My Perspective

The next section, which some of you may have seen some press on is the ‘Foreclosure Prevention Act of 2008′, this segment covers he much heralded ‘FHA MODERNIZATION ACT OF 2008′ including the ‘Building American Homeownership’ subsection. Here’s where they’re updating calculations and definations of maximum LTV’s and modifications to MI premiums, along with the bombshell PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE … and “… mortgagor who shall have paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine … plus … on and after October 1, 2008 … in no case shall the funds required consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale: (i) The seller or any other person or entity that financially benefits from the transaction.(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause.” And, as we all know, that appropriately kills the DPA sector of our industry.

This act from there, goes on to cover several other mind-numbing areas, but the ‘PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT SUFFICIENT CREDIT HISTORY’ one caught my eye. It says “… The Secretary shall carry out a pilot program to establish, and make available to mortgagees, an automated process for providing alternative credit rating information for mortgagors and prospective mortgagors under mortgages on 1- to 4-family residences to be insured under this title who have insufficient credit histories for determining their creditworthiness. Such alternative credit rating information may include rent, utilities, and insurance payment histories, and such other information as the Secretary considers appropriate. The Secretary may carry out the pilot program under this section on a limited basis or scope, and may consider limiting the program to first-time homebuyers. And, in any fiscal year, the aggregate number of mortgages insured pursuant to the automated process established under this section may not exceed 5 percent of the aggregate number of mortgages for 1- to 4-family residences insured by the Secretary under this title during the preceding fiscal year.” At least to me, this one hit’s the nail squarely on the head, it defines what FHA is really all about, and I like it!

I’m starting to feel just like this guy, reading all this …

The sections on Assisting Communities Devastated by Foreclosures, Providing Pre-Foreclosure Counseling for Families in Need, Enhancing Mortgage Disclosure; and Preserving the American Dream for Our Nation’s Veterans are all clean and straightforward (getting into each of them would take me sereral more weeks of blog posts)… but there’s still plenty more to go … we’ve only covered 265 pages and 81,483 words .. up next is “Subtitle B–Manufactured Housing Loan Modernization.”