Fha Loans

AT a time when home-ownership rates are at record levels, some 72 percent of all white adults own their homes, compared with 46 percent of African-American and Hispanic adults.Closing the gap would give millions of African-Americans and Hispanics a shot at the "American dream" of homeownership. It would also give lenders a healthy boost in their profits.Why, then, are those who originate mortgages discriminating? Since this is the '90s and few fools actually put sheets on their heads and hurl racial expletives openly, the discrimination is probably unconscious.

FIRST-TIME homebuyers -- especially those with limited cash on hand -- are likely to be the primary beneficiaries of congressional legislation passed Oct. 8 that expands the reach of the federal government's largest mortgage program.Under the new legislation, the Federal Housing Administration (FHA) will be able to insure low-down-payment home loans as large as $197,621 in nearly three dozen "high cost" metropolitan areas across the country. FHA loans in most other markets will get a new upper limit of $109,032 -- up from the $86,317 limit currently in effect.

Area lenders are beginning to pull FHA adjustable-rate mortgages off their product menus as they anticipate that the FHA's authority to insure such loans is rapidly running out because of high consumer demand.The loans, known as ARMs and insured by the Federal Housing Administration, represent approximately 25 percent of all FHA loans. They are popular because their initial rate generally is 1 percentage point to 2 percentage points lower than FHA or conventional 30-year fixed-rate mortgages.

The Department of Housing and Urban Development wants to raise the maximum FHA loan limit, which -- if approved by Congress -- would allow more homebuyers to take advantage of the program and create more competition in the mortgage marketplace.HUD Secretary Andrew M. Cuomo said last week that the Clinton administration would place in its 1998 budget a proposal to raise the Federal Housing Administration maximum to $227,150.That figure would put it on a par with conventional limits made by giant mortgage lenders Fannie Mae and Freddie Mac.Current FHA loan maximums vary depending on metropolitan areas, with the ceiling on the highest possible loans in high-cost areas set at 75 percent of the maximum conforming rate.

The percentage of Maryland homeowners behind in mortgage payments or in foreclosure during the second quarter was slightly higher than the national average, according to the Mortgage Bankers Association of America.During the April-June period, MBA's National Delinquency Survey showed that 4.83 percent of the home loans in Maryland were at least 30 days past due.Nationally, the seasonally adjusted delinquency rate on one- to four-unit homes was 4.35 percent, the survey showed.The delinquency rate for conventional mortgages in Maryland came in at 2.73 percent, slightly less than the national figure of 2.79 percent.

The recently passed bill to reduce closing costs for first-time buyers may not be as helpful for those who use FHA loans, according to some lenders.One provision of the bill requires sellers to pay the local transfer and recordation taxes for the buyer, unless the sales contract says otherwise. Typically, buyers pay half these taxes.But FHA rules require the buyer to pay for customary closing costs. In many cases, if a seller or lender pays for a buyer's closing costs, the amount the buyer can borrow is reduced, increasing the down payment and the money needed at closing.

NEW YORK -- If the real estate industry has its way, more Americans will be eligible for home mortgages backed by the Federal Housing Administration. Legislation before Congress, strongly supported by Realtors and mortgage bankers, would let the FHA insure larger loans, for higher-income people, than it does today.Obviously, it's an election year. A Congress that pretends to want smaller government is preparing to compete with private mortgage insurers, in order to pass out even more goodies to the middle class.

Mortgage lenders are making a practice of approving marginal loans to meet reinvestment requirements in the inner city, leading to high default and foreclosure rates and deterioration of once-stable Baltimore neighborhoods, housing advocates say.Instead of reducing their risk by putting borrowers into federally insured mortgage programs, lenders should help buyers get extensive pre-purchase counseling, approve conventional loans or reject the application, said...

WASHINGTON -- The proposal to raise the ceiling on FHA loans -- which would have made thousands more homebuyers eligible -- has fallen victim to partisan bickering in the Senate.Passed by the House but stalled in the Senate, the Housing and Community Development Act of 1994 would have eased restrictions on eligibility for mortgage insurance from the Federal Housing Administration.The FHA insures mortgages for families who cannot qualify for mortgage insurance from private insurers.In high-priced areas, including Baltimore, the FHA insures mortgages up to $151,725.

For years, Federal Housing Administration mortgage financing has been dismissed as virtually useless in many cities.The FHA, which insures mortgages, had pegged the maximum loan amount so low that the program was ignored by many consumers and brokers in areas where home prices are high.But that is changing. A higher maximum amount for FHA loans, coupled with lower home prices in most areas and a greater flexibility in FHA loan terms, has again made FHA a viable form of home financing.Nationally, about 18 percent of purchases of single-family homes in the past quarter were financed by FHA-insured loans, according to the Research Department of the National Association of Realtors.

