My New Blog

FHA has announced that it would increase its annual mortgage insurance premium (MIP) by 0.10 of a percentage point for loans less than $625,500 starting April 1 2012. So for 3.5% down payment, the new annual MIP would increase from 1.15% to 1.25% and 5% down payment, the new annual MIP would increase from 1.10% to 1.20%.

Starting in June 1, the premium for larger loans (greater than $625,500)would rise by 0.35 percentage point, bringing the total premium to 1.5%.

Simultaneously, the agency will also raise the upfront mortgage premium by 0.75 of a percentage point to 1.75% of the loan amount which can be financed into the mortgage. Full mortgagee letter can be read here.

In addition, starting April 1st 2012:

• FHA requires for self-emplyed borrowers to provide Profit and Loss and Balance Sheet if more than a calender quarter has elapsed since date of most recent calender or fiscal year-end tax return was filed. 
• Disputed accounts need to be less than $1,000 and more than 2 years old from the date of last activity. Else, file will be downgraded to manual underwriting.
• Collection account totalling more than $1,000 needs to be paid off prior to closing or entered into payment arrangements with 3 months verified payments. This include medical collections.

A full mortgagee letter can be read here.