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LendingTree facilitating FHA-backed loans
Borrowers who are interested in Federal Housing Administration loan guarantee programs can now check their eligibility and request four loan offers from qualified FHA lenders using the LendingTree Network. LendingTree has expanded its filters to allow borrowers looking for refinance or purchase loans to check their eligibility for FHA loan programs based on county-level loan limits and loan-to-value ratios.

The Department of Housing and Urban Development maintains a Web page that allows visitors to determine FHA mortgage limits for their area, or several areas, and list them by state, county or Metropolitan Statistical Area. The FHA home page also offers a search tool to find FHA lenders in your area, and tools for determining the maximum mortgage you can afford and comparing the cost of renting versus buying.

Mortgage repurchasers Fannie Mae and Freddie Mac usually require some form of mortgage insurance when buyers put down less than 20 percent of a home’s purchase price, and FHA loan guarantee programs often have lower down-payment requirements than those offered by private mortgage insurers. The temporary $729,750 upper limit for FHA-guaranteed loans in high-cost areas will expire at the end of the year, and is expected to be superseded by legislation approved by Congress last week (see story). The legislation will allow FHA to guarantee loans of up to 115 percent of the area median home price, to a maximum $625,000. Minimum down-payment requirements are being increased to 3.5 percent, and FHA will no longer accept seller-funded down-payment assistance after Oct. 1.

S&P: Home prices fall record 15.8% in May
Standard & Poor’s today reported that a home-price index for 20 metro areas fell a record 15.8 percent in May compard to May 2007, with a year-over-year index drop of 28.4 percent in Las Vegas, 28.3 percent in Miami and 26.5 percent in Phoenix. All of the 20 metro areas tracked in the monthly index had year-over-year declines — the slightest declines were in Charlotte, down 0.2 percent; Dallas, down 3.1 percent; and Denver, down 4.8 percent.

Prime, fixed-rate loans made a comeback in 2007
First-time home buyers accounted for a slightly smaller percentage of purchase loans in the second half of 2007 than in the first half, even as FHA and VA loan guarantee programs picked up market share replacing subprime and other nontraditional loans, the Mortgage Bankers Association said. First-time homeowners represented 30.2 percent of purchase loans in the last six months of the year, down from 32.6 percent from January through June. During the same period, FHA- and VA-backed loans rose from 3.8 percent of originations to 5.7 percent.

Demand for fixed-rate mortgages also rose, accounting for 63.6 percent of loans in the second half of 2007, compared with 53.4 percent in the first half of the year. The credit crunch began in earnest in August, as secondary market investors stopped buying most mortgage-backed securities not backed by Fannie Mae and Freddie Mac. Prime loans accounted for 79 percent of all mortgages originated in the second half of the year, compared with 70 percent in the first six months of 2007, the MBA said in a press release summarizing the results of its Mortgage Originations Survey.

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