t's apparent that changes in the home buying process will continue for awhile. First, we now have new RESPA (Real Estate Settlement Procedures Act) regulations which provide more thorough explanation and disclosure of key loan terms and settlement charges. The objective of these is to help every home buyer or owner make better financing decisions and avoid surprises at closing.

It is worth noting that closings may be delayed under certain, specific circumstances. For example, if the lender revises the Good Faith Estimate (GFE), which must be provided to the borrower, then the borrower must be allowed at least one business day to review it prior to closing. If the APR increases more than 1/8%, the Truth In Lending disclosure must be reissued at least 7 business days prior to closing. This allows 3 business days for mailing and provides the customer with the time necessary to determine if they are comfortable with their loan decision. Additionally, FHA has announced some updates to their policies that you should be aware of as you consider a new home purchase. They want higher-risk buyers to have more “skin in the game.” The most relevant of these are:

• Borrowers with a credit score below 580 will need at least 10% down payment. Those with credit scores above the 580 level will still qualify for 3.5% down.
• Mortgage insurance “up-front” premiums will increase from 1.75% to 2.25%. These premiums can still be financed back into the loan. Monthly mortgage insurance may also be increasing.

Also, HUD Secretary Shaun Donovan has announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days.
In today’s market, FHA research found that acquiring, rehabilitating and reselling these properties (often referred to as “flipping”) to prospective homeowners often takes less than 90 days. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods.
This temporary waiver is set to expire in February, 2011. For more information regarding the above, go to www.hud.gov or drop me an email and I’ll send you the releases from HUD.

Rick Richardson
REMAX House of Brokers
For current info on the changing real estate market, check my blog at:
http://www.rickrichardson.net/remaxmidstates/modules/agent/agent.asp?p=agentblog.asp