Steve Myers, Broker
Lake Weir Realty, Inc.
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Steve Myers, Broker
Lake Weir Realty, Inc.
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

This insurance Fund is the backbone of the FHA single-family and reverse mortgage programs. In reporting on findings of the annual independent actuarial study, HUD indicates that, in the midst of continued weakness in housing markets across the county, the MMI Fund capital ratio remains positive this year at 0.24 percent.

With new risk controls and premiums put in place by the Obama Administration, the independent actuaries predict the Fund will return to the Congressionally-mandated threshold of two percent capital more quickly than was projected by last year’s review. The economic value of new insurance endorsements in FY 2011 for the Fund was nearly double that of FY 2010 endorsements, being close to $11 billion.

As was the case last year, the new actuarial study shows that FHA is expected to sustain significant losses from loans insured prior to 2009, and thus its capital reserve remains below the congressionally mandated threshold of two percent of total insurance-in-force. However, the actuaries’ report concludes that, barring a further significant downturn in home prices, the MMI Fund will start to rebuild capital in 2012, and return to a level of two percent by 2014—outpacing last year’s prediction. The actions taken by this Administration have put FHA into a position where the actuaries expect rapid growth in capital once the housing market begins a broad-based recovery.

“In the midst of a tough housing market the FHA MMI Fund continues to be actuarially sound,” says Acting FHA Commissioner Carol Galante. “Because of the Obama Administration’s strategy to protect the FHA Fund—tightening of risk controls, increased premiums to stabilize near-term finances, and expanded loss mitigation assistance to avoid unnecessary claims—this past year’s endorsements had the highest credit quality ever recorded, and will yield historically high levels of net receipts in the years ahead.”

FHA’s capital reserve ratio measures reserves in excess of those needed to cover projected losses over the next 30 years. The independent actuarial reviews of the MMI Fund estimate FHA’s capital reserve ratio to be 0.24 percent of total insurance-in-force this year, falling from 0.50 percent in 2010. FHA’s total liquid assets (cash plus investments) grew by $800 million since last year, to $33.7 billion. That amount is $1.9 billion higher than at the end of FY 2009, and is also $7.7 billion higher than was predicted last year by the independent actuaries. At the same time, the economic net worth of the Fund fell by $2.1 billion this year, from $4.7 billion to $2.6 billion, as FHA continued to build loss reserves to prepare for greater claims in the coming years.

Losses on loans insured through the first quarter of fiscal year 2009 continue to place a significant strain on the Fund and are expected to reach $26 billion within a few more years. Though they were prohibited in 2009, the ongoing effect of so-called “seller-funded down payment assistance loans” is still significant. The net expected cost of those loans, as projected by the independent actuaries, grew by $1.8 billion over the past year to $14.1 billion. Conversely, the actuaries found that the FY2010 and FY2011 books are expected to be very profitable, providing significant net revenues to offset losses on earlier books. Loans insured to-date under the Obama Administration are providing $18 billion in economic value for the MMI Fund. Under the base-case forecast used by the independent actuaries, the FY 2012 book will add an additional $9 billion in economic value to the Fund.

Since taking office in 2009, the Obama Administration has instituted sweeping reforms to strengthen the MMI Fund. New policies have improved loan quality, strengthened lender enforcement, and helped to protect future loan performance. This has been the most comprehensive update to FHA credit policies, risk management, lender monitoring, and consumer protections in its history. To emphasize this new commitment to risk management, HUD hired the first-ever FHA Chief Risk Officer and established a permanent Risk Office to expand FHA’s capacity to assess financial and operational risk, perform more sophisticated data analysis, and respond to market developments. HUD also increased enforcement of FHA lenders, eliminated approval for loan correspondents, and increased net worth requirements for lenders wanting to underwrite FHA loans. Additionally, HUD introduced a new premium structure that better aligns with current market conditions, and it set underwriting minimums that combine credit score and down payment requirements to balance risk management with broad access to housing credit for borrowers who have historically met FHA credit quality standards. Specifically, a minimum down payment of 10 percent is now required of borrowers with credit scores below 580 and applicants with credit scores below 500 are no longer eligible for FHA insurance.

Over this past year, FHA:

• Served more than 1.2 million households and insured $218 billion in single-family mortgages, bringing the active single family portfolio to more than $1 trillion.
• Enabled more than 585,000 families to become homeowners for the first time. This represents 56 percent of all first-time buyers in the nation.
• Helped more than 362,000 families avoid foreclosure through loss mitigation actions.
• Helped 440,000 families to refinance their mortgage at lower interest rates, saving households an average of more than $160 per month.
• Provided access to credit for close to 40 percent of all homebuyers needing mortgages, including 60 percent of all African-American and Hispanic homebuyers.
• Reduced mortgage payments for 142,000 distressed homeowners through loan modifications. While standard modifications reduced typical payment burdens by 11 percent ($85), FHA HAMP actions reduced average mortgage costs by 24 percent ($218).

