FHA Mortgage Reform Newsflash: Finally - Some Good News!

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According to several reports I have read, Senator Tom Coburn from OK, whom I came down hard on in a previous post, has let it be known that his objections to the FHA reform bill are small and primarily have to do with reverse mortgages. In an exchange with Senator Charles Schumer of NY on the Senate floor Wednesday morning, Senator Coburn hinted that he may be willing to limit debate on the bill and amendments and it may be possible for the bill to come up for a vote as early as next week!

This is very good news since we may end up with the reform bill passed in addition to a one year delay in the new risk based mortgage insurance, which I believe needs more work before it is implemented.

I know that in many areas even raising the FHA limit to $417000 would not be much of a help for troubled homeowners. But in a large part of the country, this will provide some needed relief to a lot of borrowers who are not delinquent on their mortgages but are facing ARM resets but don’t qualify for any of the special plans proposed so far. Not to mention mortgage brokers and bankers who have piles of loan files on their desks with no way to help them now.

It is definitely time that loan officers get themselves up to date on FHA programs and guidelines if they haven’t already. One program that I would like to remind everyone about is HUD’s $100 down program on their foreclosure homes. It is a great opportunity for many renters to become homeowners at the bottom of a market cycle - the very best time to buy. It is a great time to market FHA loans to renters.