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FHA Announces Price Cuts to Encourage Streamline Refinancing

Millions of FHA borrowers could save average of $3,000 a year

WASHINGTON – Today, Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA’s Streamline Refinance Program that could benefit millions of borrowers whose mortgages are currently insured by FHA. Beginning June 11, 2012, FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.

To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009. Late last month, FHA also announced it will increase its upfront premiums on most other loans by 75 basis points to 1.75 percent. In addition, FHA will raise annual premiums 10 basis points and 35 basis points on mortgages higher than $625,500.

This program should not be confused with the existing CONVENTIONAL HARP refinance program. HARP is ONLY for conventional loans owned by Fannie Mae and Freddie Mac. This program is specifically for FHA loans originated prior to May 31, 2009.

If you currently have an FHA loan that was taken out prior to May 31, 2009 this program could potentially save you thousands of dollars per year. If you are interested in finding out if this applies to you just email me at cal@prostaffmortgage.com and I will help you evaluate the potential benefits of this program for you. The program is not available until June 11, 2012. Contact me early so I can put you on the “interested list” then I will contact you to review current rates and eligibility once the program is released.

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