For more information, visit www.hud.gov and http://espanol.hud.gov.

Steve Myers, Broker
Lake Weir Realty
1 (352) 288-1494 

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Steve Myers, Broker
Lake Weir Realty, Inc.
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

• 15-year FRM this week averaged 3.30% with an average 0.6 point, down from last week when it averaged 3.33%. A year ago at this time, the 15-year FRM averaged 3.82%.

• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99% this week, with an average 0.6 point, up from last week when it averaged 2.96%. A year ago, the 5-year ARM averaged 3.55%.

• 1-year Treasury-indexed ARM averaged 2.81% this week with an average 0.6 point, down from last week when it averaged 2.84%. At this time last year, the 1-year ARM averaged 3.40%.

Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.

"Continued investor concerns over the state of the European debt markets kept U.S. Treasury bond yields low and allowed mortgage rates to ease once more this week. In comparison, the average interest rate of mortgages outstanding in the second quarter was 5.28%," says Frank Nothaft, vice president and chief economist of Freddie Mac. "By refinancing into today’s 30-year fixed mortgage, homeowners could shave almost $1,715 a year in interest payments on a $200,000 loan."

For more information from Freddie Mac’s Office of the Chief Economist, visit www.twitter.com/FreddieMac.

Steve Myers, Broker
Lake Weir Realty
1 (352) 288-1494 

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Steve Myers, Broker
Lake Weir Realty, Inc.
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Here are four tips:

1. Shop around. Some insurance companies have been raising house insurance costs to recoup losses from the financial crisis. Others are competing for new customers by offering lower rates. By shopping around, people can find better deals on homeowners insurance.

2. Re-evaluate coverage amounts. Many policies have inflation protection provisions, which automatically increase coverage amounts. This was a good item in the years leading up to the crash, but today they should be looked at more closely.

3. Check personal credit reports. Homeowners insurance companies check credit history before figuring rates, similar to how lenders do. This is done to help them assess the risk of payment and likely individual responsibility. Check your credit report and make sure it’s accurate so you can get the best possible rate.

4. Small claims can become expensive. Homeowners should have the highest deductible they can comfortably afford and repair minor items out of pocket rather than filing a claim. Filing a claim for every broken window or leaky pipe can increase premiums by 10-15%.

Steve Myers, Broker
Lake Weir Realty
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Steve Myers, Broker
Lake Weir Realty, Inc.
1 (352) 288-1494

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

The average 15-year fixed mortgage remained at 3.48 percent while the larger jumbo 30-year fixed rate set a new low of 4.86 percent. Adjustable rate mortgages were mixed, with the average 5-year ARM ticking higher to 3.1 percent while the 7-year ARM slid to another record low of 3.21 percent.

A lackluster jobs report brought mortgage rates down for a sixth consecutive week. Fears of a looming recession or prolonged economic malaise have enhanced the appeal of long-term Treasury securities, with yields venturing into record-low territory. Fixed mortgage rates and yields on mortgage-backed bonds are closely related to yields on 10-year Treasury notes. While the Federal Reserve may take steps to further reduce these long-term interest rates in hopes of bringing mortgage rates still lower, expanding the pool of eligible refinancers would make the low mortgage rates more impactful on the economy.

The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.35 percent, the monthly payment for the same size loan would be $995.62, a difference of $246 per month for anyone refinancing now.

Steve Myers, Broker
Lake Weir Realty
1 (352) 288-1494 

Steve Myers is Lake Weir Florida’s Real Estate Expert. To view Lake Weir area listings, visit Lake Weir Realty.

Lake Weir Blue Sunrise

Snow Birds will soon be coming down!
There are still bargains, but the list is changing!
The total number of bank Repo’s in the Marion County MLS at
any one time has dropped sharply in the last year!

The majority were listings between $10,00 and $ 65,000.
The drop in supply in this range has caused the prices of these to go up in the last year,
especially on the cheaper ones. The Bad news is that homes up in the 6 figures price
still seem to be coming down in price. The majority of lookers are looking for Bargains!
It seems nobody falls in Love with a House anymore!

We still have plenty of lookers for upper price properties,
but it is hard for them to pull the trigger in this economy.

Interest rates have dropped even more & are unbelievably low!
In some cases, it is cheaper to own than rent!

Anybody can sign up for our newsletter at:

http://www.lakeweirrealty.com/email-newsletter/

We have pictures of Lake Weir &
also have links to local Hot Spots at our other site:

http://aboutlakeweir.com/hot-spots/