1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

Okay, I wanted to give you an idea as to what our market is doing.  The Naples area has suffered just as the rest of the country from the past three years of economical duress.  Our prices have re-adjusted approximately 62% of their inflated highs of 2006.  The inflated prices were due to many things as we all know now;  Lending subprime market, over aggressive realtors pricing each home more then the last, investors who were not qualified to afford the purchases they were making… you see the picture. 

I would be happy to put you on an automated email system which will alert you to any new or revised listings of properties which may interest you.  This is a terrific way to keep on top of the market changes.  We are seeing prices leveling at this time.  You want to make sure you know when they start to move up again as when they do —- they will move quickly in some cases.  Our inventory is also reducing which will have an influence on the market values as well.  You want to keep on top of that too.

Well, let’s hope for a Happy, Healthy, Prosperous New Year!  Welcome 2010! 

Keller Williams Realty Now Third-Largest In U.S.

Okay, enough with the weather forecast. Let me chat about what I really know best – the real estate market on Marco Island and Southwest Florida.  Recently, Attorney Bill Morris on Marco Island  featured an article on his website..  here it is for your reading enjoyment…

04/15/2009

McCollum Unveils Website to Help Homeowners Avoid Mortgage Fraud-Related Scams

TALLAHASSEE, FL – Attorney General Bill McCollum today unveiled a new website designed to help homeowners avoid mortgage fraud-related scams. The website, at http://myfloridalegal.com/mortgagefraud, provides consumers with easy access to current investigations, complaint forms, and tips to identify and avoid foreclosure rescue fraud. Foreclosure rescue fraud, or fraud involving loan modifications related to foreclosures, is the complaint topic most commonly reported to the Attorney General’s Office and involves the charging of an up-front fee for foreclosure rescue services before any services are provided, if they are provided at all.

“Companies and individuals are taking advantage of our homeowners in these tough economic times by preying on their financial situations,” said Attorney General McCollum. “If we can increase consumer education and empower people to spot scams and avoid them in advance, we can help decrease the number of victims targeted by this fraud.”

Consumers can obtain information about active litigation involving companies the Attorney General has taken action against and can download affidavit forms to fill out if they have been victimized by one of the companies on the list. Consumers can also access a list of investigations being conducted by the Attorney General’s Mortgage Fraud Task Force to see if a particular company is currently being scrutinized.

The website also features answers to frequently asked questions, consumer tips, and a list of warning signs that a company or an individual might be engaging in foreclosure rescue fraud. Additional resources are also available, including a link to a new Florida Bar website containing information for attorneys and consumers on legal training, housing help workshops and clinics being held in Florida, and information concerning the Florida Bar Lawyer Referral Service and qualified legal aid agencies throughout Florida.

In 2007, Attorney General McCollum initiated an agency-wide Mortgage Fraud Task Force to address the issues of mortgage and foreclosure rescue fraud. Since then, the Task Force has filed six lawsuits, has settled with seven companies, and is actively investigating more than 50 additional companies under the Foreclosure Rescue Fraud Prevention Act, which took effect October 1, 2008. The Task Force has also reviewed information pertaining to the business practices of more than 200 foreclosure rescue businesses.

Earlier this month, Attorney General McCollum called together representatives from state agencies, law enforcement groups, prosecutorial entities and the Florida Bar to address the state’s mortgage fraud issues and to develop a cooperative approach on behalf of Florida’s homeowners. The group will focus on a systematic method of triaging complaints and a cooperative interagency consumer education initiative. By establishing a team approach, Florida will receive an “all hands on deck” approach to ensure no case goes unaddressed.

 

The Japanese have a saying “fall down 6 times, get up 7”. With almost every situation in life, weather it be business, family, relationships, and/or money, if you adopt this attitude you will become unstoppable.

The following 23 mistakes are the most common responses that I (Jeff Adams) received when asked successful investors to talk about their past.

Read them, study them and don’t forget them. Anybody can receive information, it is the wise man that prospers by it and puts it to use.

1) Waiting Too Long to Start Real Estate Investing
2) Not Having a Plan
3) Not Requiring Written Repair Bids – Every Time
4) Not Charging Tenants for Damage
5) Not Screening Tenants for Eviction Risks
6) Paying for Repair or Construction Before 100% Completion
7) Paying Full Price for Late Repair of Construction
Allowing Your Real Estate Business to Run Your Life
9) Over-Improving a Property Bought to Flip or Rent
10) Running Out of Cash
11) Forgetting About Asset Protection
12) Over-Analyzing Property
13) Becoming Friends with Tenants
14) Underinsuring Property and Risk
15) Ignoring Cash Flow
16) Punishing Bad Tenants Without Rewarding Good Ones
17) Permitting Tenants’ Problems to Spoil the Positives of Real Estate Investment
18) Letting Rent Collections Get Personal
19) Only Looking at Properties When There Is a Problem
20) Missing Out on Special Loan Programs
21) Inability to Sell a Rehab Property or to Rent a Rental Property
22) Not Thinking of Tenants as Potential Buyers
23) Renting to Relatives