If you own a home, have credit scores over 530 FICO, have missed mortgage payments, but are current as of now, and your home is worth more than $ 271,000 to $ 650,000, we may now be able to refinance you into an FHA mortgage. CALL IMMEDIATELY AT 631-944-6910 FOR INFO.

The Senate & House last night passed the stimulus package that includes higher mortgage limits for both FHA and the GSEs (Fanny Mae, Freddie Mack). The original stimulus proposals only involved tax issues. Because of the importance of this legislation, the bill could be signed by the President as early as today.

Below are the key provisions of the bill with respect to the mortgages.

First, it is a temporary increase that expires on December 31, 2008. I will discuss the FHA and GSE changes separately below.

I. FHA
The mortgage limit provisions includes four temporary changes for the FHA program. (As a reminder, the FHA modernization bill includes higher mortgage limits. It is possible that legislation could make this provision permanent or limit the FHA maximum limit to $417,000 as the Senate bill does.)

* Raises the base loan limit ("floor") to 65% of the current GSE limit ($417,000) = $271,050

This provision is effective the day the President signs the bill.

* Raises the maximum FHA loan limit from $362,750 to $729,750 (175%
of the GSE base limit - $417,000)

o Secretary has the discretion to raise the maximum loan limit by $100,000 in an area at the $729,750 limit for any size residence (including 2-4
family units).

Only "high cost areas in California and Hawaii (Honolulu) are likely to increase to the $729,750 maximum. Washington D.C., for example, will
increase to about $600,000 based on our analysis of available data. While we developed these limits
following the FHA mortgage limit methodology, they are subject to possible change.

* Increases the calculation factor from 95% to 125% of area median sales price for determining "high cost" areas. We have an updated list of affected areas.

* Implements Fannie Mae/Freddie Mac ratios for calculating maximum loan amounts for two-, three- and four-family units in all of the above
categories Fannie Mae and Freddie Mac two-,three- and four family unit properties increase the same ercentage that the single family limit increases. In
2006. the GSE single family limit increased 15.95% and the mortgage limits for multiple units increased 15.95%.

This change should result in a significant increase in FHA limits for multi-unit properties. In the past, FHA used fixed percentages of the
single family limit (i.e. 107% of single family for two family unit, 130% for three-family unit and 150% for four-family units). For example, under the new provision, if the single family limit increases slightly over 100% in a "high cost area" (from $362,790 to $729,750), we would assume the multiple unit amounts would increase the same percentage slightly over 100%).

Fannie Mae & Freddie Mac:

The bill raises the GSE maximum loan limit to $729,750. The bill states that the GSE limits should follow the HUD mortgage limit calculation process and therefore the GSEs and FHA will have the same limits in areas that exceed $417,000. Fannie Mae and Freddie Mac's current limit will, in effect, become their "floor" ($417,000). As the attached chart demonstrates, there are a number of markets that will benefit from this change to the GSE mortgage limits though not as many as NAR advocated.
NAR will continue to advocate for broader expansion of the loan limits.

Since this is a new process for the GSEs, I would recommend waiting until the maximum limits are announced for Fannie Mae and Freddie Mac.

While I believe that these levels are accurate since we used HUD data sources, they are subject to possible change. To sum this up, if you own a home that has a value that was over the mortgage limits for your county, those limits will now increase to much higher levels. Many people could not refinance their homes because they were late on mortgage, scores were under 530, and values were to high. Now, if you have these first two situations, the third one has changed. A home in NY for example should be able to refi if its at $ 600K! While these numbers have not yet been given to us, we are calculating them based on the current ratios being used by HUD. This is significant. If you need help now, this is the time to call me. We are one of the largest FHA lenders in the country, and have been directly underwriting these loans for many years.

Give me a call.

Anthony
631-944-6910 or 917-331-9686

The New FHA Secure Refinance Program

On August 31, 2007, President Bush proposed the new FHA Secure Refinance Program. This program is designed to help homeowners into fixed rate mortgages through the FHA to reduce their monthly mortgage payments and to eliminate the chance that their mortgage payments will increase in the future.

