses purchased and fixed up in less than 90 days?   In order to boost the sale of the boatloads of foreclosed houses sitting around empty, FHA figured they would loosen the rules a bit and allow a willing seller to sell, and a willing buyer to buy.  If there were doubts about the value, an underwriter might call for a second appraisal or some supporting documentation. 

Welp, fast forward six weeks later and I am starting to get memos from several investors saying they aren’t going to do these loans anymore.  They are telling me these property flip loans guaranteed by FHA are sitting around on the shelves of the secondary market like moldy bread.  Nobody wants to touch ‘em.  

Which means that, regardless of FHA’s stance on how good these loans are, investors have their own opinions:  these property flips are making them nervous.

So now you know.   Confusion begone.

And I’m not talking about The New Kids On The Block.

I’m talking about our friends at HUD once again bringing back the Mortgagee Letter 2009 - 15 having to do with how to use that pesky $8000 first-time homebuyer tax credit to actually get a buyer into a home. 

HUD’s posting sends a mixed signal regarding how this cash for closing can be accumulated.  But if you are confused – and I know I was –Robin Medecke does a fantastic job of breakin’ it down for us right here.  Take us to the bridge, Robin…

I’m still getting calls about it. 

“Carie, what’s up with the sweet new HUD program using the tax credit?”

And it breaks my heart.  When I hear the optimism on the other end of the telephone line, the naked joy about the prospect of down payment assistance for new buyers – it makes it very hard to smash all those hopes with the hard truth:  HUD’s new ML 2009-15 ain’t gonna happen.

Here’s how it started –  at the most recent NAR convention, HUD Secretary Donovan offered up a lovely idea:  that in the coming weeks, first-time home buyers would be able to borrow against their new $8000 tax credit they had coming, and use it to make their down payment!

Translation:  FREE MONEY!!

And, in fact, on Monday, May 11, HUD followed up this announcement with the issuance of Mortgage Letter 2009 -15 instructing lenders on how the program would work.

But in one of those quick government switcheroos with fingers pointing in every direction, by late in Tuesday evening , ML 2009-15 had been neatly and completely pulled.

Guess that makes HUD an Indian Giver.