The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced that it will raise premiums by 10 basis points, or 0.1%, on most of the new mortgages it insures.

Translation: A borrower opting for a 30-year, fixed-rate mortgage who puts 5% or more down will now pay an annual insurance premium of 1.3% of their outstanding balance. And someone who puts less than 5% down will pay a premium of 1.35%.

The agency said it will also raise premiums for borrowers with jumbo loans — or loans of $625,000 or more — by 5 basis points, or 0.05%, and increase the minimum down payment requirement on these loans to 5% from 3.5%.

FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78% of the principal balance. One exception will be for borrowers who put more than 10% down at the time of purchase.

Additional new policies include a requirement that any mortgage for an applicant with less than a 620 credit score and debt-to-income ratio above 43% must be underwritten manually. Lenders who want to issue loans to these applicants must be able to adequately document why they decided to approve the loans.

The agency also decided to put new restrictions on reverse mortgages, no longer permitting retirees to take such large, upfront payments.

The changes are an effort to reduce the agency’s exposure to risky loans and bolster its financial reserves, which have been depleted due to high delinquency rates from the mortgage crisis. The agency did not say when the new rates will take effect.

Last spring, FHA increased both premiums and upfront costs on mortgages. Such hikes make it tougher for mortgage borrowers — especially first-time purchasers who can’t afford the large down payments most private lenders require today, according to Jaret Seiberg, a Washington policy analyst for Guggenheim Partners. “They are the ones most likely to turn to the FHA for credit,” he said.

And that could have a negative impact on the housing market overall. “You can’t have a healthy housing market without a constant influx of first-time buyers,” said Seiberg.

Source: CNN

During the peak of the mortgage crisis, foreclosed homes sold at a 25% discount on average, but the market is stabilizing and the price differentiation between a home’s foreclosed valued and original market value is beginning to narrow, FNC reported.

The real estate analytics firm released a Foreclosure Market Report Monday, saying home prices are rising in many metro areas while foreclosure prices are starting to bottom out, creating some price stability.

"The fact that we are seeing a combination of rising home prices and a bottoming out of foreclosure prices is a very good sign the housing recovery is taking hold," said Dr. Yangling Mayer, FNC Senior Research Economist. "This is the very first time in the long housing recession that the two are happening at the same time."

By the fourth quarter of 2012, the average foreclosure discount, which is a comparison between a foreclosed home's market value and its final sales price, had dropped to 12.2%, compared to 25% during the peak of the downturn.

Single-family REO and foreclosure sales made up 18.1% of the market in the fourth quarter of 2012, down from 26.5% in the first quarter of the same year, FNC said.

In addition, the median foreclosure price stands at $93,000, while the median price for a non-distressed sale is hovering at $183,500, according to FNC.

Price discounts are still more dramatic at the lower end of the housing market, with discounts of roughly 18.4% for low-tier properties in the latest FNC report.

Michigan remains foreclosure dominant, with 56% of homes sold in the fourth quarter of 2012 classified as foreclosure sales.

The hardest hit states of Arizona (14.3%), California (19.8%), Florida (20.5%) and Nevada (13%) maintain foreclosure sale rates of roughly 13% to 20.5%, with Florida recording the most distressed property sales.

FNC notes that the Midwest cities of Detroit, Chicago, Cleveland and St. Louis still have the largest concentration of foreclosure sales overall.

Source: HOUSINGWIRE

Home sales prices in the Dallas-Fort Worth area hit a record high in 2012, making up losses during the recession.

The median single-family home sales price in the D-FW area was $159,300 last year, based on homes sold through the Realtors’ multiple listing service (MLS). That’s up from $140,500 in 2009 at the worst of the recession.

U.S. home prices rose in the fourth quarter of 2012 in most major cities, including the D-FW area, according to the National Association of Realtors.

Nationwide, home sales prices grew at the fastest clip in seven years.

Prices increased from a year earlier in 133 of the 152 metropolitan areas the Realtors surveyed for their fourth-quarter housing report. In the fourth quarter of 2011, only 29 U.S. markets had annual price increases.

D-FW home sales prices were up 7.5 percent from the fourth quarter of 2011. Nationwide, prices were 10 percent higher than a year earlier, with the biggest gains in Western cities, up more than 20 percent on average.

A jump in home sales combined with lower interest rates fueled the price increases.

“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” Lawrence Yun, chief economist of the Washington-based trade group, said in the report.

Quarterly price increases were strongest in Phoenix (33.9 percent), Detroit (31.3 percent) and San Francisco (28.3 percent).

These areas all saw significant home value losses during the recession and are now recovering.

Prices were still falling in some areas of New York, Illinois and Pennsylvania.

In Texas’ big-city markets, the largest quarterly median home sales price increase was in Austin, up 7.9 percent.

The Realtors’ quarterly price data is based just on properties sold through their agents’ multiple listing service. The median prices can be influenced by what types of properties are changing hands, as well as overall changes in values.

Most recent home price studies for North Texas show that prices rose by between 4 percent and 8 percent last year from 2011 levels.