I have been doing FHA mortgages for a long time. I have advocated for this type of financing for many of my clients, as it was the best solution for them, especially for first time home buyers.
FHA will soon not allow a homeowner to cancel the monthly mortgage insurance after a certain time period and once they had a 22% equity position in their home. Those days will be over shortly. Once they have mortgage insurance, you are stuck with it, unless you sell or refinance. Why should the consumer have to make either decision, to get out from under the monthly mortgage insurance?
I am not saying that I will never do another FHA loan, but nowhere near as many as I used to do. If FHA is working toward rebuilding its reserves, how do they accomplish that, by doing much less business?
This article, FHA to tighten underwriting, raise premiums, By Inman News provides the details on the new changes to FHA.
"Although I have been following this story for a while, it is now going to be reality starting in March. Here is the deal, if you have a mortgage owned by Fannie or Freddie, current on the mortgage payments, under certain circumstances, you can walk away from the debt and once again, the taxpayer picks up the tab." And yet today, you think it's wrong that Fannie and Freddie would try to remain insured against bad mortgages. I guess this is bad because it might cut into your profits. Definitely a poster boy for the Republican party - they would be very proud of you.