In recent years, many borrowers have been put into adjustable rate mortgages (ARM's), deferred interest mortgages (called "Option ARM's"), and subprime mortgages with the promise that initial mortgage payments would be low. Unfortunately, many of those mortgages are now adjusting into much higher monthly payments, making it difficult for homeowners to make ends meet. This is why the president is acting now in order to assist homeowners.

"Owning a home has always been at the center of the American Dream. Together with the United States Congress I will continue working to help make that dream a reality for more of our citizens." President George W. Bush, August 31, 2007.

If you are in one of these mortgages, the FHA may be able to help you.

Apply Now and you will be able to learn if you qualify to refinance your adjustable rate mortgage into a fixed FHA mortgage with no out of pocket closing costs. This means that with the help of FHA, you may be able to refinance your home into a lower monthly payment and be assured that your monthly principle and interest payments will never increase.

With the number of homeowners in these ARM's, it is important for you to act quickly, so please, Apply Now so that our FHA Mortgage Specialists can help you, today.

CALL ME AT 631-944-6910 OR 917-331-9686

Thanks
Anthony Fontana
Senior Mortgage Advisor

In this difficult economy where stock valuations are questionable, one of the best investments is real estate. But for many potential buyers, a down payment keeps them from considering this purchase. This should not be the case. It is possible to buy a home with nothing down-meaning no down payment.

USING THE FHA TO PURCHASE A HOME WITH NOTHING DOWN

Through a unique partnership with the Nehemiah Corporation, I am able to arrange for a gift of up to $ 15,700 to be used as the downpayment required under FHA loan guidelines. This is a true gift. The FHA requires 2.25% downpayment on a purchase. There are various methods that are used to achieve the goal of little or nothing down. Call me at 631-944-6910 and I'll be happy to explain it to you in detail.

These programs are open to all homebuyers. There are no income limits and the home purchasers do not have to be a first-time homebuyers.

Homes that are eligible can be located anywhere in the United States. It can be used on any owner-occupied, primary residence including: homes, condos, town homes and manufactured homes. Although it cannot be used for investment or rental properties, duplexes and four-plexes are eligible if the purchaser will reside in one of the units.

The homes need not be pre-owned to qualify for the program. Newly constructed homes are also included in the program.

The gift funds can be used on any FHA loan for the down payment. FHA loans are not based on need. The purchaser MUST qualify for the FHA loan, and that is going to be a formula related to income and debt load.

FHA loans are available to most borrowers and are primarily restricted by the loan amounts. FHA loan maximum amounts vary from state-to-state but are generally higher than the median price of a home in their areas. Each year the FHA maximum allowable loan amounts increase, so it is best to check with me on the current amounts available.

The only restriction on the down payment gift funds is that they may not be used to pay off any kind of debt or judgment. They must be used for the down payment of a home.

Sellers of homes using the gift down payments fund the program. In exchange for finding a purchaser for their home at their full asking price, they contribute a portion of the proceeds from the home to a "pool" of funds that is used to provide gift down payments for others purchasers. And because all homes must meet FHA or HUD appraisal guidelines, homes are never overp

One major consequence of the sub-prime mortgage implosion is the difficulty many consumers with limited or impaired credit will have in obtaining mortgages.

But if suddenly tougher lending standards result in slamming doors at banks and mortgage companies, the venerable Federal Housing Administration loan might look much more inviting.

The long-established FHA loan has always been designed to help the first-time buyer purchase a home of their own. However, it fell out of favor in recent years as its natural constituency was attracted to the exotic mortgages offered by sub-prime lenders.

As a result, many consumers ended up with loans -- and houses -- they really couldn?t afford.

At the urging of some in Congress, the U.S. Department of Housing and Urban Development is looking at modernizing the FHA loan to give consumers, who in the past would have obtained sub-prime mortgages, a better alternative.

Assistant Secretary for Housing Brian Montgomery urged a Senate Appropriations Subcommittee last week to pass legislation that enhances the FHA's government-insured mortgage products and "provides lower-income families safe, secure homeownership opportunities."

