In the hussling and bussling Real Estate market we see here in the North Dallas, Frisco, Plano, and McKinney cities of Collin County, we see every scenario that a Real Estate purchase transaction can throw at us…some good, and some bad. As for the way the FHA Case Number is associated and attached to the property and not the buyer, that too can be good and bad for a transaction.
Many times, the fact that the FHA Case Number stays with the property, it comes back to haunt us. For example, if another “would be” buyer makes an attempt to buy a home with an FHA loan and they get to the point that the lender orders a case number for that property, then that case number stays with that property. If that “would be” buyer ends up not buying the home after this point, maybe because they can’t get approved or they simply changed their mind or whatever, the next lender will likely find out the hard way. The new lender must get that case number signed over or released so that they can have rights to that property and order an appraisal…until that part is completed, the mortgage process must be haulted. This is sometimes tough because the new lender must first have the original lender give a “blessing” to release it, OFFICIALLY…this has it’s own little process that takes a little time sometimes. Essentially, that lengthens the process and the one thing EVERY lender in the state of Texas tries to avoid the most in a purchase transaction is adding more variables that threaten the timeline for closing.
My last McKinney Tx home buyers were pleasantly surprised when we found out that the home they were buying, a foreclosure I might add, had already had a case number ordered. Why, you ask? FHA recently changed their MIP and UPFMIP
amounts and the new values call for a higher monthly mortgage insurance premium, and lesser Up Front Mortgage Insurance Premium. As you can guess, since the UPFMIP (Up Front Mortgage Insurance Premium) can be rolled into the loan, most people are more comfortable paying the lower MIP per month, which is the way it was before. All properties that had FHA Case Numbers ordered on them on or before October the 4th, 2010 were grandfathered back to the old MIP and UPFMIP rates. Again, the old rates called for a monthly MIP that was lower, and an Up Front MIP (able to roll that into the loan) that was higher, where now the monthly MIP causes for a higher monthly payment, but the UPFMIP is smaller. My buyers had made a bid on another property before this one in hopes they would have the ability to be grandfathered, because they liked the old way better than the upcoming new way at the time. They were upset when they found that the this home had a nightmare of work to do on it…they turned down that contract. We, and they, had excepted our fate and they were going to soon find a home and take on a monthly payment higher than what they had expected, due to the increased monthly MIP. We got into the process, and it just so happened that someone else had ordered a casenumber on this property and backed out, BEFORE THE NEW DEADLINE of October 4th. In the end, my buyers got a house they liked better than the first one, AND they were granted the lower monthly MIP that was set before the October 4th change.