Today, the Obama Administration announced steps to support FHA loan holders seeking a refinance and servicemembers and veterans who were denied a lower mortgage interest rate or unjustly foreclosed upon.
Fee Reduction for FHA Borrowers Seeking to Refinance
FHA Streamlines allow borrowers with FHA-backed mortgages to refinance their loans at a lower cost. The FHA will cut its fees for refinancing loans already insured by the FHA that were issued before June 1, 2009. FHA announced that the reduced annual MIP will be effective for case numbers assigned on or after June 11, 2012 as long as the FHA loan being paid off was insured prior to June 1, 2009.
Those obtaining an FHA Streamline will pay an upfront insurance premium equal to 0.1 percent of the mortgage amount, plus an annual fee of 0.55 percent. This is far less than the upfront mortgage insurance premiums recently raised on new FHA loans, which is a 1.75 percent upfront fee plus a 1.25 percent annual fee.
It’s estimated that 2-3 million borrowers could be eligible for this savings.
Providing Relief for Servicemembers and Veterans
In addition to these changes for current FHA loan holders, major servicers will offer relief for veterans and servicemembers in the following ways:
• Every servicemember with a foreclosure since 2006 will have a new review conducted and those wrongly foreclosed upon will receive compensation.
• Servicemembers will be refunded money they lost due to a wrongful denial of lower mortgage interest rates.
• Relief will be provided for servicemembers forced to sell their homes for less than what they owe due to a change in station.
• Certain foreclosure protections will be extended to servicemembers serving in harm’s way.
• $10 million dollars will be paid into the Veterans Affairs fund that guarantees loans for veterans.
For more information about federal laws that protect the civil rights of servicemembers, visit the Department of Justice. Check in with Zing for the latest news on mortgage rates, FHA loans and VA loans.
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