"Many first-time and minority homebuyers face significant challenges when trying to purchase a home. In recent years, such difficulties have resulted in many of these individuals assuming risky, adjustable-rate, sub-prime loans. The impact on African American and Latino borrowers has been particularly profound," Montgomery said.

According to 2004 HMDA (Home Mortgage Disclosure Act) Data, 40 percent of African-Americans and 23 percent of Hispanics pay an interest rate three percent higher than the market rate. The Center for Responsible Lending reports that 51 percent of refinancing transitions in African American neighborhoods are sub-prime loans.

"There needs to be a mortgage alternative which will qualify a wide swath of borrowers and simultaneously provide them with the loan options they require. Everyone should have access to a safe, affordable mortgage product; and this should not change just because that person is a first-time homebuyer, a minority homebuyer, or a homebuyer with troubled credit history," Montgomery added.

FHA was created in 1934 to stimulate the housing market during the Depression. Over its long history it has financed more than 34 million homes. But as lending practices have evolved and modernized, critics have charged the FHA has been slow to adapt,

HUD PROPOSES MODERNIZATION OF FEDERAL HOUSING ADMINISTRATION
Legislative Proposal would increase access to FHA for potential homebuyers
WASHINGTON - In an effort to increase homeownership opportunity for many Americans, the Department of Housing and Urban Development today announced a far-reaching proposal to modernize the Federal Housing Administration (FHA) and make it an important financing option in today's housing market.

Assistant Secretary for Housing- Federal Housing Commissioner Brian D. Montgomery presented the House Subcommittee on Housing and Community Opportunity with the FHA Modernization Act, a legislative proposal that would enable FHA to reach deeper into the pool of prospective borrowers. Many of these borrowers are currently willing to pay subprime rates to become homeowners because they believe they have no other option.

"FHA was created during the Depression to stimulate the housing market at a time when homeownership simply wasn't a reality for most people," said Montgomery. "FHA has been able to help over 33 million families become homeowners since that time, but now it needs to be able to adapt to today's marketplace. A new, modern-era FHA would offer many hard-working Americans a variety of homeownership options that are safer and at a fair price."

The FHA Modernization Act would:

1) Create a new, risk-based insurance premium structure for FHA that would match the premium amount with the credit profile of the borrower . It would replace the current structure, in which there is standard premium amount for all borrowers, while still protecting the soundness of its Insurance Fund. FHA would have the flexibility to charge higher-risk borrowers a slightly higher premium, and to charge a lower premium for low-risk borrowers.

2) Eliminate the current statutory three percent minimum down payment, reducing a significant barrier to homeownership . FHA's existing down payment requirement does not meet the demands of today's marketplace, where most first-time homebuyers put down two percent or less. The "new" FHA would offer a variety of down payment options.

3) Increase and simplify FHA's loan limits . FHA's loan limit in high-cost areas would rise from 87 to 100 percent of the GSE conforming loan limit and in lower-cost areas from 48 to 65 percent of the conforming loan limit. This change is crucial in today's housing market. In many areas of the country, the existing FHA limits are lower than the cost of new construction, eliminating FHA financing as an option for buyers of new homes in those markets. FHA has simply been priced out of the market in other areas, such as California, where FHA insured only about 5,000 home mortgages in all of 2005.

The legislation would also expand the availability of the Home Equity Conversion Mortgage (HECM) program for the elderly by eliminating the cap on the number of these loans that FHA can insure. In addition, a new HECM for Home Purchase product would enable the elderly to move from the family home to housing more suitable for them as they age.

Other proposed reforms would make it easier for FHA to serve purchasers of affordable housing such as manufactured homes and condominiums. FHA would eliminate a feature of its Manufactured Housing program that limits how much a lender can recoup from mortgage defaults, providing greater incentive for lenders to make these loans. The proposal would also increase the loan limits to reflect the real cost of manufactured housing today. The legislation would also eliminate burdensome statutory provisions for insuring condominiums, which serve as one of the primary forms of affordable housing for first-time homebuyers.