FHA Mortgagee Letters

FHA Mortgagee Letters

With all of the recent changes in the mortgage industry and the departure of subprime and other non-traditional mortgage products, the market share of FHA insured loans has swelled to 30% of all purchase mortgages. Politicians, advocacy groups and a sizeable percentage of the American public are afraid that Federal Housing Administration has become “the new subprime”.

HUD leaders have recently announced major initiatives to mitigate risk that include additional oversight of underwriting standards, increasing the required amount of mortgage insurance premiums and reviewing poor-performing, FHA-approved mortgage lenders.

It is important for mortgage and real estate professionals to keep abreast of the material changes to the Federal Housing Administration’s policies. To do so, I recommend that they read the HUD issued FHA Mortgagee Letters as they are released.

HUD issues FHA Mortgagee Letters to inform lenders about operations, policies, procedures, and changes. Between 1989 and 2009, they have issued an average of 42 a year. Last year, HUD issued 53. All of the Mortgagee Letters can be found on HUD’s website.

Here is a short list of some of the most recent relevant FHA Mortgagee Letters:

FHA Mortgagee Letters
10-02     Increase in Upfront Premiums for FHA Mortgage Insurance
09-53     Real Estate Settlement Procedures Act (RESPA) and FHA Related Policies
09-50     2010 FHA Max Loan Limits
09-46a   Temporary Guidance for Condominium Policy
09-46b  Condominium Approval Process for Single Family Housing
09-32     Revised Streamline Refinance Transactions
09-29     Appraisal Portability
09-28     Appraiser Independence
09-19     Condominium Approval Process – Single Family Housing
09-15     Using First Time Home Buyer Credits for Downpayment
09-08    Limits on Cash-Out Refinances

Mortgagee letters are informational memos issued by HUD for clarification of new and existing HUD policies.

The goals of the Federal Housing Administration are: to improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgage loans and to stabilize the mortgage market.