The FHA has been under a lot a stress, so of it’s more recent loans in 2009 have started to default. However, due to higher Fees the FHA reserve fund has increased, but it’s still on thin ice.
By Clea Benson – Aug 2, 2012 1:59 PM PT
The Federal Housing Administration may end the fiscal year with about $3 billion in reserves after premium increases and rising loan volume offset a previously forecast shortfall, people with knowledge of the numbers said.
U.S. Department of Housing and Urban Development officials cited the turnaround to lawmakers today as Democrats push for a Senate vote on Carol Galante’s nomination to head the agency, according to the people, who declined to be identified because the discussions are private. Galante, 57, has been acting head of FHA, which is overseen by HUD, since July 2011.
“Carol Galante has taken action to change the way that HUD and FHA do business, including steps to help FHA better manage risk,” according to a HUD document that has been circulating among members of Congress.
The improved picture has emerged after months of turmoil at FHA, which in February was set to ask for a $688 million in a taxpayer subsidy that would have been the first in its 80-year history. The need for a subsidy was eliminated when the agency received nearly $1 billion from a legal settlement with mortgage servicers over flawed foreclosure practices.
FHA’s troubles stemmed from rising defaults on mortgages it insured as it took an expanded role in the market during the peak years of the housing bubble. The agency now insures about 7.1 million loans with outstanding balances totaling more than $1 trillion, triple the amount it held five years ago.
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Proprietary OC Housing News home purchase analysis
512 South FONDA St La Habra, CA 90631
$309,900 …….. Asking Price
$535,000 ………. Purchase Price
5/12/2007 ………. Purchase Date
($225,100) ………. Gross Gain (Loss)
($42,800) ………… Commissions and Costs at 8%
============================================
($267,900) ………. Net Gain (Loss)
============================================
-42.1% ………. Gross Percent Change
-50.1% ………. Net Percent Change
-10.3% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$309,900 …….. Asking Price
$10,847 ………… 3.5% Down FHA Financing
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$299,054 …….. Mortgage
$78,738 ………. Income Requirement
$1,376 ………… Monthly Mortgage Payment
$269 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$77 ………… Homeowners Insurance at 0.3%
$312 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,034 ………. Monthly Cash Outlays
($208) ………. Tax Savings
($454) ………. Equity Hidden in Payment
$13 ………….. Lost Income to Down Payment
$97 ………….. Maintenance and Replacement Reserves
============================================
$1,482 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$4,599 ………… Furnishing and Move In at 1% + $1,500
$4,599 ………… Closing Costs at 1% + $1,500
$2,991 ………… Interest Points
$10,847 ………… Down Payment
============================================
$23,035 ………. Total Cash Costs
$22,700 ………. Emergency Cash Reserves
============================================
$45,735 ………. Total Savings Needed
The property above is available for sale on the MLS.
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Cost of Ownership Analysis
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Nearby Foreclosures
Gain a competitive advantage over other buyers. By locating distressed properties -- before they hit the MLS -- you can discover where tomorrow's REOs and short sales will appear. Most of these properties are not listed on the MLS, but they will be soon. Research properties in advance and get a jump on your competition. Don't miss out on another deal because you couldn't act quickly. Use this tool to your advantage! The red properties are already bank owned. As soon as REO asset managers prepare them for sale, they will be on the MLS. Get ready! The green and blue properties have owners who are not paying their mortgages. They may be offered as short sales, or they may go through foreclosure and become REO. Either way, they will also likely be available on the MLS soon. Find your next home! Be prepared to offer on these properties by researching them in advance or risk losing out to buyers who are have done their homework. Start your research today! To find distressed properties, enter your desired location and press search. Scroll through list by pressing "next."Comparative Market Analysis
Are you ready to make an offer, but you are worried you will either (1) underbid and miss the property or (2) overbid and pay too much? Don't make a mistake and miss your dream home, or worse yet, overpay for it! Get the advice of a seasoned professional. Contact us at info@ochousingnews.com today!
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$375,000 504 South FONDA St |
0.02 miles 3 bd / 2 ba 1,400 Sq. Ft. |
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$310,000 1908 SKYWOOD St |
0.23 miles 3 bd / 2 ba 1,464 Sq. Ft. |
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$339,900 670 ARCHWOOD Ave |
0.38 miles 3 bd / 2.25 ba 1,302 Sq. Ft. |
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$365,000 450 North DEXTER St |
0.6 miles 4 bd / 1.5 ba 1,390 Sq. Ft. |
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$373,000 521 North PALM St |
0.69 miles 3 bd / 2 ba 1,303 Sq. Ft. |
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$330,000 520 East 1ST Ave |
0.7 miles 2 bd / 1.75 ba 1,246 Sq. Ft. |
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$274,900 304 East 1ST Ave |
0.84 miles 3 bd / 2 ba 1,427 Sq. Ft. |
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$319,000 321 PENMAR Ave |
0.85 miles 3 bd / 2 ba 1,314 Sq. Ft. |
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$239,000 220 GRACE Ave |
0.97 miles 2 bd / 1 ba 1,122 Sq. Ft. |
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$279,900 221 West OLIVE Ave |
1.1 miles 3 bd / 1.5 |
To Rent or Own: How Consumers Decide Between the Two
In a study to examine what factors would drive a person to rent or own in their next move, Fannie Mae found that a mix of demographics and attitudinal drivers were key, while negative housing events appears to do little to thwart would-be buyers.
The study categorized respondents into three groups: renters, those with a mortgage, and outright homeowners.
After gathering demographics for the three groups, the study found that renters tended to be younger and fall into the low income category. For the survey, 46 percent of renters were in the 18 to 34 age group, and 43 percent of renters had an annual income under $25,000. Renters also tended to be single (41 percent) and employed part-time (47 percent).
Homeowners with a mortgage, on the other hand, were more likely to be in the 35-49 age group (41 percent), married (77 percent), and employed full-time (64 percent). They also tended to have a higher income, with 23 percent earning more than $100,000 and 39 percent earning between $50,000 to $100,000 thousand.
Those who were outright owners of their home tended to be 65 and older (46 percent) and retired (49 percent).
The study explained that traditionally, research has focused almost exclusively on demographic factors when trying to dissect the own-rent decision process.
But, based on the survey, attitudes toward housing and finances also had a significant influence on individual decisions to rent or own. The groups most affected by attitudinal drivers were renters and those with a mortgage.
The housing attitude that was found to be the most influential is the belief that “owning or renting makes more sense financially over the long term.” This is what drove all three groups to behave accordingly, depending on their situation.
One attitude that affected renters and discouraged them from buying was concern with affordability and housing maintenance.
An individual’s existing homeownership experience, whether it was positive or negative, was a primary driver of the own-rent intention for a mortgage owner, but not for those who owned their home outright. According to Fannie Mae, the results suggest that once consumers buy a home and have a positive ownership experience, they want to continue being a homeowner rather than consider renting.
For renters and those with a mortgage, the belief in homeownership and aspirations to own a home one day was important in determining whether one expected to own or rent in the future.
For outright owners, demographics, rather than attitudes, determined housing choice preference. According to the study, this is probably due to the fact that the upside financial possibilities are less likely, considering most outright owners are retired and past their income peak.
The study also found that troubles in the housing market over the years did not prevent people from aspiring to buy. Even factors such as exposure to mortgage default, perceived home value appreciation/depreciation, and self-reported underwater status were not significant in predicting intentions to own or rent.
The study analyzed full year 2011 data from the Fannie Mae National Housing Survey and incorporated 12,014 individuals.