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.

Poll

Should CFPB have more supervision over credit agencies?