FHA Streamline Mortgage Insurance being REDUCED!!

Erik Sandstrom

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To all loansafe members:
Today the White House announced they are cutting the mortgage fees charged by the Federal Housing Administrations Refinancing program in another effort to help the languishing housing market recover.

President Obama announced at the afternoon press conference that an estimated 2 - 3 million FHA borrowers will now be eligible to refinance under the revamped program.

Under the revised FHA Streamline refinance program for loans originated prior to June of 2009, borrowers are eligible for up front mortgage insurance premium of 0.01% down from 1% (HUGE Reduction) i'm assuming this is because the borrowers will not get a refund from their previous Upfront MI if they structured the loan that way. Another update - The annual premiums will be CUT IN HALF down to .55% from the recent 1.15%.

I have recently been running into road blocks refinancing homeowners under the FHA streamline refinance because the MI Factor had changed. Even with the huge reduction in rates, the MI payment brought it back to basically what the borrower was paying before the refinance in most cases. FHA Streamlines require that you reduce the current mortgage payment by at least 5%.

This is the REFINANCE Guidelines, Purchase guidelines MI will be increasing! So if you're looking to use FHA financing to purchase a property - do it NOW!

Good news yet again for the recovery of the housing market, I can see things turning around slowly for the better! Feel free to post here on this thread if you have any questions.
 

Cat Damiano

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This was definitely some much needed good news provided by the President today, along with some other changes that will be able to help our military members as well.
 

Erik Sandstrom

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I've turned down so many people Cat for FHA streamlines, this really is going to help out those borrowers significantly. I'll update the post with VA changes as well.
 

jlaraby

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Feb 9, 2012
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Not getting an FHA loan was the second biggest mistake I made when buying a house, other than buying the house itself.
 

Slow Eddie

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Mar 9, 2012
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I can't believe it is going to .0175. That is crazy! That would more than triple my MIP payment (I closed 1/2009). That offsets the positive attributes of the rock bottom interest rates.

If I were to do an FHA streamline after June 11th which I believe is when the new rates kick in, on a 196000 balance my up front premium would be $196 (.001) as opposed to 1960 (.01) and my monthly would be about $90 (.0055) as opposed to $187 (.0115).

Thats good, because the monthly was .005 when I closed in January 2009 and my current payment is $89 per month.

Is my math correct?

Eddie
 

Erik Sandstrom

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That's correct! You're going to want to wait until June to process the loan. The unfortunate news is that FHA purchases will be increasing so if borrowers are looking to get FHA financed to buy a home they should do it NOW.
 

Slow Eddie

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Mar 9, 2012
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I just realized I'm wrong. The up front is going to 1.75 percent and the Annual/monthly is going up 10 bpps.
I just saw another flaw in my math. The HUD press realease reads .01 percent which to me would mean .0001 which would be 19.60 on my loan of 196,000. That almost sounds too good to be true. At least it did to the broker i met with today. What is your take Eric?
 

LaceGA

LoanSafe Member
Mar 26, 2012
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Georgia
Question about FHA Refinance

I am considering refi of FHA loan originated in June '02 which is currently at 6.875% with Chase. I currently owe $95,000 with house assessed @ $133,000 and area values @ $102,000. I contacted Chase regarding the new streamline refi and was told that they have agreed to participate but that they do not have any information on specifics yet. I also contacted my credit union and was told that if $102,000 value was correct that I would not be eligible for conventional loan refi due to 90% ratio needed vs. 97% with FHA. I was also told by Chase that MIP is scheduled to be removed in Nov 2012 and that I could go ahead and do a streamlined refi but that I would not get the 0.001% up front and 0.55% premium because that doesn't start until June 11, 2012. I am confused on what to do. Should I wait until June and go for FHA refi or pay extra on principle to get below the 90% - 80% and refi with conventional loan? I have good-excellent credit with no late payments and debt ratio of less than 36%. I would qualify for FHA streamline based on requirements I've read. Any help would be appreciated!
 
Last edited:

Erik Sandstrom

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Hi Lace,
Welcome to the forum! You're going to want to wait until June when the MI factor changes for the streamline refinances.

