Richard M. Borden

FHA Announces Policy Changes to Address Risk and Strengthen Finances

New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

WASHINGTON - Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA's capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation's housing market recovery.

The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.

"Striking the right balance between managing the FHA's risk, continuing to provide access to underserved communities, and supporting the nation's economic recovery is critically important," said Commissioner Stevens. "When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency's history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities."

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.govand espanol.hud.gov.

Minnesota Snowbirds going to Arizona ~ This year 2009-2010 season when the Minnesota Snowbirds come to Arizona they are in for a BIG treat. Housing prices have been nearly cut in half in some areas. We specialize in Scottsdale, Paradise Valley, & Phoenix area we have seen values plummet in the market. The bottom has hit in most price ranges and for that we are seeing a bunch of investors coming in from out of state and the country. We see most of the buyers coming in from Minnesota, Chicago, Iowa and a BIG portion coming in from Canada. Now with the new federal tax credit out we will see more action all the way through the winter months until April.

"Borden Investment Group"

Keller Williams Arizona Realty

Rick M. Borden 480-600-7578

www.BigSandyLake.com

I am pleased to announce that I have just started my new position as CEO/Team Leader for the Keller Williams Integrity First office in Mesa Arizona. I am very excited to be affiliated with this wonder group of agents and owners of this Market center. I came to Arizona looking for new opportunities this past winter and had no clue this one would show up. I am very happy that Tom Drainey the SW Regional director of Keller Williams saw the potential and talent in myself and started the ball rolling for me. I also want to thank Rick Bandimere of Keller Williams in Coon Rapids Minnesota, if it were not for him I never would have meet Tom Drainey and all of the other wonder people of Keller Williams. I look forward to a very long and rewarding carreer with this Awesome company.

Big Sandy Lake: is well known for the camaraderie all over the lake and throughout the whole McGregor area. I will say though that this event is by far the largest winter event that Big Sandy lake has. I as a Real Estate Broker have been sponsoring this event since day 1 and have had a hole on the Ice each and every year. One year we Had a big fire ring out on the ice and were giving away free silkscreen T- Shirts and the people loved it, another year we had Big Huge umbrella's outon the ice and we help Katie & Mike sell refreshments to the Golfers. This year however I will not be attending the Golf On Ice event. My family will be there. My oldest son Matthew Borden and his Girl friend Stephanie, will be out on the Ice swinging away for all it is worth. I am currently out in Scottsdale, Arizona getting my Brokers License so I am able to offer people services in both markets. I specialize in waterfront property and will be helping Baby boomers buy retirement homes in sunny Arizona. So it looks like this year is all work no play for Mr. Rick. I will be there next year out on the Ice, so see you then. If you were at Golf on Ice this year 2009 please send me your photos and stories to share. Email them to Rick@BigSandyLake.com

Here are some images from the past years. If you do not have ant plans on the first weekend of March each and every year you should call to get more information, I will provide a link to the Resort for you.

BigSandyLake.com has been a sponsor for years at Golf on Ice at Hill Crest Resort, Golfers Waite for their teams to be called. You can usually get a cold beverage inside and outside on this day, they have carts that drive around the course and sell beverages. Make sure you buy plenty of tickets because they do not have cash out on the lake.

HILLCREST

RESORT

On Minnesota's Big Sandy Lake
in Aitkin County

www.BigSandyLake.com

Hill Crest Resort ~ 218-426-3323

Big Sandy Lake ~ 6526 acres

McGregor, Minnesota 55760

Fishing for crappie, walleye, northern

Snowmobiling, 4 wheeling, cross country skiing

Boating, water activeties all yaer round.

Real Estate prices from high $190's to over $2 mil.

New Construction town homes & New Construction Log Cabins, association maintained.

Minnesota National Golf Course ~ New Construction Homes and Play and Stay Golf Packages for 2009 are on www.MinnesotaNationalGolfCourse.com

Aron and Brooke are local cabiners up on the lake their parents are good friends of ours and these young ladies will be future clients of our once they get out of college. They both had the whole crew out on the Ice and spent the day at Hill Crest Resort.

Viking Game Headquarters - 2008/2009 Season
Golf-On-Ice - March 7, 2009
Patty's Day - March 17, 2009
Fool's Feast - March ?, 2009
Easter Egg Hunt - April ?, 2009
Chili Cook-Off - 2009 watch for date
Human Bowling-On-Ice - 2009 watch for date
Testicle Festival - 2009 watch for date
Lakes Area Fishing Tournament - June ?, 2009
Big Sandy Lake.com Fishing Tournament - August ?, 2009
Viking Boat Parade - August ?, 2009

www.BiGSandyHillCrestResort.com 218-426-3323 Katie Lutz

This years event if like ant other year should be as I said earlier on e of the best days out on the Lake this Winter. Make sure you call Katie at The Hill for more information about this event and all other activities they have all year long.

Come visit McGregor Minnesota & Big Sandy lake.

Rick Borden 763-238-8668

With the changing times and the economy the way it is I have decided to learn more about the foreclosure side of the business so I am going to Arizona for some hands on training.

I am a Real Estate Broker in McGregor Minnesota and my market is 2nd homes and investment properties, I also market Minnesota National Golf Course a pristine gated community with access to Big Sandy Lake and over 10,000 acres of navigable water. www.MinnesotaNationalGolfCourse.com Minnesota National has a 309 lot development called Settlers Ridge, it is Awesome call me for Play and stay information if you would like to come play a round or 2 at the resort. The golf course has rental property on the course and it is an Awesome area for a vacation.

Market trends in Mcgregor currently are not very good the people who have been buying cabins are only spending on average around $350,000 or less on the lakes around are area. I realize that my market place is not going to keep me busy, to accomplish the goals I have set in place to currently retire when I want to. I am going to Arizona to learn more about the market they are currently in and it is a very large foreclosure market they are dealing with REO's and doing BPO's for lenders as well as Property Preservation. The loan modification business is starting to really take hold as well. I currently have a Loan Modification company assisting borrowers keep their homes, hoping to avoid foreclosure.

I will attending the Arizona School of Real Estate & Business March 6Th for the Brokers crash course it is a 9 day crash course on Arizona Principals and Practices, as well as the Federal portion I have to take all over again.

Rick Borden

www.BigSandyLake.com