Alert: Reduced FHA Insurance Premiums Repealed

HUD SUSPENDS MIP REDUCTION

The Department of Housing and Urban Development (HUD) announced today that the recent Reduction of Mortgage Insurance Premiums (MIP), outlined in FHA Letter 2017-01 were suspended.

According to posted information from Housing Wire, the letter stated that a subsequent Mortgagee Letter will be issued at a later date should this suspension or policy change.

“FHA is commited to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers,..”
as stated in the letter this afternoon.

Please see this link to read the full article, but know that CHM is committed to you and your borrowers and with this suspension of policy, there will be some loans that will need correcting in respect to compliance.

Please contact us today should you have questions.

Don Parsons
Mortgage Advisor
(949) 428-3099
dparsons@commercemtg.com

How Appraisers Figure “Price Per Square Foot”

home-blueI recently read an article where an appraiser talked about how he figured “price per square foot.” He said it has become a common practice to take the selling price and divide it by the gross living area which has, in some areas, become the basis for establishing the listing price of a home.

However, it’s not as simple as that.

Appraisers also rely on an index provider called “Marshall & Swift” (MarshallSwift.com), which provides various cost estimates for different types of properties. When appraisers figure a price-per-square-foot estimate, they take the following into consideration.

  • Superior/inferior features as compared to other properties
  • Dissimilar amenities
  • One-story home versus two or more stories
  • Length of time on the market
  • Seller concessions
  • Size of the land
  • Location of the home (i.e., view, utility easements, corner lot)
  • Seller motivation to sell (i.e., foreclosure, short sale)

There are many stories out there of buyers backing out of contracts because the square foot price of the home on the listing agreement (or verbal communication) did not match the appraiser’s estimate. So, when a buyer asks you the question, “What’s the square foot price?” you can say…“It depends upon….”

Home Prices on the Rise

More positive news from the housing sector, CoreLogic reported yesterday that home prices rose 0.7% from December to January and surged nearly 10% compared to a year ago. The 10% increase was the largest yearly since April of 2006 and was the 11th monthly increase in a row.

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