FHA Loan Limits
San Diego real estate agent
In just two weeks, the availability of safe, affordable, reliable mortgage financing will diminish. If this happens, many home buyers run the risk of being priced out of the American Dream of home ownership. Even worse, this could hold back the housing recovery. Read more 
FHA’s 90-day Property Anti-Flipping Rule
FHA home loans
In January, the Department of Housing and Urban Development (HUD) instituted a one-year moratorium on the FHA’s 90-day anti-flipping rule. As a result, beginning Feb. 1, buyers could use FHA-insured financing to purchase properties resold through private developers and investors, providing access to a broader array of recently foreclosed properties. Under the temporary waiver all transactions must be arm’s-length, and most properties will require additional documentation of improvements and justification of the price increase. Additional documentation may include a second appraisal and a property inspection ordered by the lender. Read more
Federal Housing Administration (FHA) In Trouble
FHA home mortgage defaults
With recent reports that 20% of mortgages guaranteed by the Federal Housing Administration (FHA) in 2007 and 2008 are defaulting, it appears that the corner of the carpet that things are being swept under might have changed but that the sweeping is still going on. Proof that lessons were not learned is shown by similar default rates for the period of 2005-2006 (20%) when the bubble seemed to have gained its own inertia and was sucking mortgages in instead of having to have them pumped out.
In addition to the losses tied to the eventual defaults on the mortgages it guaranteed, the FHA is also suffering from mortgages it invested in. Write downs on $1.04BN in the value of private-label MBS, the kind not backed by any GSE, resulted in the booking of a $165MM loss on these types of securities by the FHA in 3Q09; a veritable one-two punch that will, once again, have the taxpayer being dragged from the ring.
Sorrento Valley real estate agent
FHA Home Loans in Worst Shape in 75 Year History
FHA home loans
This latest FHA loan news should come as nothing new for all our long time readers. On 12-16-08 I published a post entitled FHA Home Loans – The Next Bailout? and than on 7-2-09, I published: FHA Home Loans Headed for Trouble? Just yesterday, the FHA said its financial reserves had sunk below mandatory levels for the first time in its 75-year history. While officials insist the agency won’t require a taxpayer rescue, falling home prices, rising unemployment and shady lenders continue to drive up default rates.
California existing home sales increased 83.2% in November
Who says the laws of supply and demand do not work in today's real estate market? California home sales increased 83.2 percent in November compared with the same period a year ago, according to the latest housing report from the California Association of Realtors.
In my opinion, the main factors for this huge pick up in real estate sales are the very attractive prices combined with exceptional low 30 year fixed rate mortgages and the availibality of 3% down FHA financing.
From my estimates, the majority of these existing home sales are foreclosures or pre-forclosures. Plus, keep in mind, a pick up in sales is only the first step in forming a bottom to our real estate bust.
The other part of the California Association of Realtors report shows the median price of an existing, single-family detached home in California during November 2008 was $285,680, a 41.8 percent decrease from the revised $490,511 median for November 2007. The November 2008 median price fell 5.3 percent compared with October's revised $301,740 median price. San Diego Realtors
FHA Home Loans – The Next Bailout?
In San Diego, one major mortgage lender's new FHA loan originations went from approximately 2% to approximately 60% of new loans! The low down payment (apprx. 3%) and relative availability of FHA home loans are helping to drive hoards of borrowers to the FHA. Many new homeowners with the most risk and fewest dollars are going to the FHA for loans.
In 2007, they handled 3% of new loans. This year it's 26%. However, these additional higher-risk loans are stressing the FHA insurance system. So, now the FHA's own somewhat lax standards are coming back to create a huge hit to their loan insurance fund. It has dropped the FHA insurance fund 39% since last year, raising concerns for the FHA requiring its own bailout.
Related prior posts:
San Diego Housing Market … Hitting the Lottery (or not)
New Relief Program For Homeowners at Risk of Foreclosure
Hope For San Diego Homeowners
Real Estate – An Innovative Way of Not Filing Bankruptcy