FHA Changes for CLTV as of September

Combined Loan-to-Value Requirements for Refinance Transactions

This Mortgagee Letter eliminates the unlimited Combined Loan-to-Value (CLTV) ratio that was first introduced in Mortgagee Letter 2007-11. With the exception of streamline refinance transactions, the combined amount of the FHA-insured first mortgage and any subordinate lien may not exceed the:

• applicable FHA loan-to-value ratio  
• AND geographical maximum mortgage amount.

FHA is returning to its former CLTV limit for case numbers assigned on or after September 7, 2010.

Provided that the new FHA-insured first mortgage meets the eligibility criteria for mortgages with secondary financing outlined in HUD Handbook 4155.1 paragraph 5.C., existing or modified subordinate liens may remain outstanding; and/or new subordinate liens may be offered to facilitate the refinance. The chart below provides the applicable CLTV for refinance transactions. Maximum CLTV for Refinance Transactions

Rate and Term (or No Cash Out) Refinances                                     97.75%  (CLTV)

Refinances for Borrowers in Negative Equity Positions                               115% 

FHA-to-FHA Streamline Refinances With or Without Appraisals      125%  (CLTV)

Cash-out Refinances                                                                               85%   (CLTV)

Jeremy S. squared Op-ed Follow up -

 op-ed in the WSJ last week should be a laughing stock! I suspect these two goof balls know it too.  I find little value to spending time rebutting but I said I would so here goes.

There can be no bond bubble because it's a savings account not an equity.  It makes no difference what the yield is you still get your money back at maturity, guaranteed.   Nothing

is selling comes with a guarantee.  They're equity guys drumming self-preservation.   

Kudos to the CNBC crew that interviewed Professor Seigel as they correctly identify flaws as follows:

CNBC "I wonder, Professor Seigel,  how there can be a bond bubble specifically in treasuries when the government controls it and the government has ... explicitly pledged to keep interest rates low.  Does this mean that the bubble, if there is one, has to pop or can the air be let out more gradually as the government controls it?"
 
Siegel "Gobbeldeegook...1.4 Tarillllliiiooon dollar deficit.. Bippity-boppity-boo."

CNBC then makes a point that underscores what I said above - a bond is an investment has a guarantee and therefore cannot deflate nor can it inflate -  your money is always there at maturity.

It's a savings account, stupid!

Why I'm not pushing the rates-could-reverse-sharply pill.

Or the.reverse-quickly one either.  History clearly shows us that the Fed sets the trend.

Stormy
    www.moslereconomics.com
        Counter Insurgency, Deficit Terrorist Unit

Market close - no surprise!

Treasury auction met higher demand than opposing opinions expected and in turn MBS recovered from earlier lows.  The FNMA 30 year 3.5% coupon ended the day at 100.66 – up 19bp. 

.

Stock slid on news that existing home sales plummeted in July.  

                               

Contrary to the     

   

op-ed last week in the WSJ, The Great American Bond Bubble  , we are heading into a depression.  How painful will it get before mainstream and our policy makers lay down their foolish ideals, accept the truth and respond appropriately?   

Make no mistake – there is an appropriate response that can fix our economy and fix it fast.   Our only constraints are political. 

‘The Great American Bond Bubble’ oh MY!

This post is in rebuttal to today’s Wall Street Journal op-ed by Jeremy Siegel and Jeremy Schwartz fashionably titled ‘The Great American Bond Bubble’.    For anyone who is unable to view this WSJ piece in its entirety don’t feel left out!  Mr. Siegel was a guest on CNBC today –watch it here.

Going to have dinner, go swimming then will come back and finish my rebuttal.  It might be long, could be short.  Will post it here between now and Friday afternoon.   Your interest is appreciated.  lol  Interest.  Appreciate.  Get it?  

Resp,

MortgageAngel

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