Feds to Eliminate 'Post Payment' Interest Charges
The Federal Housing Administration announced that borrowers who prepay their FHA-insured mortgages will not have to make interest payments beyond the date their mortgage is paid in full.
In a statement, the FHA said that its rule, Handling Prepayments: Eliminating Post-Payment Interest Charges, applies for FHA-insured mortgages closed on or after January 21, 2015. This rule explicitly prohibits lenders from charging borrowers post settlement interest, which is broadly defined as a “prepayment penalty” by the Consumer Financial Protection Bureau (CFPB), for all FHA Single Family mortgage products and programs.
In addition, FHA announced a new rule to ensure borrowers have early access to information when making decisions about their FHA mortgages. Effective for FHA-insured Adjustable Rate Mortgages (ARMs) originated on or after January 10, 2015, this rule makes two revisions to FHA’s ARM Program. It requires lenders:
- To provide borrowers of FHA-insured ARMs with at least a 60-day but no more than 120-day advance notice of an adjustment to their monthly payment. FHA currently requires a 25-day advance notice.
- To base an interest rate adjustment that results in a corresponding change to the borrower’s monthly payment on the most recent index value available 45 days before the date of the rate adjustment (commonly referred to as a “look back period”). FHA currently requires a 30-day look-back period.
Together, these new rules are responsive to the regulations implementing the Truth-in-Lending Act (Regulation Z) as revised last year by the CFPB. These policies provide consistent protections for borrowers with FHA-insured mortgages, while ensuring borrowers have early access to information when making decisions about their FHA mortgages.
As property buyers and investors gain more confidence in the market, real estate agents can boost their listings and their reputation by taking advantage of technologies developed by Fort Lauderdale, Florida company RealBiz Media Group, Inc. (OTCQB: RBIZ). RealBiz Media has developed a range of disruptive online marketing tools centered on videos and virtual tours to help agents market their listings.
Its Microvideo App platform is an enterprise platform for both real estate agents and brokers for the creation of microsites that point to their websites and listings, and virtual tours that showcase properties to a wider customer base. The platform also features a data analytics dashboard where agents can identify new real estate leadsand monitor the progress of their campaigns.
Realbiz Media also owns consumer site Nestbuilder.com which serves home to 1.6 million listings. The website features a video marketing platform called Nestbuilder Agent where agents can create virtual tours of their property listings, an online video profile, and informative how-to videos that they can use to build their authority in the industry.
Over 350,000 agents have signed up for an account on Nestbuilder.com since it went live this year.
Agents from big-name real estate companies like Keller Williams, Era Real Estate, Century 21, and Prudential Select Properties depend on Realbiz Media’s virtual tour platforms to further their campaigns.
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Meanwhile, the U.S housing startsrose sharply in July indicating that what appears to be a stunted recovery for the local housing market is now “back on track,” according to a report on CNBC Wednesday.
According to data from the Commerce Department, housing starts were up by 15.7 percent reaching a seasonally adjusted 1.09 million units and revising a two-month downward trend. Housing starts in June were 893,000, down by 9.3 percent from May data. The jump was 21.7 percent higher than housing starts in July 2013.
Single-family housing starts last month reached 656,000, representing an 8.3 percent growth from revised June figures of 606,000. Multi-family homes meanwhile reached 423,000.
The report said that the housing market suffered this year after a sudden surge in interest rates last year. Lower inventories also pushed prices higher, pricing out first-time buyers.
It added that homeownership rates were down to a record 19-year low, according to government reports. Rental vacancy rates were also at its “lowest in more than 19 years,” it said.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.