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Replies (5)
- Clay Branch, "Georgia Loans"
- Contributions:7835
Another statement from this article cracked me up ( below ), it implies a borrower needs a Realtor to advise them on refinancing an FHA loan.......Nothing against Realtors but if I called 100 of them and asked about the impact of refinancing an FHA loan and closing on the 5th of the month I am guessing only 3 or 4 would understand what I am asking and the ramifications.
"And, of course," said Bonn, "there's no REALTOR® around to tell refinancers (about the policy), so they get hit the worst."
"And, of course," said Bonn, "there's no REALTOR® around to tell refinancers (about the policy), so they get hit the worst."
- Joe Cafiero, "Joe Cafiero"
- Contributions:3220
Amzing that Congress and the fantastic NAR focus on this and not the increased mortgage insurance premuims that are keeping problably millions from refinancing. Also leave it to the NAR to pick themost extreme situation for its article. If this lady closed on the 13 of October, her loan did not fund until the 18th. That is only 13 days of extra interest. At $1349 that equates to at least a $600,000 mortgage at 6%. Now that I am thinking about it, I am calling BS on the whole thing. Off the top of my head, I can not think of FHA rates being that high since the higher loan limits were in place.
- Clay Branch, "Georgia Loans"
- Contributions:7835
Mighty astute there Joe, in fact if they had refinanced before last April they would not be now paying the over double annual MI and would have saved a lot more in interest than the extra interest in the payoff. Yes, the MMI fund is still short for what Congress wants in reserves so we will see more hikes in the MMI fund in 2012, on top of the increase to fund the payroll tax holiday. Still, I would like to see the payoff adjusted to per diem which would also help with scheduling closings so we don't have to bunch them all in around the 21st - 25th.
- wayne lancaster, "funds2"
- Contributions:1175
It is ludicrous that the FHA guidelines still allow an interest penalty when pre paying a loan. It is impossible to justify how that is allowed, as it is the only loan program (including sub prime) where that occurs. It is unfortunate that the mortgage industry lobby is so weak that it has not even made an effort to push for repealing that portion of the FHA bill particularly in light of a 100% increase in the MIP fee recently.
What would be positive is if NAR would coordinate their mortgage related efforts with the MBA.
What would be positive is if NAR would coordinate their mortgage related efforts with the MBA.
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3421
Good article Clay, hilarious that Realtor quote, it is truly amazing how we still manage to close so many refinances without Realtors. Personally when I close a refinance, I always make sure to get the borrowers Realtor, CPA, Financial Advisor, Doctor, Attorney, Gardener and Grocer involved, just to make sure I'm handling the transaction properly.
I doubt we'll see the new MI premiums decrease anytime soon, you have to realize that FHA cannot AFFORD that much portfolio runoff to devalue further the underlying security with loss of yield.
The systematic increases were certainly placed to protect against precisly that.
I doubt we'll see the new MI premiums decrease anytime soon, you have to realize that FHA cannot AFFORD that much portfolio runoff to devalue further the underlying security with loss of yield.
The systematic increases were certainly placed to protect against precisly that.
FHA Payoffs S. 488
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- 5.0/5.0
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Contributions:7835I was surprised to see a Senate bill was introduced this year to change the payoff calculation on FHA loans to per diem interest. Article below.
http://lowes.inman.com/newsletter/2011/11/10/news/161420
The statement below charges the extra interest is, in effect, a prepayment penalty and a potential TILA violation so if the practice is not changed then full disclosure should be implemented. The problem with that is no one knows the exact date they will sell or refinance their loan. In other words, if someone paid their loan off on the 25TH of the month they would be paying an extra 5 days interest in a 30 day month compared to paying an extra 25 days interest if paid off on the 5th. How do you disclose the extra days on the TIL when the loan is originated if you cant see into the future to know the exact date of payoff?
In a letter to acting FHA commissioner Carol Galante, NAR President Ron Phipps said that besides playing "unreasonable and often unexpected burdens on FHA consumers who already face high housing and closing costs," the fees appear to violate the Truth in Lending Act (TILA), as amended by Dodd-Frank.
That law bars prepayment penalties or requires them to be phased out over the next three years. The Federal Reserve's proposed regulations implementing the TILA changes clearly cover fees like FHA's, said Phipps, which force borrowers "to pay interest charges based on an outstanding principal loan amount that has already been fully paid."
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