Good news for mortgage originators and lenders. FHA no longer limits the origination fee to 1%.
This is also good news for potential buyers looking for a FHA loan. Lenders and brokers are not non-profit organization. If they can't make at least a small profit on a mortgage they won't offer that option to borrowers. That is a no-brainer to anyone that understands the cost of origination and lending.
HUD's mortgagee letter 2009-53 covers the origination fee and the new Real Estate Settlement Procedures Act (RESPA).
The new RESPA requirements spell out how all the fees must me noted on the GFE and the settlement statement.
The new laws also require that a lender submit all GFE and Settlement statements in the case binder submitted for insurance endorsement.
FHA Expects all lenders and brokers will continue to charge reasonable fees. The new requirements will make these fees available for review.
I think this is a good thing for all legit lenders and brokers. It will remove all doubt or false accusations that have been the butt of political finger pointers. Most of which do not have a clue about the mortgage industry!
Sunday, January 10, 2010
FHA No Longer Limits Origination Fee
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It is my understanding that HUD is making more changes in the near future. I hear they are going to require buyers with a min credit score to put 10% down. There is also something coming out about Enforcing Indemnification.
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