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FHA Streamline Refinance Announcement from HUD
FHA Streamline Refinance Announcement from HUD
FHA Streamline Refinance Announcement from HUD
FHA Streamline Refinance Announcement from HUD
FHA Streamline Refinance Announcement from HUD
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FHA Streamline Refinance Announcement from HUD

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  • The FHA streamline refinance program has been around for quite a while and is designed to allow borrowers who are current on their loans to 'roll-down' their interest rate with little effort. According to the HUD website, the basic requirements are that it must be an existing FHA loan, the mortgage must be current (one time 30-days late, if last three payments made on time), the refinance must result in a lower monthly P&I, and there is no cash back. In the majority of cases government guidelines say that no new appraisal required (the original loan price is used), no new credit review is required, no verification of employment or income is required, and no cash back is allowed
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  • 1. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONERDate: March 6, 2012To: All Approved MortgageesMortgagee Letter 12-4Subject Single Family Mortgage Insurance: Annual and Up-Front Mortgage Insurance Premium – ChangesPurpose This Mortgagee Letter (ML) announces changes to the FHA Single Family Annual Mortgage Insurance Premium (Annual MIP) and Up- Front Mortgage Insurance Premium (UFMIP). Changes are applicable to all Single Family (SF) Forward Mortgage programs except those noted in the section below titled, “Exceptions to Announced Premium Changes”. Current Annual MIP and UFMIP remain unchanged for those excepted programs and products at this time.Effective Date These changes are effective for FHA case numbers assigned on or after April 9, 2012, unless otherwise specified below. Mortgagees must continue to comply with the requirements of ML 2011-10 concerning requests for, and cancellation of, FHA case numbers. Specifically, mortgagees must: request case numbers only when they have an active loan application for the subject borrower and property; and certify at the time of requesting a case number that they have an active loan application for the subject borrower and property; and provide the subject borrower’s name and social security number for all new construction (proposed construction and existing construction less than one year old). Continued on next page 1
  • 2. Mortgagee Letter 12-4, ContinuedAffected Topics Below is a list of the blocks in the subject handbook that are affected. HUD 4155.2 Lender’s Guide to Single Family Mortgage Insurance Process 7.3.e, Reference Chart: UFMIP and Annual MIP for Mortgages with Terms More Than 15 Years 7.3.f, Annual Premiums for Mortgages with Terms More Than 15 Years 7.3.g, Reference Chart: UFMIP and Annual Premiums for Mortgages with Terms Less Than 15 YearsIncrease to On December 23, 2011, the President signed into law the TemporaryAnnual Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), whichMortgage requires FHA to increase the Annual MIP it collects by 10 basis pointsInsurance (bps). This change is effective for case numbers assigned on or afterPremium April 9, 2012. The table below shows the new effective annual premium rates by amortization term, base loan amount and LTV ratio. It also shows when the new Annual MIP takes effect, based on FHA Case Number assignment date. Term > 15 Years Base Loan Amount LTV Effective Annual MIP Any Amount ≤ 95.00% April 9, 2012 120 bps Any Amount > 95.00% April 9, 2012 125 bps Term ≤ 15 Years with LTV above 78% Any Amount ≤ 90.00% April 9, 2012 35 bps Any Amount > 90.00% April 9, 2012 60 bps Note: SF forward mortgages with amortization terms of 15 years or less, and a loan-to-value (LTV) ratio of 78 percent or less, remain exempt from the Annual MIP (see Mortgagee Letter 2011-35). Continued on next page 2
  • 3. Mortgagee Letter 12-4, ContinuedIncrease to FHA is also exercising its pre-existing statutory authority to add anAnnual additional 25 bps to mortgages with base loan amounts exceedingMortgage $625,500. This change is effective for case numbers assigned on orInsurance after June 11, 2012.Premium onMortgages with The table below shows the new effective annual premium rates bya HighOutstanding amortization term, base loan amount and LTV ratio. It also showsBase Loan when the new Annual MIP takes effect, based on FHA Case NumberAmount assignment date. Term > 15 Years Base Loan Amount LTV Effective Annual MIP ≤ $625,500 ≤ 95.00% June 11, 2012 120 bps ≤ $625,500 > 95.00% June 11, 2012 125 bps Above $625,500 ≤ 95.00% June 11, 2012 145 bps Above $625,500 > 95.00% June 11, 2012 150 bps Term ≤ 15 Years with LTV above 78% ≤ $625,500 ≤ 95.00% June 11, 2012 35 bps ≤ $625,500 > 95.00% June 11, 2012 60 bps Above $625,500 ≤ 90.00% June 11, 2012 60 bps Above $625,500 > 90.00% June 11, 2012 85 bps Note: SF forward mortgages with amortization terms of 15 years or less, and a loan-to-value (LTV) ratio of 78 percent or less, remain exempt from the Annual MIP (see Mortgagee Letter 2011-35).Decrease to For all SF Forward Streamline Refinance transactions that areAnnual refinancing FHA loans endorsed on or before May 31, 2009, theMortgage Annual MIP will be 55 bps, regardless of the base loan amount. TheInsurance endorsement date is on the Case Query screen in FHA Connection.Premium on This change is effective for case numbers assigned on or afterCertain June 11, 2012.StreamlineRefinanceTransactions Continued on next page 3
  • 4. Mortgagee Letter 12-4, ContinuedIncrease to The UFMIP for affected SF forward mortgages will be increased fromUp-Front 1 percent to 1.75 percent of the base loan amount. This increaseMortgage applies regardless of the amortization term or LTV ratio. FHA willInsurance continue to permit financing of this charge into the mortgage and willPremium continue to calculate actual premium charges against the base loan amount before adding any financed UFMIP. This change is effective for case numbers assigned on or after April 9, 2012.Decrease to For all SF Forward Streamline Refinance transactions that areUp-Front refinancing existing FHA loans that were endorsed on or beforeMortgage May 31, 2009, the UFMIP will decrease from 1 percent to 0.01Insurance percent of the base loan amount. The endorsement date is on the CasePremium on Query screen in FHA Connection. This change is effective for caseCertain numbers assigned on or after June 11, 2012.StreamlineRefinanceTransactionsExceptions to The changes specified in this ML apply to all mortgages insured underAnnounced FHA’s Single Family Mortgage Insurance Programs except:PremiumChanges Title I Home Equity Conversion Mortgages (HECM) Section 247 (Hawaiian Homelands) Section 248 (Indian Reservations) Section 223(e) (Declining Neighborhoods) Continued on next page 4
  • 5. Mortgagee Letter 12-4, Continued Please address any questions about the topics in this Mortgagee Letter to the FHA Resource Center at 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number via TTY by calling the Federal Information Relay Service at 1-800-877-3339.Signature __________________________________ Carol J. Galante Acting Assistant Secretary for Housing – Federal Housing Commissioner 5

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