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News and Events

November 3, 2008

ADRE Legislative Update

Effective January 1, 2010, loan originators will begin a relationship with their employers much like that of a real estate agent to a real estate broker. Senate Bill (SB) 1028 mandates that prelicensure school, testing, licensing, fees, and regulations regarding duties and conduct will apply. Continuing education will be required annually when renewing a loan originator's license.

Two additional bills affect lenders. SB 1029 changes the lender license renewal dates to allow Arizona licensees to participate in the Nationwide Mortgage Licensing System (NMLS). NMLS allows states to coordinate with one another so a loan originator with complaints or violations in one state would not be able to simply move to a new state and have a clean record.

House Bill (HB) 2587 prohibits a lender from lending unless steps are taken to verify the consumer's identity. If a person's identity is stolen and his or her identity is then used to commit crime or results in a judgment against the person, HB 2321 establishes a process where a person can obtain a court order stating he or she is innocent. This law goes into effect on January 1, 2009.

For more detailed information on the above pieces of legislation, please go to ADRE's Web site.

August 4, 2008

What is the purpose of the new federal housing bill?

Last week, President Bush signed the new housing bill into effect. Here are a few of the major financing changes:

A ban on down payment assistance from sellers:

  • The new law eliminates a program that has allowed sellers to provide down payment assistance for FHA loans.
  • The law also increases the down payment requirement for borrowers getting FHA loans to 3.5% of the purchase price of the home, up from 3%.

A permanent increase in “conforming loan” limits:

  • The law will permanently increase the cap on the size of mortgages guaranteed by Fannie Mae and Freddie Mac to a maximum of $625,500, up from $417,000.
  • The FHA maximum loan limits for high-cost areas also increase to a maximum of $625,500.
  • Higher loan limits will make it easier for borrowers to get mortgages because those mortgages are more likely to be traded if they are considered conforming.

A new home buyer credit:

  • The new law includes a tax refund for first-time home buyers worth up to 10% of a home’s purchase price but no more than $7,500.
  • The refund serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.

July 8, 2008

The Reality of FHA

The new reality is that FHA modernization, in addition to increased FHA loan limits, is designed to help Realtors & Mortgage Brokers do what they do best – put people into homes.

Consider that:

– 100% financing options are becoming a thing of the past, and FHA is becoming a major player for people
buying a home or refinancing an existing one.

– The homebuyer tax credit will attract active purchasers to the market and help stabilize housing prices.

– It is projected that the FHA marketshare of new home loans will increase fivefold between 2007 and 2009.

– Many Realtors are stuck thinking of the FHA of old - but FHA has streamlined its application process, and eliminated the requirement for a separate inspection. If you use a qualified FHA lender, processing an FHA loan is comparable to a conventional loan.

– Even if your community is not a high cost area, raising the FHA and GSE loan limits will provide liquidity in the market and make mortgage money more available and affordable to borrowers nationwide.