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Competitors shoot holes in FHA coverage

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Mortgage Professional America | 28 Aug 2015, 06:30 AM Agree 0
Federal Housing Administration (FHA) mortgages have made home ownership possible for tens of thousands across the country, but private market competitors are exploiting one weakness that could benefit clients
  • Keith | | 28 Aug 2015, 10:06 AM Agree 0
    Freddie and Fannie require 7 years after a foreclosure! So the banks get bailed out by the people but the people get screwed again...
  • John | | 28 Aug 2015, 03:11 PM Agree 0
    FHA insures 100% of the mortgage. PMI only insures the top 25%, so it would make sense that PMI would be dropped at 78% mortgage to value. If anything, it was foolish in the past for FHA to drop the MI payments when they would continue to be liable for claims. Frankly, it seems like a lot of hype to me anyway, because nobody keeps a mortgage - especially an FHA mortgage - for 30 years anyway. And before anyone tells me that there is more likelihood today since rates are at an all time low and expected to go up, let me say that FHA mortgages are also assumable. That is much more of a benefit than the insurance is a detriment. 7 or so years form now when you are looking to sell that house and move up, you still have that 3.50% on your FHA mortgage. Even if you do have a .85% MI payment to go with it you'd be at 4.35% total when rates could be 6.50%. Tell me that's not an incentive for a buyer.
  • Pat | | 01 Sep 2015, 09:01 AM Agree 0
    So true John. Typical article where someone spews all the negatives, but omit the benefits. Fact is, when rates rise (and they always do), sellers with FHA mortgages will be in high demand since their mortgages are assumable. This happened many many years ago when rates were much higher. But next time, it will be a mad house with FHA sellers having rates at 3 percent plus. What a sellers market they will have. As for realtors who love to beat up on FHA, they SHOULD be touting the benefits of having FHA when rates rise - if they could think that far in front of their wallet..
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