It was the mortgage of last resort when home sales were booming. Buyers balked at the paperwork. Sellers hated the home-repair rules. What a difference a housing bust makes. "Now, it's almost automatic that it's FHA," said Keith L. Cross, a real estate agent with Century 21 Downtown in Baltimore. Mortgages insured by the Federal Housing Administration are enjoying a tremendous resurgence as beleaguered lenders and private insurers make it harder to qualify for conventional loans. Home buyers and refinancing owners nationwide took out nearly 530,000 FHA loans in the first half of the year, 160 percent more than in the corresponding months last year.

What's wrong with down-payment "gift" programs, in which all or most of a homebuyer's equity stake comes from the seller, funneled through a third party? And why is the federal government determined to ban them as quickly as possible? Here's how they work: Say you want to buy a house, but you don't have the required cash for a down payment. You sign up with a third-party intermediary - typically a tax-exempt charitable organization that advertises its specialty. The seller of the house sends a contribution to the organization roughly equal to the money you need.

If you're a first-time homebuyer, you'll find it a little harder to qualify for a mortgage than the first-time buyer who walked in your shoes two years ago. The credit crunch on Wall Street and record foreclosure rates have made investors nervous about homebuyers who have small down payments and lower credit scores. While the number of first-time buyers is down, there are plenty of folks who are tempted by falling home prices and low interest rates. What kinds of loans are out there for them?

A Gaithersburg nonprofit that provides down payment assistance to homebuyers is battling a government plan to ban the practice by the end of the month. AmeriDream Inc. is one of the biggest groups that help low- and moderate-income buyers with the 3 percent down payment required for loans insured by the Federal Housing Administration. The aid is financed by money from home sellers. About a third of the 314,000 people who received FHA loans in the 2006 fiscal year had down payment assistance from nonprofits.

If real estate finance is the art of the possible, what's possible right now for homebuyers and sellers worried about rising mortgage rates, Wall Street bond market jitters and soft home prices? Plenty. Although certain aspects of today's postboom marketplace might look scary on any given day, most of the traditional problem-solving tools of real estate finance are still at your disposal, whether you're a buyer or a seller. Interest rates of 6 3/4 percent and higher needn't be deal breakers or impediments to selling or buying.

WASHINGTON -- The Department of Housing and Urban Development plans to seek a ban on a certain type of down payment assistance that has grown sevenfold this decade and contributed to a surge in foreclosures of government-backed mortgages. Nonprofit groups, such as Nehemiah Corp. of America and AmeriDream Inc. of Gaithersburg, Md., provide the down payment help and are then reimbursed by the seller. The programs are "a contributing factor of increased risk in our portfolio" of loans, HUD spokesman Lemar Wooley said in an e-mail.

With the subprime mortgage industry in virtual free fall, where do homebuyers with less than perfect credit turn for financing? The news reports are grim: Not only have dozens of subprime lenders closed their doors or cut back sharply on new mortgage offerings, but they're also severely tightening the loose underwriting standards that got them into trouble. As a result, many people who would have been approved for a loan months ago now find all the doors suddenly closed. But here's some potentially helpful news: There is a mortgage source that is actually expanding its business nationwide for credit-impaired and first-time home purchasers.

A record number of homeowners entered foreclosure at the end of last year and more are making late mortgage payments, especially those with high-risk subprime and government-financed loans, according to a quarterly survey by the Mortgage Bankers Association released yesterday. In other developments, subprime lender New Century Financial Corp., of Irvine, Calif., said yesterday that the Securities and Exchange Commission had demanded documents and that the New York Stock Exchange had suspended the company from its stock listings.

WASHINGTON - Federal Housing Secretary Alphonso Jackson has an urgent request for potential first-time buyers, especially those with limited or imperfect credit histories: When you shop for a home this spring or summer, take a hard look at the new, consumer-friendly breed of FHA mortgages now rolling into the marketplace. Equally important, be wary of the higher rates, fees and penalties that often come with loans in the "subprime" market. Jackson has a special reason for wanting to persuade first-time buyers to check out FHA loans.

WHEN YOU PAY off your mortgage, the interest charges stop immediately, correct? Most of the time, the answer is yes. But for thousands of homeowners every year, the meter just keeps running. They are charged days or weeks of interest beyond the legal life of their mortgages. If they refinance or close on a new house on the 10th day of the month, they are charged interest on their mortgage through the final day of the month - 20 or 21 days later. If they pay off the loan on the 20th, they owe another 10 or 11 days in interest.