What are everyone's thought on new FHA Motgage Insurance guidelines?

[delsan19]

From Associated Press:
People who take out FHA-backed loans pay a smaller down payment, as low as 3.5 percent of the home price. But they are subject to two additional fees (Starting SEPT 7)— one at the start of the loan and an annual fee. Both fees are typically spread out in monthly installments over the life of the loan.

Borrowers who take out loans through FHA pay an annual fee of 0.55 percent of the total loan. FHA officials expect to raise that to 0.9 percent, though the bill would give them the power to hike it as high as 1.55 percent.

Earlier this year, the FHA raised the upfront fee to 2.25 percent of the total mortgage amount from 1.75 percent.

Scary....

[Susan Haughton]

FHA is bleeding money, so it comes as no surprise;  as long as the default rates stay high, they have no choice but to expect borrowers to pony up.

At 3.5% down, though, some borrowers should be able to do 5% down and go conventional.

[delsan19]

True... I'm just getting back into real estate after 5 years. A LOT has changed...not to mention the fact that I am selling in my home town (Birmingham, AL) not Dallas, TX where I sold in the past...

[Susan Haughton]

Oh, wow, we lived in Alabama for a while...we were in a little town called Pickensville (yeah, it really was as remote as it sounds...stores closed at noon on Wednesday and Saturdays!), down on the Tenn-Tom.  We had a great house on the river, fabulous neighbors, but it was a little remote.  Something about buying lunch AND gas AND bait in one place was a little unnerving for me, but I loved it just the same.

Birmingham has a lot of nice areas; I wouldn't mind selling there!

My broker made the comment a few years ago when things started to change so much, "we are ALL new agents now!"  And she made an excellent point.  So much has changed!

[Bill Saunders]

Ah, the Tombigbee... you can almost hear a banjo...

I may be wrong here, but do you remember when homes were bought by, well...folks that could actually afford to buy a home? Are we not heading back to that. Home buying has passed from owning a HOME, to owning a futures option, and is now heading back to a saner world of owning a home again...

It used to be called the American Dream. OK, step off of the soapbox... sorry.

I don't think that home ownership can be for everyone, but it is hard to view that as a viable opinion in an age where everybody on the team gets a trophy because they showed up for practice.... oops...got back up there...

One of my worries is, what are we going to be doing as a nation and industry when interest rates actually go back up? and they MUST. We have become so used to rates in the cellar that many people feel this is normal..it is not.

[Susan Haughton]

  

Bill, I could not agree more...it used to be something you achieved...now it's a stock market commodity everyone feels entitled to have, even if it isn't always the right choice for everyone.  A lot of lives have been severely disrupted - at least in the short term - because of this insistence everyone should own a home or worse, they are encouraged to buy more than they can possibly afford to keep or maintain.  There are a lot of miserable people out there right now who wish they had made more conservative choices or had just stayed renters.