Ohio FHA Streamline Refinances saw a major change on June 11th, allowing homeowners with an FHA loan that was endorsed by HUD prior to May 31, 2009 to refinance into a new FHA mortgage with minimal mortgage insurance requirements.
Many in the mortgage industry thought this would be a major help to homeowners that couldn’t take advantage of the Streamline program due to increased mortgage insurance requirements. However, just a few days after these guidelines were updated lenders seem to be putting the brakes on the new program.
Just one day after the new guidelines took effect Wells Fargo had already sent out a memo that they would only accept new FHA Streamline Refinances that they already serviced, keeping it in-house. So whats the big deal? Wells Fargo originates 34% of all mortgages and services 17.7% of all mortgages in the U.S. So when Wells Fargo talks, the industry listens.
I recently spoke to a loan originator with GMAC, who informed me that sometime between the new FHA Streamline guidelines were announced (March 6, 2012) and they went into place (June 11, 2012) that GMAC ceased originating them all together, even for their own customers.
10 Days after the guidelines went into effect, and I am seeing memo after memo coming from different lenders either delaying underwriting times, or adding rate “bumps” on FHA Streamlines. The repercussions are wide-spread, and the end result will be delays in financing and quite possibly less competition. This all leads to a worse deal for the consumer.
US Bank (the #3 in volume in the 1st quarter of 2012) has also stopped offering FHA Streamline Refinances except to existing US Bank Home Mortgage customers. Stearns is still accepting FHA Streamlines, but has added a 1.00% Loan Level Price Adjustment (LLPA), which translates to an additional 1% (of the loan amount) in closing costs.
I would strongly suggest that homeowners who are interested in an FHA Streamline Refinance start shopping today, because tomorrow there may very well be another lender that isn’t accepting them. If you would like to request a Rate Quote for an Ohio FHA Streamline Refinance head over and complete my simple FREE INTEREST RATE QUOTE.
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