FHA – Proposed Changes – Yikes!


Yikes is right!!!!

Via Gary Berset (RE/MAX Executive Realty, Medway, MA 02053):

FHA – Proposed Changes – Yikes!

(This piece is attributed to one of my mortgage partners, Michael Dunsky, VP of Mortgage Lending with Guaranteed Rate, and his colleague, Linda Davidson, Sr Loan Officer at Service First in Texas. With their permission, I share it with you.)



FHA may be tightening their guidelines and getting tougher! (HR 5072)

Below are some of the proposed, critical changes to FHA;  

·        Raising FHA Down payment to 5%: This move is expected to do little to strengthen FHA’s capital reserve ratio and will instead put homeownership out of reach for many families while depleting cash reserves for others.

 ·        Increasing monthly MIP (mortgage insurance) from .55 to all the way up to 1.55.




  •  Example on $250k loan amount… current monthly cost $114.58, proposed, $322.92!!!


     Limiting FHA’s market share to 10 percent of the housing finance market: Although we all welcome the return of private lending, FHA is appropriately serving its countercyclical role of providing credit and needed liquidity when the private market is not available to many homebuyers. Legislating an arbitrary reduction in market share in the midst of a housing downturn will have a MAJOR negative impact on home ownership.

  • Reducing FHA Loan Limits: FHA’s loan limits were temporarily increased in the Economic Stimulus Act of 2008. With the limited availability for private financing that currently exists, decreasing these limits would have a significant negative impact
    on the recovery of many housing markets and the overall liquidity of the mortgage industry.


These changes will change the landscape of lending as we know it and, without a doubt,  have a negative impact on our business. 



Call To Action-   Contact Your Representative Today!

I am asking everyone to send  a note to your representative today regarding HR 5072.

The link is below and will take less than 5 minutes to complete (if it does not connect you directly please copy and paste into your browser).   Our industry needs everyone’s vote!   

Please visit:





What Mike wrote-

I am very concerned about the passing of HR 5072.   As a mortgage loan officer, most of my clients are low to moderate income.   Increasing the down payment from 3.5% to 5% and/or increasing the monthly MIP could be the difference of whether qualified buyers can purchase.


With the huge pendulum swing of investor and lender tighter guidelines (as well as FHA, Fannie and Freddie’s tightening), coupled with lower appraisal values (and stricter appraisal guidelines), I feel strongly that we need to give the market time.   I feel strongly that what has been done already will decrease significantly the foreclosures and short sales in the future.   We don’t need to make it any harder to purchase a home for those buyers that are income and credit worthy.


I ask that you reconsider voting for the passing of HR 5072.


Thank you. 


The market conditions are tough enough for those relying on FHA financing… these proposed changes, should they be enacted, make it impossible for many to own their own homes.





Gary Berset, Realtor

RE/MAX Executive Realty



Direct: 508-359-1038

Cell: 508-820-6622



About susanmorrison

After living in Walpole, MA for many years, our family was transferred to the west coast when I was a senior in high school. In 1983, I graduated from Mission San Jose High School in Fremont, California. I am also a 1987 graduate of Providence College with a major in liberal arts and a minor in business administration. I bring to the table many years of sales experience beginning with thirteen years in Corporate Sales at Delta Air Lines. I'm the mother of three children and I'm very active within the Franklin, MA community. I am also a cancer survivor and support the American Cancer Society Charities.

My husband and I have built five homes and I've lived in a variety of other locations including Toronto Canada, Irving Texas and my current home in Franklin, MA. As a result of all my moving around, I came to the conclusion that I was an expert at moving...why not become an expert on the other side of the table? I earned my real estate license in 2004 and believe that I have found my true niche'. I can empathize with my clients on a variety of levels; whether they are buying or selling. And, like so many other good realtors out there, I believe that possessing good communication skills is one of the many keys to success.

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