John Le Francois NMLS #333903

www.lasvegasmtg.com report: FHA Loan Limits will be drastically cut back for Clark County, Nevada (Las Vegas, Henderson, North Las Vegas, Boulder City) starting October 1, 2011. Currently FHA loan limits for Clark County, Nevada is $400,000.00, but this will be reduced to $271,050.00, a reduction of $128,950.00!

In previous changes with FHA Mortgage Insurance or loan limits the rule has been if the property was assigned a FHA case number prior to the FHA rule change date then it would fall under the old guidelines.

What does this all mean? Qualified home buyers that are seeking a FHA loan to purchase a home over the $271,050.00 loan limit set for October 1, 2011 will need to enter under contract and have the FHA Case Number assigned to the property prior to the change date.

Many currently qualified FHA home buyers that are wanting to purchase higher priced home after October 1, 2011 will be required to have 20% down or a 720 or higher credit score for PMI to be able to have less down payment because FHA will not be available for there home loan option.

Currently FHA 30 year rates are a .5% better pricing then a conventional 30 year loans due all of the pricing hits that Conventional loans have. Read my blog regarding "The untold Truth about Par Rate" to see all of the factors that drives conventional loan rates up.

If you are a potential buyer in this market price range time is running out for you to use the FHA loan option. What would you want to do? Only need 3.5% down or have to pay 20% down and have higher interest rates? Call Me Now at 702-271-2659 to see what your options are now and what they will be after October 1, 2011.

www.lasvegasmtg.com Report: Republicans target increasing FHA Down Payment Part 2

by John Le Francois

www.lasvegasmtg.com Report: Republicans target increasing FHA Down Payment was the main discussion held yesterday in the Republican led House Financial Services Committee. The Draft Legislation "FHA Rural Regulatory Improvement Act of 2011" Chairman Spencer Bachus (R) "This hearing is necessary to insure that government home loan programs do not expose taxpayers to significant losses."

In a previous article "Republican Politicians want FHA to Increase Down Payment" I wrote prior to the House Financial Service Committee hearing briefly outlined the increase from 3.5% to 5% for a FHA down Payment. It appears from testimony from the hearing there would a more restrictions being imposed with the new legislation if the proposal gets out of the Committee.

Micheal Berman Chairman of the Mortgage Banker Association and Ron Phillips President of National Realtors Association are strongly opposed to any increases in the required FHA down payment. Both Micheal Berman and Ron Phillips sited statistics that FHA default are considerably less then conventional loan defaults. What is more important then the amount of down payment is having strong underwriting requirements, which FHA does have.

The Cato Institute a Conservative Think Tank, disagrees and has provided a list of proposed changes that the House Financial Service Committee has eagerly endorsed.

• Immediately increase to 5% Cash Down Payments on the part of the borrower.
• Require FHA to only allow reasonable debt to income levels. (What that is has not been determined at time of this writing.)
• Restrict borrowers eligibility to a credit history above a 600 FICO score.
• Require pre purchase counseling for borrowers with FICO scores between 600 to 680.
• Require a 10% down for all borrowers with a credit scores lower then 680.
• Require income limits on borrowers eligibility to FHA loans to not exceed 115% of the Median Income for the Area.

Are these proposal going to make FHA immune to defaults? No! Will requiring 10% down for borrowers with a a credit score less the 680 protect the FHA loan Program? No! Will not allowing a borrowers ability to use a FHA loan program based on Income exceeding the median income limit strengthen the FHA loan program? No!

The good news is you would be more likely to put the fires of hell out with a squirt gun then this bill ever passing the Senate!

www.lasvegasmtg.com Report: Republican Politician want FHA To Increase Down Payment

by John Le Francois

www.lasvegasmtg.com Report: Republican Politicians want FHA To Increase Down Payment from the current 3.5% to 5% and are proposing this through discussion on Wednesday Housing Financial Services Committee hearing led by Judy Biggert (R-Ill.) Last year Congress tried to increase the FHA Down Payment required, but it was removed from the bill when the President Obama threatened to veto the bill if left in.

