FHA Mortgage Insurance Changes Postponed…as most of you should already know by now, FHA just a few weeks ago announced that they were following through with part two of their “overhaul plan” first unveiled in early Spring 2010. To increase the mortgage insurance requirement for ALL new FHA loans! Initially, the date of September 7^th was the roll-out…now a new date, October 4, 2010, will begin the implementation of the new FHA premiums. In summary, here are the changes:

Upfront Mortgage Insurance Premium – reduced to 1.00% from the current 2.25% (ALL loans)

Monthly Mortgage Insurance – LTVs > 95% (which with the down payment of 3.5%, most

new FHA Loans meet this threshold), monthly factor will increase from the current 0.55 to 0.90

Ex. $225,000 loan amount…monthly MI will rise from $99.52/month to $162.84/month…

a $63.32 monthly payment increase!! Again, a critical reason enough to beat the Oct. 4^th date!!!

· FHLB Funds STILL Available but NOT for too much longer…as one of the few local Community Banks that offer this Federal Grant, Carrollton is always the first to run out of funds. To date, we are about 85% - 90% through our allocated funds. The Grant Program has been a big hit during the summer months! A reminder…First-time Homebuyers (FTHB) can receive up to $7,500 to be used for Down Payment and/or Closing Costs. Each bank is provided $1M and it is first come, first serve! Funds typically are depleted by early September so tell your Prospective FTHB to move quickly…call me now to determine their eligibility!!

· CDA Grant $$$ Keeps Getting Better!...the Maryland State-funded grant program which can be used in conjunction with other down payment assistance programs i.e. FHLB have increased their assistance amount. The DSELP program provides up to $5,000 to qualified FTHB! In addition, the House Keys 4 Employees & Smart Keys Program can offer more funds!! These are employer specific programs. Example: $7,500 FHLB + $5,000 CDA/DSELP = $12,500 for buying a home this weekend… AND if that isn’t incentive enough…get this…CDA has once again lowered their rate to 4.25% for a 30-year fixed product! Income limits are extremely liberal…up to $98,600 for household size of 1-2 and $115K 3+!!

OH AND HAVE TO ADD…CARROLLTON BANK IS A DELEGATED CDA LENDER MEANING WE HANDLE THE ENTIRE PROCESS IN-HOUSE! WE ARE THE NUMBER #2 CDA LENDER IN THE STATE OF MD!!

· Undisclosed Credit & Inquiries…with new policies in place, Underwriters now are required to pull credit reports on all borrowers up to the day prior to closing of the loan. This is to ensure that all applicants STILL qualify for the loan. EVEN IF APPROVAL/LOAN COMMITMENT HAS ALREADY BEEN ISSUED! If it is determined that new credit or inquiries have been established, the loan may have to go back to underwriting and therefore, delay settlement. Be sure to stress to your Clients that they MUST NOT think about applying for credit i.e. buying furniture or items for their new home without consulting with the Lender. Eleventh Hour verifications are becoming the norm especially with the job market being what it is!

Mortgage Rates for Various Financing Strategies*

Rates for the weekend of August 14, 2010 (check out the 5-Year ARM for your short-term Buyers…WOW!)

As a Community Bank, Carrollton’s rates are the lowest around….I can Guarantee that…and always NO POINTS!!

*Rates are subject to change without notice due to market fluctuations and borrower's eligibility.