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Many Oregon Homes Remain Underwater; FHA Streamline Refinance Available Statewide

By: Michael Foster | November 27th, 2012

Property values in Eugene, Oregon are rising faster than most markets in the city as it rebounds from record lows in the aftermath of the sub-prime mortgage crisis. Thanks in part to housing demand tied to the University of Oregon’s campus in the city, Eugene is seeing double-digit rises in home prices, with economists forecasting home values will rise by 12.4% throughout 2013. Despite this increase in Eugene, the FHA streamline refinance is still available statewide for the many Oregon homes that remain underwater.

Several parts of Oregon continue to see depressed home prices and thousands of homeowners statewide are still underwater on their homes. Jackson County is one of the hardest hit regions in the country, with 39% of homeowners underwater. In the most extreme cases, homeowners find that they owe more than twice as much on their houses relative to the fair-market value of the property.

While there are several headaches involved in having an underwater property, perhaps the most stressful is the inability to refinance existing mortgages. With home values lower than the amount owed, it is impossible to refinance a loan through a conventional mortgage. This has led to millions of homeowners nationwide unable to refinance high mortgages in place, despite record-low rates available on new and refinanced mortgages.
However, homeowners with an FHA mortgage can qualify for a mortgage no matter how much they owe on their property or how much their homes are worth. This is possible through an FHA Streamline home loan, which does not require a house appraisal since there is no limit to how much your home can be worth–any home with any loan-to-value ratio qualifies, as long as it is currently financed by an existing FHA loan. This is possible with FHA loans where the applicant pays for closing costs out of pocket or, in some cases, those who pay a premium for lender paid closing costs. Homeowners who want to roll the closing costs into the loan can do so with an appraised FHA streamline loan, and the loans can only be made at an LTV ratio below 100%.

Homeowners can also qualify for FHA streamline mortgages if they have made every mortgage payment on time over the past year and they have owned the property for at least six months. Since the FHA loan is designed for homeowners with existing FHA loans, this means that the FHA streamline process has been designed to be swift and seamless, so borrowers may find that they are approved for an FHA streamline loan much faster than applicants can qualify for other types of loans.

The largest benefit to an FHA streamline refinance is that it can lower loan payments, in many cases by several hundred dollars per month. This is thanks to record-low mortgage rates currently available on the market, but homeowners will find that they save even more thanks to lower FHA insurance premiums. Annual mortgage insurance premiums have been lowered to 0.55%, meaning that homeowners will pay just $83.33 per month on mortgage insurance for every $100,000 borrowed, and upfront mortgage insurance premiums have been reduced to .01%. These reduced premiums are available for those who have loans that were endorsed prior to June 1, 2009.

To find an FHA approved lender, FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at about a 1 point origination fee.


Latest HARP Mortgage News March 30th, 2014