FHA has issued ML08-36 (http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ ) That sets the Mortgage Limits for 2009. The Mortgage Limits are a little less than the Temporary Increase that was made to FHA Loan Limits. Below is a chart of the new limits that take effect January 1, 2009.

2009 FHA LOAN LIMITS
Check for Current Limits

The Base FHA Loan Limits Effective 1-1-2009
One-family	Two-family	Three-family	Four-family
$271,050.00	$347,000.00	$419,400.00	$521,250.00
Higher Limits in the Counties Below

County Name	MSA Name	One-Family	Two-Family	Three-Family	Four-Family
DELAWARE	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
FAIRFIELD	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100

FRANKLIN	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
LICKING	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
MADISON	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
MORROW	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
PICKAWAY	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
UNION	COLUMBUS, OH (MSA)	$310,500	$397,500	$480,450	$597,100
All Other	All Other Counties	$271,050	$347,000	$419,400	$521,250

PLEASE NOTE: This notice is accurate as of the date of printing, however, we reserve the right to make subsequent changes at any time with regard to any matter covered in this notice as a result of a change in policy, law regulation or otherwise.

Because FHA is one of the most popular programs today for buyers with less than 10% down this change may affect some of the borrowers you are working with.

These new limits will also apply to Ohio 203K Loans and Ohio Reverse Mortgages.

Below are links to two Mortgagee Letters regarding HECM Reverse Mortgages that were just issued. Click on the links to view the entire Mortgagee Letter or call your local Reverse Mortgage Lender.

08-35

HECM Mortgage Limits The Housing and Economic Recovery Act of 2008 (HERA) established a national mortgage limit for all Home Equity Conversion Mortgages (HECM), insured under Section 255 of the National Housing Act, to be set in conformance with section 305(a)(2) of the Federal Housing Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)). Effective for all HECMs insured on or after the date of this Mortgagee Letter, the national mortgage limit is $417,000.

08-34

HECM Origination Fee The Housing and Economic Recovery Act of 2008 established new limits on the loan origination fee that may be charged for a Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM). Therefore, for all HECMs where the FHA case number is assigned on or after the date of this mortgagee letter, the loan origination fee limit will be the greater of $2,500 or two percent of the maximum claim amount of the mortgage, up to a maximum claim amount (MCA) of $200,000, plus one percent of any portion of the maximum claim amount that is greater than $200,000. Lenders may accept a lower origination fee when appropriate. The total amount of the loan origination fee may not exceed $6,000.

Download Quick Reference
TriFold Reverse Mortgage Brochure

The following is a short description of HECM Reverse Mortgages.

What is a HECM Plan? A HECM Plan is a special type of Plan that enables Seniors to tap into the equity in their home and receive cash, a tax-free monthly income, and/or a line of credit, or combinations of these. There are no income, asset or credit qualifications and there are no monthly payments to make. The Plan is not repaid until the Seniors permanently leave their home. Reverse Mortgage of America's HECM Plans are backed by the U.S. Government (HUD/FHA) and Seattle Mortgage a 62 year old major financial institution. How Do I Qualify? A HECM Plan is easy to obtain, provided that: (1) The Seniors (and/or their spouse) one of them is at least 62 years of age or older. (2) they occupy the home as their primary residence, and (3) they have equity in their home (proceeds of the reverse mortgage can be used to pay off existing liens or mortgages.) What Can I Do With the Money? The Senior can use the money (and are entitled to) from their HECM Plan in any way they choose. For instance: Supplement their income Home improvements Pay off a current mortgage Medical expenses Pay off debt Buy a new car Travel College tuition or gifts to family or even stop a foreclosure. The possibilities are endless. And, the funds are all tax-free. How Much Money Can I Receive? The amount of money you receive from a HECM Plan is determined by the home value, the number and age of the homeowner(s) and the current interest rate from HUD. A representative from Reverse Mortgage of America will assist in evaluating their options and calculating the maximum amount of money that will be available to them.

How Do I Receive My Money? With a HECM Plan, the Senior has five (5) payment options to choose from: (1) Tenure Option or Lifetime Payment - Receive equal monthly payments for as long asthey occupy their home as their primary residence (2) Line of Credit - Draw cash from their HECM Plan whenever and in whatever amount their choose up to the available limit. Interest is only charged on the funds drawn from the line of credit. (3) Lump Sum Cash Advance - They can receive all of their money in a lump sum upon the closing of the HECM Plan. (4) Modified Tenure - Set aside a portion of the loan proceeds as a line of credit in addition to monthly payments. (5) Term - Receive equal monthly payments for a fixed period of time they select. For instance - five (5) or ten (10) years.

Download Quick Reference
TriFold Reverse Mortgage Brochure

UPDATE 11/18/2008 - In my Personal Opinion this program is more talk than benefit to consumers. A number of other programs have been announced that seem more likely to succeed. Your first step should be is to contact your current lender(s) to see what programs they are participating under.

I welcome anyone reading this blog entry to post any information that they have found with respect to any particular lender programs that you find available.

FHA/HUD has released information on the Hope for Homeowners (MORTGAGEE LETTER 2008 - 29)
Below you will find the Eligibility Requirements for the Borrower to qualify for the program.

