Five years from now, will financing of
Residential housing have a whole new look? Many are predicting so ...
Currently, approximately 90% of new loans closed are backed or guaranteed by the giants Fannie Mae and Freddie Mac. And that percentage is currently growing. Based on recent reports, Loan Originations submitted to FHA were down 49% during the month of June, 2013.
Of course, these numbers (and recent chameleon-like changes) may directly correlate with FHA's recent increases in Monthly-Paid Mortgage Insurance Premiums in April of 2013, as at that time new Borrowers were being informed that Mortgage Insurance would remain in force for the entire life term of their loan. (Rumor is that this may be changing.) * Note: Some 15 year term loans and larger down payments will have an earlier termination date (after 11 years).
Perhaps the reduced numbers of applications reportedly being seen at FHA led to their announcement made on August 15, 2013, that stated, "certain cases" involving Bankruptcy, Short Sales, or Foreclosures could lead to a loan option for Home Buyers after only one (1) year ... IF they qualify in all other terms, and ... IF there were "qualifying Economic Events" that led to their financial/credit issues.
Potential new Borrowers with these severe credit issues in their past, must be aware that they will be required to take and pass Home Buyer Counseling as a condition of any new mortgage they apply for.
These "IFs" ... and the call for mandatory Home Buyer Counseling ... clearly prove that this announcement/change does not come with or provide guarantees for every hopeful new Borrower with past Bankruptcies, Short Sales, and Foreclosures.
Mortgage Lenders, and their Borrowers, will be called upon to provide ample documentation and solid proof that "qualifying Economic Events" did indeed occur or take place within a prior mortgage financing in order to proceed with new financing successfully.
Will Mortgage Financing Have a New Look Soon? Changes with Fannie Mae, Freddie Mac, and FHA ... Stay tuned for new and further developments!
As your Mortgage Lender, I would suggest that you start to make preparations should you be a hopeful Chicagoland Home Buyer having suffered through a Bankruptcy, Short Sale or Foreclosure ... or if you are a Realtor that has potential clients that can be effected by the recent FHA changes ...
* Hoping to Buy a Home or Refinance in the Lincoln-Way Region, Will County, DuPage County, or elsewhere in Chicagoland? Contact Me Today! I'll put my 36 years of mortgage experience and expertise hard to work on your behalf.
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