Up, Down, Backward & Forward. We are constantly being flipped around by the Mortgage Roller Coaster.

This morning we can envision Turn 8 on the FHA Coaster (or is it turn 100?). As of October 1st, 2008 there will be yet another UFMIP/MMI Schedule in place for us to learn.

For purchases/refinances (non-streamline) the new UFMIP for ALL loans will be 1.75%  this is for all terms.
For Purchases/Refinances (all) the Monthly MI will be:
.50% for LTV <95%
.55% for LTV >95%

Streamline refinances (soon to be your newest channel of profitability) will carry a renewal UFMIP of 1.50%

All of this steams from the "alleviation" or moratorium on Risk Based Pricing. Part of HR3221 was to put off the risk based schedule for a period of 12 months.
We've been working with the risk based schedule as of 7-14-08.
Any CASE # assigned AFTER 10-1-08 will REQUIRE the new UFMIP Schedule be honored.
For those case numbers issued from 7-14-08 up to 9-30-08 you will need to use the existing schedule.

Head spinning yet? You should know that HUD feels that Risk Based Pricing (ala FNMA/FHLMC) is a competitive and pragmatic maneuver that is a necessary step for continued profitable operation going forward.
Hopefully we can now settle into the guide lines we've been given and continue originating FHA loans with fewer changes in the next 12 months.

Download the letter from HUD/Brian Montgomery here: