Archive for October, 2007

SSN Verification Changes for FHA

Thursday, October 11th, 2007

Admittedly, this is a tad boring – but still important. (Like diplomacy, some might say.) FHA has made changes to its Social Security Number verification system that will extend the process a bit. Instead of instant approval, the process will require an overnight check – but with high application numbers that may be longer. There are details in a release from the Mortgage Bankers Association.

The Spirit of Giving

Tuesday, October 2nd, 2007

So Nehemiah and AmeriDream are suing HUD for banning DPA (down payment assistance). Let’s reivew what happens with DPA “gifts”:

The program works this way: Once contacted by a lender, Nehemiah sends a gift covering the homebuyer’s down payment. Average gift: $4,000. The seller of the home then reimburses Nehemiah, plus a fee.

HUD’s complaint is that often the sellers, despite being discouraged by Nehemiah, add those costs to the sale price. The agency says this leads to greater financial strain on the homebuyer, and more defaults for HUD, whose Federal Housing Administration insures the mortgages. “Loans made to borrowers who rely on these types of seller-funded assistance perform very poorly,” the agency said in its final decision banning the program.

If Nehemiah and AmeriDream are as devoted to consumers as they say they are, maybe they could use their corporations to help people in ways that don’t involve jacking up housing prices.