The Republican led proposed increase to the down payment is based on the argument that FHA would not be in jeopardy of Government assistance if the borrower were required to have more skin in the game with a higher down payment. FHA has had two increases in the Upfront Mortgage Premium and the annual premium in the last year to increase the required reserves that Congress has mandated to cover mortgage defaults.

Last year Congress mandated these changes to UFMIP and MIP to secure solvency of FHA without government assistance. Borrowers with FICO score less the 580 would need to put 10% down before they could get a FHA approval.

Most of the FHA defaults were the result from the Down Payment Assistance program that was approved by Congress back in 2000 and was eliminated in 2008 when it became apparent that over 60% of these types of loans were in default in the first two years. Current FHA defaults are the results of high unemployment across the nation and would be the same regardless of the percentage of down payment required.

What is a fact is that current statistics show that Fannie Mae and Freddie Mac have an average default rate of 17% while FHA defaults are at 6.2% and VA that does not require any down payment is less then 2% in defaults.

Given VA has the lowest default rates of any mortgage loan program and does not require a down payment then logic would show that down payment is not the only determining factor for defaults.

What we do know is that the increase in down payment from 3.5% to 5% for a FHA loan would eliminate first time home buyers of at least 300,000 in the first year alone.

We know that this proposal would never come to the floor as a bill without bipartisan approval, but with banks feeling the pressure with 40% of all loans being underwritten with FHA loans, do not be surprised the banking lobby can get that bipartisan support needed to get the bill to the floor of Congress.

www.lasvegasmtg.com Report: $400 Billion Adjustable Rate Mortgages to reset.

by John Le Francois

Linda Sterns a Journalist for Rueters this weekend reported that $400 Billion, that's Right $400 Billion in Adjustable rate Mortgages will be starting to reset. In 2006 at the height of home purchases the adjustable rate mortgage was the loan of choice and the most widely used ARMS were the two, three and five year ARM. In the last five years since the housing bubble started we have seen over 5 million homes foreclosed on across the United States. The next round may start when the five year ARMS start to adjust.

In the next 13 months we will see over $20 Billion in loans adjust every month. While some of these resets would be a positive for the borrower seeing an average of $300 to $500 per month decrease at current rates some will not due to the specific ARM they hold. Borrowers that had 5 Year ARMS that were Interest Only payments will se an increase in their mortgage payment.

With 1 in 25 homes are under water across the nation and in Las Vegas that number is down to 1 out of 2 homes are upside down there is little chance of converting to fixed rate at the current low interest rates. Could we see a next wave of foreclosures with the adjustment of the 5 year ARM? Could we see more strategic defaults coming due to the ARMS resets? Only time will tell.

www.lasvegasmtg.com Report: Scam to Defraud Las Vegas Home Buyers

By John Le Francois

www.lasvegasmtg.com Report: Scam to Defraud Las Vegas Home Buyers with an ominous letter they receive in the mail that looks and reads like a government letter from the recording office. It includes a payment coupon for $87.00 and states if you do not return within the required date (see the calender on the letter) there will be additional charge of $35.00 will be required before processing.

What do you get for the $87.00? You get a copy of the recorded Grant Deed that was recorded on your current property you purchased and a property profile.

At the end of the letter it discloses that Record Retrieval is not affiliated with the county, state or with any government agency and the offer is not being made for an agency of the government. In even smaller print it states you can obtain the Grant Deed from your county recorders where your property is located in for up to $87.00. What they don't state is you can go online and search by name, address or APN and print your own Grant Deed for FREE!

Please note that the bottom of the footer states that Record Retrieval operates in accordance to both Business and Profession Code 17533.6 & Civil Code 1716. In reality it does not comply to the letter of the law and I have provided the link to that specific California Business Law and Civil Code. The only reason they include this is to give validity to the solicitation of the letter. The Record Retrieval return mailing adress is located in Reno and is a UPS Store and the original letter shows a bulk presort stamp from Corona, Ca. Please inform your buyers that there is no reason to pay the $87.00 for this service from Record Retrieval.