Here it is - straight from the horse's mouth. This post is courtesy of David H Stevens, Secretary of the United States Dept. of HUD. This office oversees the FHA programs for Single & Multi-Family housing; HUD's Healthcare programs (insurance for hospitals & nursing homes); manages regulatory policy for RESPA, Manufactured Housing, & SAFE. [Re-blogged with permission, January 21, 2010.]
Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area, including midtown Tulsa, downtown Tulsa, Broken Arrow, Owasso, Bixby, Sand Spring and Jenks, Oklahoma. Please visit Lori's web site, LoriCain.com or call 918-852-5036.
Today I will be announcing a series of changes to FHA that will affect some of you. As you read about them, please note a few key points.
FHA fell below is legislated requirement to have 2% in excess capital for reserves above and beyond forcasted losses. Being below this 2% requires me, by law, to make changes to get the funds reserves back over 2%. Virtually all of the losses are from 2006, 2007, and 2008 book years. These are the worst years in the housing crisis from an origination standpoint and they contained programs like the SFDPA (seller funded downpayment assistance) that have extremely high default rates.
The changes announced today will get the reserves up and put in place some controls to protect the fund and FHA for the long term, while making sure not to overly, adversely, impact this housing market at a critical time.
You can read about these in any major newpaper today or perhaps tomorrow, but please understand that these are necessary to keep FHA functioning. Without some tightening, we would be under extreme scrutiny and the lack of fiscal soundness could threaten FHA for the long term.
The housing market is slowly coming back to life in many markets across the country. Let's keep working at making this american dream of homeownership be part of a safe and responsible system for the long term.
Thanks for listening and for being a professional in this industry - it's why I post here in active rain - this place is filled with real pros.
Have a geat day.
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Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area and specializing in downtown Tulsa and midtown Tulsa real estate.
Thank you for the heads up and I will follow up by reading it in the newspaper tomorrow.
It is hard to believe that our credit system is so recked that we have these challenges.
Hi Lori,
Thank you for sharing an informative and helpful post.
John Pusa
This sounds like the calm before the storm. Thanks for the heads up Lori.
Mr. Steven's post was featured - go to his original if you want to re-blog. At least they didn't raise the minimum down-payment as feared.
Lori, Thanks for sharing that information. I would have never found it!
Jane - THANK YOU for sharing your listing info via JP - I would never have found that!!! :-) You are a jewel!