The implementation date will now be February 15, 2010 instead of January 1. Here it is straight from the horses mouth (that is, from HUD):
Important FHA notice for all mortgagees:
Delayed Implementation Date for New Requirements in ML 2009-28
Enactment of ML 2009-28, Appraiser Independence, will be delayed until February 15, 2010. ML09-28 (originally planned for a January 1, 2010 implementation) has two parts: a) prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and b) appraiser selection in FHA Connection. The effective date for both sections of this guidance will now take effect for all case numbers assigned on or after February 15, 2010. This extension will provide FHA and lenders additional time to adjust systems to accommodate the changes.
For the first time ever, FHA appraisals have effectively actually had fewer extra requirements than conventional loan appraisals. This has been corrected effective April 1st with HUD Mortgagee Letter 2009-09 which establishes appraisal requirements for declining (in other words, most) markets. Of course, many of these policies have already been implicated in practice by lenders.
Just a quick heads up about a change to the guidelines for the FHA 95% loan to value cash out refinance program effective for all case numbers issued after January 1, 2009. This change does not apply to the standard 85% loan to value program.
The guidelines already included additional requirements that many loan officers have overlooked when taking applications for 95% loan to value cash out refinances: Read the rest of this entry
One of my biggest pet peeves is the phrase I often hear bandied about that ‘FHA is the new subprime.”
No, it isn’t. And knock on wood, it never will be. FHA does provide an opportunity for borrowers who have had credit problems to get a loan. But the differences between FHA doing that and subprime loans doing that are that FHA requires common sense from the underwriter and FHA holds the lender accountable for their default rate. There isn’t an arbitrary rule that says “OK, you’ve been late 1×30 on your mortgage in the last twelve months, so you qualify. We don’t care why it happened, or whether the situation is likely to happen again in the next 3 months. You fit the matrix, you get the loan.”
