Charlotte Mortgages

In Charlotte Mortgage News the Senate votes to pass huge housing bill aimed at stabilizing the mortgage industry.

The Senate voted 72 to 13 today to pass the… get ready for it….. “House Amendment to Senate Amendment to the House Amendments to the Senate Amendment to HR 3221; Foreclosure Prevention Act of 2008.”  Now that’s a mouth full!  The bill is pretty long so I am going to summarize if that’s ok with everyone.

FIRST THE GOOD…
This bill will reassure mortgage bond investors about the stability of the mortgage giants Fannie Mae and Freddie Mac.  This ensures plenty of money for new home loans for years to come.  Many will say that it comes with a price, but my argument is that everything comes with a price.  The price to not support Fannie/Freddie would be greater.  Imagine a world without mortgage bankers/brokers… my credit union has like 3 loan program and you better have 20% down!  If I may speak frankly, I like my job and it probably wouldn’t exist anymore without a secondary market for mortgage bonds.

Conforming loan limits increase permanently from $417,000 to $625,500.  All I have to say is YAHOO!!!

FHA will be empowered to help troubled homeowners refinance their subprime loans to more affordable fixed rate loans.  Some legislators have estimated the bill could help as many as 400,000 Americans avoid foreclosure.  RealtyTrac said 740,000 properties received some form of foreclosure notice in the second quarter which is a 121% increase from the second quarter of 2007.  This new initiative could help homeowners escape risky adjustable loans before its too late.

First-time homebuyers also will receive a tax loan credit up to $7,500, but this part is only valid from April 2008 - June 2009.  The “credit” will be repaid over the next 15 years by the homeowner.

NOW THE BAD…
I am not happy about some of the changes being made to FHA.  They are raising the minimum cash investment required to buy a home from the 3% we have all come to knwo and love to 3.5%  This is not the end of the world, but grumpy old Olan doesn’t like it.  I think the 3% rule is one of the subtle beauties of FHA… a little moderation in a world of extremes.  I don’t think the answer to increasing homeownership is to lend everybody 100%  nor do I think the answer to increasing foreclosures is kill every potentially risky program over night.  I don’t think the 3% requirement is a problem, but I do like that fact that they didn’t go nuts and up it 5%.  Thank you Congress. (I guess)

Seller-funded down payment assistance programs will no longer be allowed.  I actually don’t hate this long-term, but in the immediate future it is going to slow down an already slowing market.  Timing could be better, but if you’re in a hole you gotta stop digging sooner or later.

The loans FHA makes to troubled homeowners to help them out of risky mortgages will also come with a future penalty.  FHA will recapture some cash from the profits when these homes are sold.  This will lower the potential cash available for reinvestment into future real estate.  I am not sure how they are going to collect, but I am sure we will hear more soon.  

A COUPLE SIDE NOTES…
Both Presidential Canidates are on record in support of the bill. 

The CBO estimates the actual cost to taxpayers to be right at $25 Billion.

There are more changes coming to FHA through this bill.  I will write more on the subject once I have time to read the entire bill… its only 700 pages so it shouldn’t take long!

Myers Park Mortgage is a HUD approved lender that offers FHA and VA (Veteran) loans, conventional and Jumbo loans for Charlotte area real estate.  We lend in NC, SC, TN, VA, GA, and IN, but specialize in the Charlotte Metro. (Lake Norman, Concord, Harrisburg, Matthews, Mint Hill, Pineville, Monroe, Fort Mill, Lake Wylie, Gastonia)

Call today to apply at 980-721-7478 or APPLY ONLINE.

Tags: Charlotte FHA loans, Charlotte Mortgage News, FHA, FHA Loans, First Time Homebuyers