FHA Insurance Premium Changes

by Michael Shohoney September 2, 2010 06:10

Yesterday HUD announced (Mortgageee Letter 2010-28) that the premium factors for FHA mortgage insurance will change for loans where the case number is assigned on or before October 4, 2010.  The upfront premium factors are lower while the annual renewal factors are higher.  The new premium factors are:

Upfront Premium Factor--100 Basis Points (i.e. 1.0)

Annual Renewal Factors for loans with a term greater than 15 years--LTV equal to or less than 95%, 85 Basis Points (i.e. 0.85).  LTV greater than 95%, 90 Basis Points (i.e. 0.9)

Annual Renewal Factors for loans with a term equal to or less than 15 years--LTV equal to or less than 90%, No renewal premium.  LTV greater than 90%, 25 Basis Points (i.e. 0.25)

 Additionally, the premium factors for the HECM (Home Equity Conversion Mortgage) program have changed as well.  The new factors for these reverse mortgages are:

Upfront Premium Factor--200 Basis Points (i.e. 2.0)

Annual Renewal Factor--125 Basis Points (i.e. 1.25)

 Since the ZMath Engine, ZMath, eZMath, ZMathReverse and eZMathReverse products all allow the user to enter the insurance factors for all products, a change is not required to your software.  However, changes are required for your inputs (however you may handle that).  Be sure to begin to use the correct premium factors for all loans whose case number assignment occurs on or before October 4, 2010.

 As always, we are here to help.  If you have problems or questions regarding these changes and how it will affect your system(s), please do not hesitate to contact us.

New HECM Principal Limit Factors

by Michael Shohoney September 28, 2009 10:13
Late on Wednesday, September 23, HUD announced that there was a new factor table that was to be used for all HECM loans with a case number assigned on or after October 1, 2009.  Math Corporation began implementing the new factors Thursday morning and on Friday, September 25 at 2:00 CDT released ZMathReverse with both new and old factors incorporated.  Our eZMathReverse will be updated later this week to incorporate the changes.  If these changes affect you, please notify us and we will get the new version of the component to you.

FHA LTV Cutoff Confusion

by Michael Shohoney February 10, 2009 09:17
Lately we've fielded a lot of calls and emails questioning where the ZMath Engine, eZMath and ZMath cutoff FHA MIP premiums.  Universally, the inquirer states that we are cutting off the MIP too early.  Invariably what is going on is that there is financed premium involved.  For that reason, the calculation of the cutoff is not as straight forward as calculatiing the percentage of the loan's balance and looking at the amortization schedule for that balance.  No, the calculation is quite a bit more involved than that.  Apparently, there are a few LOS and underwriting systems out there that do not do this correctly!  For that reason, we will not go into the specifics of the correct calculation.  Rest assured, we have it correct here in all of our software.  So, if you're questioning your results, contact us and we will share with you why we are right and why your other system is falling short or should we say long of the correct result!