Two weeks until Christmas!  The end of the year is here and of course there is a
lot of talk of what the new year brings.  Here is a quick update of some of the
changes that could come about:

1) Once again the talk about increasing fees for FHA back loans.  If you
remember FHA is require to hold a certain amount in reserves and for the last
few years they have been well short of that amount.  Even though the recent
increase in fees has helped replenish the reserve fund, the forecast for more
defaults and costs has FHA saying they might have to raise the fees again.  The
rumors are that people with lower credit scores will be getting hit with most of
the increase. Borrowers know this could be on the way!! So make a move
now before costs increase even more.

2) After numerous attempts to lower the VA upfront fee, it now has been
restored to their original amounts until 2016.  So no decreases for VA
borrowers.  This program still remains one of the best programs available.

3) Is Fannie and Freddie on their way out?  The Mortgage Finance Act of
2011 if passed would create a new FDIC-like guarantee facility and once it
establishes value will be privatized.  This is one of the better plans that has
been introduced because this will allow a QRM (Qualified Residential Mortgage)
to only have 5% down payment.  The current QRM part of the Dodd/Frank Bill calls
for a 20% down payment for a QRM which will obviously hurt a already fragile
housing market if Freddie and Fannie are eliminated.  There is a lot involved in
order to eliminate Freddie and Fannies so we will see how all this plays
out.

4) Finally the major market mover…how will EU leaders handle their
financial mess and what affect will it have on the rest of the world.

Have a great week!

Chris Blount

Courtesy of Jeff Dicks Real Estate Keller Williams Realty

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