If borrowers are eligible they will need their current lender to agree to accept the proceeds of the H4H as full payment on their loan. There is also a provision for Sharing the Equity and Equity Appreciation.

Because of the details of the program it is best that any homeowners speak with a lender that participates in the program.

Borrower Eligibility

Borrowers who are current or delinquent on their mortgage at the time of the refinance are eligible for this Program, if they:

Have not intentionally defaulted on their mortgage or any other debt (Intentionally defaulted means the borrower had available funds that could pay the mortgage and other debts without hardship. Debts subject to a documented bona fide dispute may be excluded.) AND

Have made a minimum of six (6) full payments during the life of the existing senior mortgage (full payment is defined as what was acceptable to the lender for meeting the monthly payment obligation under the terms and conditions of the mortgage).

Borrowers must reside in the property securing the loan being refinanced, and may not have an ownership interest in other residential real estate, including second homes and/or rental properties.

Borrowers cannot have been convicted of fraud under state and Federal laws in the last 10 years.

Similar to its validation tool for social security numbers, FHA will use an automated tool at the time of case number assignment that will check the borrower's name against several databases for convictions of fraud and an ownership interest in other residential properties. In the event that the lender receives a warning at case number assignment and believes it is in error, it must provide evidence to the appropriate Homeownership Center documenting that the borrower has not been convicted of fraud or does not have an ownership interest in other residential properties. Once the Homeownership Center evaluates the documentation, it will determine whether to lift the warning.

Borrowers must certify that they did not knowingly or willfully provide material false information to obtain the existing mortgages being refinanced under the H4H Program.

As of March 1, 2008, the borrower's aggregate total monthly mortgage payment debt-to-income ratio (DTI) on all existing mortgages must be greater than 31 percent of the borrower's gross monthly income. The total monthly mortgage payment is defined as the fully-indexed and fully-amortized Principal, Interest, Taxes and Insurance (PITI) payment (this includes principal and interest, taxes and insurances, homeowners' association fees, ground rents, special assessments and all subordinate liens).

FHA recognizes that reconstructing the borrower's prior total monthly mortgage payment DTI as of March 1, 2008 may be difficult, especially as the H4H Program nears its sunset date. To comply with this eligibility requirement, lenders must obtain:

From the borrower, evidence that the prior mortgage DTI was more than 31 percent on March 1, 2008, such as pay stubs for March 2008, or a signed and dated copy of the individual 2008 Federal tax return, when available, to determine gross monthly income for that month (earnings divided by 12), or W-2s, financial records, or verification of employment from the borrower's employer.

Lenders may also rely on the borrower's signed and dated 2007 Federal tax return if the lender has no reason to believe that the borrower's income in March 2008 was materially different than the income reported on the 2007 Federal tax return.

To determine March 2008 income for self-employed borrowers, obtain a copy of the quarterly tax return that contains income stream information for March 2008 or a signed and dated Profit and Loss Statement and balance sheet that contains income stream information for March 2008 or a signed and dated copy of the individual 2008 Federal tax return, when available, (earnings divided by 12).

From the servicer of the mortgage, the borrower's total monthly mortgage payment due for March 2008, including any amounts due on subordinate liens.

For mortgages without escrow accounts, the lender should obtain tax and insurance information from the borrower. If the borrower does not provide insurance information, then the servicer of the mortgage should estimate the monthly cost of hazard insurance (and flood insurance, if applicable) based on the property's location and the rates in effect for 2008. If the borrower does not provide real estate tax information, the lender should obtain it from public records.

In Ohio please consider visiting
www.AllOhioMortgage.com

Suzi Orman is working with the FDIC to inform consumers about the FDIC insurance. If you go to this site ( http://www.myfdicinsurance.gov/ ) you can watch a Public Service announcement from her.

There is also a link to a calculator on the FDIC Website that allows you to review your accounts to determine if your deposits are insured. Suzi Orman is a respected Financial adviser and if you are concerned about your deposits and your money, please click the above link and watch the Public Service announcement and then go to the calculator.

Please consider including this information on your Blog. You can rewrite this information if you desire or with ActiveRain you can ReBlog this post.

Warning FHA Buyers

Interest Rates are Great Today

and

Effective 10/1/08 it will cost you more

 to purchase a home because of the changes in FHA Mortgage Insurance.

On a $150,000 FHA Loan

All buyers will pay a
 $375.00 higher upfront premium.

Buyers with 5% or Less down will also
pay $6.25 more per month. 

When President Bush suspended the implementation of FHA's Tiered Pricing everyone was glad that he placed a One year Moratorium on the Higher MIP Premiums.   Until Mortgage Letter 2008-22 everyone was happy.   With the issuance of the Mortgage Letter the opposite is true.   Instead of coming out with Tiered Pricing, FHA increased the MIP across the board to everyone.  

If you are considering a purchase, doing it before Oct 1, 2008
will save you $$$$$$$

Realtors refer to ML 2008-22

Ask your Realtor for more Information

Note to Ohio Buyers:  3% or 4% Down Payments assistance will continue to be available if you use the Ohio First Time Buyers Program.