Why the heck did FHA choose May 31, 2009 Cut Off Date for Streamlined Refi's?

by 12 Mar 2012

Well, last month there were no FHA updates to report—but I  just knew that the “silence” meant that they are dumping a bunch of changes on you—and what a dump It’s going to be.

The big news are the 3 changes to the FHA annual and Up Front mortgage insurance.  FHA issued Mortgagee letter 2012-4 and it was out there for few days until they realized that they had some incorrect LTV’s listed on the chart.  They pulled the old mortgagee letter and issued another one, with the new LTV’s but never changed the date or the ml number.  So, be sure that you have the right mortgage letter.

Speaking of dates, there are two different “effective” dates that come into play here, and each date goes into effect when the FHA case numbers are assigned.

The MIP updates go into effect for loan amounts 624,999 and lower.  That date is April 9

For loan amounts 625,000 and higher, the increased MIP date is June 11, 2012

Mortgagee letter 2012-4 also covers the decrease in MIP for streamlined refis for existing FHA loans that have been endorsed on or before May 31, 2009.  It’s not the closing date and it could take anywhere from 2 weeks to 2 months to get an FHA endorsement.

This goes into effect for all case number assigned on or after June 11, 2012.

I know, I know, you’re probably asking where the heck did they come up with that date?  Well, it just so happens that up front MIP refunds are made during the first 36 months of the loan, right?  So any loans endorsed prior to June, 2009 are not entitled to a refund.  Why give back money that has already been spent?

You can read the entire article (including 10 others)  www.MortgageCurrentcy.com for only a buck.

COMMENTS

  • by John Pedigo | 5/8/2012 2:09:12 AM

    This makes absolutely no sense for me. My mortgage closed on April 28, '09, but wasn't endorsed until June 23rd. Even under the new streamline, I wouldn't be eligible for ANY UFMIP refund according to FHA Connect - .00000 (yes, 5 zeroes) for either May or June. :-/

  • by KarenDeis | 5/8/2012 1:34:56 PM

    Yeah, so sorry to hear that you got stuck between the closing dates and the endoresement dates. It usually means one of two things: that your original lender was not on the ball when it came to submitting the final file to FHA OR that FHA staff let it set on their desk for months.

  • by AsaD | 6/3/2012 4:53:01 PM

    Can that date be revised? We closed May 14th and our case was endorsed August 27th - 3.5 months later!!! What the... It seems crazy that there's no work-around for cases like ours. We had absolutely nothing to do with the work that happened after our closing.

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