International Document Services Modifies Mortgage Document Preparation Software to Accommodate FHA MI Hike

by 30 May 2012
Salt Lake City, Utah, May 31, 2012- International Document Services (IDS), a mortgage document preparation vendor, announced it has revised its flagship mortgage document preparation system, idsDoc, to reflect the Federal Housing Administration’s mortgage insurance premium increase.  The increase, one quarter of one point, will be applied to all 15-year and 30-year mortgages backed by the agency. The increase is in response to a congressional mandate that gave the FHA permission to increase premiums and keep its insurance fund liquid.  The higher premiums were also outlined in President Obama’s 2012 fiscal budget, which estimates that FHA will insure $218 billion in loans during the 2012 fiscal year. In order to accommodate for these regulation changes, IDS added a new field called “FHA Endorsement Date” on May 1, which allows lenders to select the appropriate MI rate based on the date of application. The FHA MI rate increase was initially implemented on April 9 and is scheduled to increase again on June 11.  Once the change takes place, the monthly insurance premium paid on a 30-year, fixed-rate FHA-insured loan, for example, will increase by $33. “Our main concern with any regulatory change is to ensure that our customers are able to demonstrate without a doubt their adherence to both the letter and spirit of that change,” said IDS Executive Vice President Mark Mackey.  “Whether, as in this case, it’s a small system change or a large-scale development overhaul, we’re willing to do whatever it takes to keep our customers compliant.” According to IDS customer Andrew Weiss-Malik chief operating officer of 360 Mortgage Group, his company, while not an advocate of increasing charges to borrowers, recognizes that the FHA must do what is necessary stay profitable. “Interest rates are at record lows and an increase in the actual rate, taking into account the mortgage insurance, still results in a phenomenal rate,” Weiss-Malik said.  “These changes will affect the industry by making private mortgage insurance more competitive.  I would expect to see more FHA eligible business move over to conventional programs.”

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