FHA To Make Premium Fee Change Effective Oct 4, 2010

By On August 11, 2010 · Leave a Comment

With all the recent news about H.R. 5981, I thought I’d share that we now have through the entire month of September before the change will take place with FHA mortgage insurance premium fees. It will effect new case numbers on or after October 4, 2010.  (FHA case numbers are assigned when the lender orders an appraisal on the property).  SO – borrowers payments/structure won’t change on purchase agreements  received before October 4th, 2010.  This is a good reason for those of you looking to buy a home using a FHA loan, to find a home in September!   If you don’t understand the impact, contact me and I’ll explain or go through numbers specific to you!  It can make a big payment difference depending on loan amount.

STATEMENT BY DEPUTY ASSISTANT SECRETARY VICKI BOTT

 Tuesday, August 10, 2010

 ”Last week, FHA Commissioner David H. Stevens announced plans for implementing FHA’s new mortgage insurance premium structure. As we work to publish a Mortgagee Letter, it is our intention to announce that based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010

“Over this past week, the industry responded with support of the new fee structure,  but voiced strong concern about having system changes ready in time to meet the original September 7, 2010 deadline. Since these system changes impact regulatory disclosures, lenders expressed they must have the additional time to implement and test systems. FHA took this feedback seriously and has accommodated the need for additional time.”

Note: FHA will lower its upfront premium simultaneously with the increase to the annual premium. FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years 

 

To read about the original announcement on H.R. 5981, click here.

Carrie Guarrero is Senior Vice President and Producing Manager of Cornerstone Mortgage Company, Minnesota. Carrie has over 20 years experience working with first time home buyers and prides herself in her ability to provide a positive home buying experience for those first time buyers. ****To find out if you qualify for any of the first time home buyer programs whether that be down payment assistance, closing cost assistance or low fixed interest rates, please contact Carrie. ****To get started on the mortgage prequalification process, click here. ****To attend the next Free Minnesota First Time Homebuyer Class, click here to register..

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