FHA MI changes April 18 2011

www.realpro.la On February 14, 2011 a new Mortagee Letter 11-10 was published. The changes announced were regarding the Annual Mortgage Insurance Premium and information regarding how the future of current Case Numbers would be handled. Date: February 14, 2011 To: All Approved Mortgagees Mortgagee Letter 11-10 Subject: Annual Mortgage Insurance Premium Changes and Guidance on Case Numbers Purpose: This Mortgagee Letter introduces a 25 basis point increase to the Annual Mortgage Insurance Premiums for forward mortgage amortization terms. It also provides guidance on the validity period of case numbers and new requirements for requesting them. Effective Date: The increase in Annual Mortgage Insurance Premiums for forward mortgage amortization terms is effective for case numbers assigned on or after April 18, 2011. The new procedures for requesting case numbers are effective on April 18, 2011. Automatic case number cancellation is effective for all case numbers not insured prior to April 18, 2011.

What does all of this mean?

Recent History: On October 4, 2010 the MIP and Annual Mortgage Insurance changed to allow for a lower UpFront Mortgage Insurance Premium (UFMIP) - 2.25% to 1%. However, the Annual Mortgage Insurance Premium increased from .55 to .90.

In effect on April 18, 2011: This chart illustrates the new figures. New UFMIP remains at 1% while the Annual MI is increased on both 30 year and 15 year mortgages.

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