STACEY'S FHA BLOG: FHA in the news.

Written by:
Stacey Sprain,
NAMP Volunteer Writer

Unless you've been hiding under a rock in recent weeks with no access to media of any sort, it's likely you've noticed a lot of news briefs, bulletins, newsletters, email alerts, articles and automatic updates headlining FHA-related issues. Let's take a look at what all the fuss is about.

FHASecure Initiative
First came the press release from President Bush on August 31st. A copy copy can be found at http://www.fha.gov/press/2007-08-31release.cfm. The FHASecure plan is a temporary program designed to help homeowners caught in upward adjusting ARM payments that they cannot afford. With an estimated 1.5 million foreclosures out there, FHASecure has obviously generate a LOT of media buzz.

However, the program doesn't come without questions as to exactly how many borrowers the program will actually assist. It's very important that homeowners and originators are clear on the exact requirements of the program. Such requirements are laid out in HUD's Mortgagee Letter 2007-11 which can be viewed in full text at http://www.fha.gov/reference/ml2007/07-11ml.doc. Due to a LOT of incoming questions from both homeowners and mortgage originators, HUD has hosted a recent national conference call and has posted commonly asked questions at http://www.fha.gov/about/fhasindqa.cfm. I highly suggest anyone that is interested in participating in the FHASecure Initiative read through the questions at the website so eligibility and guideline requirements are as clear as possible. HUD has also created a nicely summarized FHASecure Fact Sheet that can be accessed at http://www.fha.gov/about/fhasfact.cfm.

The biggest challenge with FHASecure seems to be finding a lender that offers the program. As of 9/24 am, the only major lender I have found seems to be GMAC. I am told that Flagstar is working on the rollout, but that other major players such as Countrywide and Wells Fargo are still weighing their options. Not even many brokers are offering the program yet.

H.R. 1852- Expanding Homeownership Act of 2007
HUD's second burst of media attention has been in relation to the swift movement of H.R. 1852 through the House of Representatives and on to the Senate. This proposal has been around is some form since early 2006 but is receiving more attention and support in its current form than it did last year.

You can read the major contents of the bill proposal at http://www.govtrack.us/congress/billtext.xpd?bill=h110-1852 or
http://thomas.loc.gov. A passage of this bill would completely overhaul the FHA home loan program as its been known to date. The bill proposes risk based premiums based on borrower credit profile, source of downpayment, amount of required downpayment, and sets forth simplified maximum mortgage calculations in addition to numerous other changes.

This bill is one worth watching as it has the potential to have a HUGE impact on the mortgage industry and potential homeowners across the country!
H.R. 2139-To Modernize The Manufactured Housing Loan Insurance Program Under Title I of The National Housing Act
The purposes of this act are:
To provide adequate funding for FHA-insured manufactured housing loans for low and moderate income homebuyers during all economic cycles in the manufactured housing industry;
To modernize the FHA Title I insurance program for manufactured housing loans to enhance participation in Ginnie Mae and the private lending markets; and
To adjust the low loan limits for Title I manufactured home loan insurance to reflect the increase in costs since loan limits were last increased in 1992 and to index the limits to inflation.
The text of the current H.R. 2139 proposal can be viewed at http://thomas.loc.gov.

I realize all of this can be a little overwhelming; especially for those without current FHA-related knowledge and experience. I have found the following resource helpful in explaining the standard process of how a bill becomes a law in our U.S. government: http://www.vote-smart.org/resource_govt101_02.php. A basic understanding of the process is very helpful in understanding expectations and time frames in regards to tracking H.R. 1852 and H.R. 2139.

One thing is for certain, FHA lending has the potential to make a huge impact in the near future to those of us involved in the mortgage industry!

**For live, instructor-led online FHA training classes visit: http://www.FHAtraining.org.

About the Writer. As one of NAMP's volunteer writers, Stacey Sprain is currently a NAMP member in good standing and is a NAMP Certified Ambassador Loan Processor (CALP). If you would like to become a volunteer writer for NAMP, please email us at: blog@mortgageprocessor.org.