Higher Premiums on FHA Loans Coming
HUD plans to raise annual premiums for FHA-insured loans by 25 basis points in April. Included in President Obama’s budget proposal for fiscal year 2012, the change will boost the premium to 115 basis points on FHA-backed single-family loans with loan-to-value ratios above 95 percent.
FHA has the authority to hike the premium without congressional approval, says HUD Secretary Shaun Donovan.
Source: “Higher Premiums on FHA-Insured Loans,” American Banker, Brian Collins (02/14/11)
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FHA Delinquencies Decline for Third Month
For the third consecutive month, the number of delinquent home mortgages insured by the Federal Housing Administration has declined.
The delinquency rate is still high – 8.5 percent in April – but that is down from 9.4 percent in January.
The FHA was unwilling to applaud this as good news. “We’re not declaring victory by any stretch,” says David Stevens, the FHA’s commissioner. “There’s plenty of room for caution.”
But outside analysts were more positive. “It’s a very important trend to the extent that we’re not continuing to get worse,” says Thomas Lawler, an independent housing economist in Leesburg, Va.
Source: The Wall Street Journal, Nick Timiraos (06/07/2010)
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4 out of 10 Recent Buyers Used FHA Loans
According to the most recent REALTORS® Confidence Index, 39 percent of recent buyers purchased a home with a Federal Housing Administration-insured loan. REALTORS® who took part in the November survey also reported that the number of first-time home buyers continued to climb to 51 percent.
“FHA helps provide affordable mortgage financing to home owners, particularly first-time home buyers who are so important in drawing down inventory to help stabilize the current housing market,” said NAR President Vicki Cox Golder. “These recent survey results reaffirm that, despite its current challenges, FHA is a critical part of the American housing fabric.”
Distressed Sales, HVCC Concerns
The RCI results also indicated that distressed sales increased to 33 percent of all home sales last month, and that both investors and first-time home buyers are competing for these properties. The preponderance of distressed properties on the market has also influenced buyers’ perceptions of other homes for sale. REALTORS® report that many buyers have pricing expectations that treat every property as if it were in foreclosure.
In addition, REALTORS® expressed ongoing concerns with the impact of the Home Valuation Code of Conduct on recent appraisals. According to some survey respondents, inexperienced or out-of-area appraisers continue to rely heavily on sales prices of distressed properties, even when other comps are available.
“As the first, best source for real estate information, REALTORS® have their finger on the pulse of current housing trends, and their knowledge and experience offer valuable insights into today’s real estate market,” Golder said. “We know that an economic recovery is not possible without a housing recovery, and we will continue to work with policymakers at all levels to ensure that this happens.”
—NAR
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