If you're looking to purchase a new home with FHA financing you need to do it NOW, within the next couple weeks and pull a FHA case ID before the premium increases.
 

sillron

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Mar 19, 2012
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hello thanks or the information.i spoke with a loan person at a bank around me.i got a FHA loan originated on 8/10/2000.i am paying a mortgage insurance.the loan officer told me i could do a FHA or conventional loan and he told me that if i go FHA streamline i would still have to pay the IMP/PMI,even if the loan is a 15 years fix
do i have to continue to pay the IMP if i get a FHA streamline fix rate for 15years?,should i wait until june?
 

sillron

LoanSafe Member
Mar 19, 2012
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one more thing..since my balance is $48000,and my interest fix rate is 6.50%,should i better get get a conventional fix rate loan?
thanks
 

Erik Sandstrom

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Updating everyone of the changes with MI:

Effective for Case Numbers assigned on or after 4/9/2012:
  • The Up Front MIP (UFMIP) will increase from 1.00% to 1.75%.
  • The Annual MIP on all FHA loans will increase by
  • 1.20% (with LTV ≤ 95% with a term > 15 years)
  • 1.25% (with LTV > 95% with a term > 15 years)
  • 0.35% (with LTV ≤ 90% with a term ≤ 15 years with LTV > 78%)
  • 0.60% (with LTV > 90% with a term ≤ 15 years with LTV > 78%)
  • Effective for case numbers assigned on or after 6/11/2012:
    • The Annual MIP on FHA loans over $625,500 will increase an additional 0.25% (total of 0.35% higher than today
  • Effective for FHA Streamlines with case numbers assigned on or after 6/11/2012:
    • If the FHA loan you’re paying off was INSURED by FHA prior to June 1, 2009:
  • UFMIP is 0.01%
  • Annual MIP is 0.55%
  • If the FHA loan you’re paying off was INSURED by FHA on or after June 1, 2009:
  • UFMIP will be 1.75%
  • Loans up to $625,500: Annual MIP will be either 1.20% or 1.25% based on LTV
  • Loans over $625,500: Annual MIP will be either 1.45% or 1.50% based on LTV
 

Erik Sandstrom

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Hi Sillron,
We should wait until June before proceeding with an FHA Streamline refinance but if you're looking to go from conventional to FHA - you would want to do that now. Same as an FHA purchase, do it NOW - get your case number before April 9th
 

donewithindymac

LoanSafe Member
Dec 5, 2011
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New Jersey
My loan rep was trying to process a HARP 2 Refi for me and just informed me that my loan is only serviced by Fannie Mae not owned by Fannie mae so it does not qualify. Although when I search the property on Fannie Mae's site, it says they own it. Grrrrr. He told me the only thing he can do for me is an FHA with MI. My first loan will have to be combined with my HELOC. Then I'm at around 120% LTV. Will they do that?
 

Cat Damiano

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Your loan rep is not accurate as Fannie Mae doesn't service loans. Your loan servicer would be the entity that you send your payments to.
 

Erik Sandstrom

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Update: FHA Streamlines are now requiring income verification for both new loans with or without appraisals.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
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To follow up with this thread as the guidelines have changed, here are the new MI premiums:

Up front MI premium remains the same at 1.75%

Monthly Premium for 30YR/Fixed rate loans has been lowered from 1.35% to only .85% (big .5 reduction in MI)
Monthly Premium for 15YR/Fixed rate loans are .45% - .70% and in some cases .95% (this is explained below):

Base Loan Amt. LTV & New MIP
≤ $625,500 ≤ 95.00% = 130 bps
≤ $625,500 > 95.00% = 135 bps
> $625,500 ≤ 95.00% = 150 bps
> $625,500 > 95.00% = 155 bps
Term ≤ 15 Years
≤ $625,500 78.01% - 90.00% = 45 bps
≤ $625,500 > 90.00% = 70 bps
> $625,500 78.01% - 90.00% = 70 bps
> $625,500 > 90.00% = 95 bps

This is great news that FHA is starting to be more flexible and focusing on serving borrowers that need financing the most. Any questions of course feel free to ask!