FHA Mortgage Insurance

HUD's Required Lender Protection

Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requirements include mortgage insurance primarily for borrowers making a down payment of less than 20 percent.

Annual Mortgage Insurance Premium
President Obama signed a bill in August of 2010 giving HUD the flexibility to increase Annual Mortgage Insurance Premiums. Under the law, effective as of October 4th, 2010, HUD is allowed to increase the amount of the Annual Mortgage Insurance Premium from .5% to 1.5% on loans with a down payment of 5% or more. The Insurance Premium on loans with less than 5% down payment increases from .55% to 1.55%.

HUD is not implementing the maximum amount at this time. As of October 4th, 2010, loans with a down payment equal to or greater than 5% will be charged an Annual Premium of .85% and loans with a down payment of less than 5% will be charged .90%.

Upfront Mortgage Insurance Premium
Effective for loans on or after October 4th, 2010, for FHA regular purchases and refinance products, the Upfront Mortgage Insurance Premium is 1.00%, which is decreasing from 1.5%.

FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:

•For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78%, provided the mortgagor has paid the annual premium for at least 5 years.

•For mortgages with terms 15 years and less and with loan to value ratios 90% and greater, then annual premiums will be canceled when the Loan to Value ratio reaches 78%, regardless of the amount of time the mortgagor has paid the premiums.

•Mortgages with terms 15 years and less and with loan to value ratios of 89.99% and less will not be charged annual mortgage insurance premiums.

Mortgage Loan Originator Requirements (New Law)

Anyone acting as a mortgage loan originator (MLO) without and MLO license endorsement will be guilty of a crime punishable by six months imprisonment plus a $20,000 fine. And a broker cannot employ or compansate a real estate licensee for MLO activities unless that licensee has a license endorsement. This law has also given the Department of Realestate (DRE) the authority to deny or revoke a MLO license endorsement or take other action. This amends the MLO requirments for finance lenders and residential mortgage lenders under the Department of Corporation. Senate Bill 1137, effective January 1, 2011.

To verify if a Mortgage Company and Mortgage Loan Originator is licensed you can go to:

http://www.nmlsconsumermortgage.com

KEY INDICATORS [1/11/11]

Gold $1378.50/ounce [down]

Crude Oil (Brent) $97.53/brl [up!]

U.S. Dollar to:

Euro .7749 [up]

Japanese Yen 81.95 [down]

6-mo Treasury Bill Yield 0.17%

10-yr Treasury Note Yield 3.36%

[6-month unchanged, 10-yr up 6 bps]

11th Dist Cost of Funds 1.571%[-]

30-yr Fixed-rate Mortgage 5.12%

15-yr Fixed-rate Mortgage 4.51%

1-yr ARM 3.78%

[HSH average includes jumbo rates: 30-yr down 7 bps; 15-yr down 5 bps; 1-yr ARM down 6 bps]

Freddie Mac weekly average rate 4.77% [prior week: 4.86%]

Mortgage Bankers Association Mortgage Applications Index week ending 12/31:

Overall Up 2.3%; down 3.9% the week prior

Purchase Money Loans:

Down 0.8%; up 3.1% the week prior

Refinancing Loans:

Up 3.9%; down 7.2% the week prior

Jobless Claims 1/1:

409,000 prior week 391,000 Continuing claims down 3500 to 4.103 million

Employment Report Dec:

Unemployment rate fell from 9.8% to 9.4% - 103,000 new payrolls (disappointingly weak)

FannieMae WaysHome- Learn Your Options If Your Drowning In Your Home

Today, January 6, Fannie Mae launched WaysHomeTM, a new interactive video to educate homeowners about their options to avoid foreclosure, motivate them to make the right decisions, and encourage them to seek help. WaysHome is part of Fannie Mae's Know Your OptionsTM consumer initiative to help today's struggling homeowners and is available on KnowYourOptions.com.

Overview
A unique and innovative learning tool, WaysHome allows homeowners to put themselves into real-life situations and make decisions -- then see the consequences of these decisions play out in front of them. Through WaysHome, homeowners can:

1. Participate in an interactive video simulation.
2. Select a character and go through the simulation "playing" that character.
3. Follow characters as they encounter financial hardships and challenges that affect their ability to pay their mortgage.
4. Choose different paths based on real-life situations.
5. Experience the positive outcomes or negative consequences of their choices
(i.e., if they avoid taking action, foreclosure may be their only option).
6. Learn about options that may be available to help.
7. Discover the right paths to avoid foreclosure, know their options, and find their way home.

Benefits to You
Our research shows that many homeowners still don't know about -- or understand -- their options to avoid foreclosure. In fact, many homeowners who are seriously delinquent or in foreclosure have little to no contact with their mortgage company. WaysHome is designed to bridge that gap and encourage homeowners to take action before it's too late.


WaysHome Video Link
http://flsvideo.com/assets/Ways-Home/