The cost of getting a home mortgage (loan fees) from Fannie Mae or Freddie Mac are set to increase and will affect more borrowers, including those with stellar FICO credit scores. The fee changes actually were announced last year and they are now scheduled to go into effect on March 1 for Freddie Mac and April 1 for Fannie Mae.

According to the two mortgage giants, it is the first time since 2009 that they are raising risk fees and broadening the scope of borrower that will be affected. To avoid the new fees or to get a discount, most borrowers will need FICO scores of 740 or better and down payments of 25% or more. Lenders could absorb the cost, but most are expected to add it to their consumer loan costs immediately upon enactment.

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Tags: buyers, credit reports, Florida, mortgages, real estate

Back in January of last year, HUD announced it was waiving its rule of prohibiting the 90 day waiting period for obtaining an FHA mortgage on a flipped property. The change was originally intended to temporarily help boost the sagging housing market and was set to expire on January 31, 2011.

On Friday of last week, FHA Commissioner David Stevens extended the “anti-flipping rule” waiver through January 31, 2011, and said the move was based on HUD’s intention to help “accelerate the re-sale of foreclosed upon homes in neighborhoods struggling to overcome the possibility of property abandonment and blight.”

Continue Reading FHA Extends 90 Day Property Flipper Waiver

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Federal lawmakers recently voted to keep the maximum size of loans guaranteed by Fannie Mae, Freddie Mac and FHA for high-cost areas at their current levels ($729,750 and $625,000). President Obama finally signed the legislation, thereby extending the loan limit through 2011.

The provision means homebuyers and homeowners in expensive housing markets like California, New York, Alaska and Hawaii will continue to get a break on interest rates when they purchase or refinance. Conforming loans come with cheaper interest rates versus non-conforming or so called “jumbo” mortgages, because they are backed by the government lending entities.

While most areas will remain at the $417,000 maximum loan amount, it will continue to make a huge difference in the various high cost areas that exist around the country.

Continue Reading High Cost Area Loan Limits Extended Through 2011

Tags: FHA, Interest Rates, legislature, mortgages

Fair Isaac and Company (FICO) announced the release of a new credit scoring product called the FICO 8 Mortgage Score. It was specifically designed to help lenders make better credit decisions in predicting mortgage performance risk and is now available from all three major U.S. credit reporting agencies – Experian, Equifax and TransUnion.

According to FICO, the FICO 8 Mortgage Score will analyze a borrower’s full credit history on file to deliver a better assessment of mortgage repayment risk and hopefully help cut down on the number of future foreclosures. FICO claims a 15% performance improvement over the standard credit scores currently available and says the new product includes additional score reason codes to help lenders understand and explain the scores to mortgage applicants.

Continue Reading FICO Announces New Mortgage Credit Score

Tags: buyers, credit reports, mortgages

Congress has voted to keep the maximum size of loans guaranteed by Fannie Mae, Freddie Mac and FHA at their current levels through the end of 2011. For buyers in high cost areas, the maximum mortgage amount will remain at $730,000 for Fannie/Freddie loans and at $625,000 for FHA mortgages.

Anything above these limits set by Congress falls into a category known as “Jumbo” loans. During the financial crisis, mortgage lenders became far less willing to make these types of loans and thus Congress had to act. A typical level for Jumbo loans used to be around 18% annually. This year, they’ve made up roughly 5% of the mortgage market. However, this is likely to change as the premium gap for borrowers who receive jumbo loans has fallen to about a 0.8 percentage points. Prior to the crisis, the premium level was 0.25 percentage points.

Continue Reading Congress Extends Loan Limits

Tags: buyers, legislature, mortgages