There’s an interesting article out today by Christina Mlynski, discussing the new nominee for the Head of the FHFA. The Obama administration recently nominated NC Congressman Mel Watt for this job. It’s the MASSIVE Agency that resides over HUD, Fannie Mae, Freddie Mac – all things mortgage. Apparently, these are the guys who initially came up with the much “controversial” FHA PMI Endorsement Date of May 31, 2009 for FHA Streamline Refinances.
In her post she quotes JP Morgan as saying they feel that if he actually becomes the head of the Agency, Watt would push the May 2009 date for HARP refinances back, allowing more homeowners the opportunity to refinance. My question is, could this also affect the FHA PMI Endorsement Date for FHA Streamline Refinances?
Again, to be clear, the point to this article was that there was a real opportunity in the minds of Investors at JP Morgan that the date to be eligible for a HARP refinance could be pushed back, there’s no mention of the FHA Streamline Endorsement Date changing – however, logic for changing one date would dictate (in my mind anyway) that the logic would transfer to the FHA Streamline and the reduced FHA PMI rates. Congress would do well to listen to this logic!
Meanwhile, given that Watt was nominated by the Obama Administration, and that the administration appears to be in favor of changing the HARP eligibility date, it’s likely that Watt would also support such a change, the report said.
“If the odds of this are 60-70% hypothetically, then there could change — up to 70% change of a new director, times a 70% change he would support a change,” the analysts noted.
For instance, the effect of changing the HARP cutoff from May 2009 to May 2010 would save borrowers about $5 billion per year by refinancing at today’s rates, compared with roughly $25 billion that could be saved annually by letting the pre-May 2009 loans continue to HARP, according to the report.
Why This Is Good For The Economy AND FHA Borrowers
Why is this so important? Because for FHA Loans that have an endorsement date PRIOR to June 1, 2009 – FHA will lower its Upfront Mortgage Insurance Premium (UFMIP what we refer to as the FHA PMI premium) for FHA Borrowers to just .01 percent. This compares to the current Upfront FHA PMI Premium of 1.75%… but this is not the “killer” that makes refinancing worth it – or not.
For the “Special″ Streamline FHA Program (Endorsed Prior To June 2009), FHA will also charge an annual FHA PMI premium of .55 percent (which you divide by 12). This is NOT significant for those with mortgages taken out prior to May of 2009, as your current FHA PMI monthly mortgage insurance for FHA is exactly that same .55 percent.
To qualify for the FHA Streamline Refinance with low FHA PMI in NC, you will need to meet these requirements:
- You must be current on your existing FHA Mortgage (USDA, VA and Conventional loans do not qualify)
- Your current FHA mortgage must have been endorsed prior to May 31, 2009. (Find Out What That Means)
Additionally, FHA says that to qualify:
- Employment verification is not required with an FHA Streamline Refinance
- Income verification is not required with an FHA Streamline Refinance
- Credit score verification is not required with an FHA Streamline Refinance* (See notes below regarding AUS findings)
- A new appraisal is not required with an FHA Streamline Refinance
We’ll be glad to help you learn more about the “PMI” rates for FHA, or about other refinance programs. We can also help you do a Streamline Refinance for an Investment Property you no longer live in Too – If you have questions or want more information about Endorsement Date for FHA Streamline? just give us a Call! Steve and Eleanor Thorne 919-649-5058. We’ ve saved some families, this year, over $320 a month! That’s a RAISE, or a Car Payment! So, call us, and let’s see if it makes sense for you to refinance!