FHA Mortgage Insurance Premium Changes 2012
May 4, 2012 by Paul Bayarena · Leave a Comment
Up Front and Annual Mortgage Insurance Premium (UFMIP and annual MIP) Increases for all FHA Loan transactions and Decreased for Certain Streamline transactions.
As announced March 6th, 2012 in Mortgagee Letter 12-4 and illustrated in the chart below.
Up Front and Annual Mortgage Insurance Premium (UFMIP and annual MIP) Increases.
FHA increased the upfront mortgage insurance premium (UFMIP) by .75 bps for all purchase and refinance transactions with case numbers assigned on or after April 9, 2012. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage and will continue to calculate actual premium charges against the base loan amount before adding any financed UFMIP.
FHA increased the annual mortgage insurance premium (MIP) by .10 bps for all purchase and refinance transactions with case numbers assigned on or after April 9, 2012.
FHA Mortgage Insurance Premium Changes 2012
| Mortgage Insurance Premiums | ||||
| Loans > 15 years | ||||
| Case #’s prior to April 8, 2012 UFMIP=100bps Case #’s on or after April 9, 2012 UFMIP = 175bps |
Annual Premium | |||
| LTV | Case #s Through April 17, 2011 | Case #s On/After April 18, 2011 through April 8, 2012 |
Case #s On/After April 9, 2012 |
|
| <=95.00 percent | 85 bps | 110 bps | 120bps | |
| >95.00 percent | 90 bps | 115 bps | 125bps | |
| Loans <= 15 years and above 78% | ||||
| Case #’s prior to April 1, 2012 UFMIP=100bps Case #’s on or after April 1, 2012 UFMIP = 175bps |
Annual Premium | |||
| LTV | Case #s Through April 17, 2011 | Case #s On/After April 18, 2011 through April 8, 2012 |
Case #s On/After April 9, 2012 |
|
| <=90.00 percent | None | 25 bps | 35bps | |
| >90.00 percent | 25 bps | 50 bps | 60bps | |
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).
Increase to Annual Mortgage Insurance Premium on Mortgages with a High Outstanding Base Loan Amount
FHA is also exercising its pre-existing statutory authority to add an additional 25 bps to mortgages with base loan amounts exceeding $625,500. This change is effective for case numbers assigned on or after June 11, 2012.
Note: Jumbo/High Balance guidelines will be updated at a later date to reflect the June changes.
| Term >15 Years | |||
| Base Loan Amount | LTV | Effective | Annual MIP |
| < $625,500 | < 95% | June 11, 2012 | 120bps |
| < $625,500 | > 95% | June 11, 2012 | 125bps |
| Above $625,000 | < 95% | June 11, 2012 | 145bps |
| Above $625,000 | > 95% | June 11, 2012 | 150bps |
| Term <= Years with LTV above 78% | |||
| < $625,500 | < 95% | June 11, 2012 | 35bps |
| < $625,500 | > 95% | June 11, 2012 | 60bps |
| Above $625,000 | <=90% | June 11, 2012 | 60bps |
| Above $625,000 | >90% | June 11, 2012 | |
STREAMLINE TRANSACTIONS:
Note: Streamline guidelines will be updated at a later date to reflect the June changes.
Decrease to Annual Mortgage Insurance Premium on Certain Streamline Refinance Transactions
For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012.
Decrease to Up-Front Mortgage Insurance Premium on Certain Streamline Refinance Transactions
For all SF Forward Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012.
Do The Mortgage Rule Updates Want to Make your Brain Explode? More HARP
January 16, 2012 by Karen Deis · 1 Comment
If This Just Doesn’t Want to Make Your Brain Explode…
Can you guess how many rule updates affected JUST the
origination side of the business from January 1st to December 31st,
2011?
Just guess!
Ok, I’ll tell you—it’s 259, or an average of 21 rule updates per month. To get it down to the ridiculous, that’s 1
rule update for EVERY working day of the year.
Now, about the elephant in the room—HARP, or Home Affordable
Refinance Program. Fannie held a conference call and what’s clear to us is that
there are MORE questions than answers these days.
In fact, Fannie published an updated
FAQ for HARP and their DU Refi & DU Refi Plus loans. Here are the new questions and answers
published as of December 20, 2011. We
chose only the ones that affect loan officers and the processing of the loan.
Q. 23. (New) Does standard Selling
Guide policy related to the 4506-T apply to Refi Plus and DU Refi Plus
transactions?
Standard Selling Guide policy related to the 4506-T applies to Refi Plus loans if the
payment is increasing more than 20% and to all DU Refi Plus loans since
borrower income must be verified for qualification purposes. It is not
applicable to Refi Plus loans when the payment is not increasing more than 20%
since verification of borrower income is not required.
Q 26. (Updated) Why was the “reasonable ability to repay”
representation and warranty removed?
The “Reasonable Ability
to Repay” terminology has been removed from the DU Refi Plus and Refi Plus
Underwriting Requirements sections of the Guide because these sections already
describe the specific underwriting requirements that are applicable to each
transaction.
Under Refi Plus (manual underwriting) eligibility is based primarily on the payment history of the
existing mortgage and the borrower benefit provisions. Additionally, effective
with applications dated December 1, 2011, if a borrower’s payment increases
more than 20% then the borrower will have to be re-qualified. Under DU Refi
Plus, DU applies the standards for ensuring the borrower has a reasonable
ability to repay. For these reasons the lender is not responsible for meeting
additional “reasonable ability to repay” standards.
Q 59. (Updated) Even if no new
project review is required for a Refi Plus (manual underwriting) loan secured
by a condominium or cooperative, must the lender still confirm adequate
insurance coverage for the project or unit?
No confirmation of
insurance coverage is required for Refi Plus (manual underwriting). The
lender’s original project review would have included confirmation of the
required insurance coverage, and there are existing processes required by the
Servicing Guide to monitor and ensure such insurance coverage remains in force
Q 83. (Updated) If a loan is
originally submitted to DU, can it be converted to manual Refi Plus?
Yes. Loan casefiles
originally submitted to DU may be converted to a Refi Plus (manual) transaction
for any reason and without regard to the DU recommendation. In all cases, if
the lender is converting a loan from a DU Refi Plus to a Refi Plus (manual
underwriting) transaction, the lender must be the current servicer of the loan
and the loan must comply with all Refi Plus (manual underwriting) requirements.
Q 84. (Updated) For a loan to
be eligible for DU Refi Plus, the borrower(s) and subject property address on
the loan casefile must match an existing eligible Fannie Mae loan. Are there
any existing Fannie Mae loans that are not eligible to be refinanced using DU
Refi Plus?
Certain existing loans will not be identified by DU as eligible for DU Refi Plus. They
include, but are not limited to: loans purchased by Fannie Mae on or after June
1, 2009; loans currently subject to any outstanding repurchase request (see Q82
for related information); some loans that were subject to some form of
secondary-market credit enhancement (see Q56); and government mortgages.
Although these loans may not be eligible to be refinanced using DU Refi Plus, they may be eligible
for other Fannie Mae refinance options.
The last time we checked, there were about 30 questions, and now we are up to 100 even. The 5 listed are the new and updated ones that affect loan
originators and processors. We expect a bunch more as the program gets rolled out to everyone in March, 2012. We will keep you updated on the new questions
as they are updated.
Home Affordable Refinance
FAQ’s 12-20-11
https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf
More rule updates can be
found www.MortgageCurrentcy.com where you can give it a test drive for just $1