In the last few months San Diego foreclosures have shown a drop in their numbers. After almost two arduous years of foreclosures, finally there is a sigh of

via San Diego foreclosures are plummeting, showing a positive sign..

Here are the 5 things you need to know about these changes:

1. Changes are effective for case numbers assigned on or after April 15th, 2010.
2. New upfront mortgage insurance premium (UFMIP) will be 2.25% for all purchase and refinance loans. The premium for H4H and HECM is 2.0%.
3. This change applies to all standard FHA Single Family Programs except the following: Title I, Section 247-Hawaiian Homelands, Section 248-Indian Reservations, Section 223e-Declining Neighborhoods or Section 238c-Military Impact areas in Georgia and New York
4. Annual premiums will not change at this time
5. There will be no discount on the UFMIP for first-time homebuyers with pre-purchase counseling.

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For the last 6 weeks I have attended several webinars, live classes and spent countless hours reading the changes coming on 1/1/2010 with regards to the new lending disclosures. I did it because I had to. I know that once my first set of disclosures go out EVERYBODY related to the transaction will get a call  from the consumer asking for an explanation of the credits and debits.

The most challenging questions that all parties will be the following:

1. Why is my Loan Officer sending me a form asking me to shop for services that I don’t even understand, ie Title Insurance, Escrow, Appraisers etc.?
2. The last page of the Good Faith Estimate gives me a grid to compare the best rate and terms. It appears that when if I go through a Bank I don’t get any credits but when I go to a Mortgage Broker  I get thousands back. Why?
3. My loan officer has explained that this document is just an estimate, and he calculated all the fees on the high side so that he does not have to submit a whole new set of disclosures if there are changes. How can I trust this is true?

The bottom line is that the creation of new disclosures will create enough confusion to make one heads spin. In a world where the excellent Loan Officers just survives, you need to be extraordinary to do well. This of course means that as you are making your business plans for 2010 you must account for most of your time being in front of the Real Estate agents and consumers with extremely simple and easy to understand language for EVERY line item in the new Good Faith Estimate. At least for the first quarter of 2010 or until the dust settles a bit. Of course by then there will be a whole new set of rules.

Over the last 12 months we have heard the saying numerous times “You don’t really know who is swimming naked until the tide goes out”. As a trusted professional in the business my approach has been, and will continue to be, to try to figure out the science behind how the tides work.

I would love to share my experience and presentations that have already helped many Realtors and consumers in the last several years to simplify and take the stress away from the home buying transactions.

mmekler@fhaexpert.net