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Economic News

HUD guidelines are creating misinformation and scare tactics



This evening I received this forwarded email (below). It was from a local lender who sent it out, then it was forwarded to me.

The lender should have read the attached letter (in the email below), Mortgage Letter 2010-28 from FHA, before sending out a scare tactic letter like this. Yes, this is an excellent time for buyers who are considering writing an offer, especially with low interest rates and the upcoming changes to FHA, but please present the facts if you are going to send out letters like this.

This loan officer will not be let loose near my clients. I will continue sending my clients to a loan officer I can trust to tell them exactly what their costs will be. One who has a clear understanding of the FHA guidelines.

Can you imagine how this misinformation could harm a client?

They weren’t qualified for the correct amount and didn’t buy the home they wanted because they thought the payment was too high. Worse yet, they were never given the opportunity to look at a home they would have qualified for.

We are experiencing major changes this year and not just in mortgage financing. It is our job and fiduciary duty to our clients to stay educated about such changes. They are counting on us, especially when they are getting so much news from so many sources. It’s enough to make your head spin.

Please Realtors and lenders, DON’T forward this email!

Email Begins Here————

See attached  letter from US Department of Housing and Urban development

This is bad news.

Today if a person is getting a $100,000 FHA mortgage the up front mortgage insurance is 2.25% or $2250 added on top of the loan.

And the monthly mortgage insurance is .55% annually or $45.83 monthly.

Under the new rules – a $100,000 FHA mortgage would have a 1% or $100,000 or less up front mortgage insurance added to the loan (depending on down payment %)

But the monthly mortgage insurance increases to 1.55% of the original loan annually –
On a $100,000 loan that would be $1550 annually or $129.16 monthly-


This will make it more difficult for people to qualify for a loan.

If you have any buyers thinking about buying using FHA financing – the drop dead date is Oct 1st – we have to pull the FHA case number by that date to be under the

Old rules.   Otherwise – any FHA case # requested on or after Oct 4th, 2010 will go under the new rules.

The buyer must have a signed purchase agreement for us to apply for the FHA case #.   The FHA case # can be gotten in 1 day.

Please keep this in mind for any clients you are currently working with.

Paula is team leader for The "Home to Indy" Team in Indianapolis . She is passionate about education and client care and believes an empowered client is better prepared to make good decisions for themselves. You'll find her online at Agent Genius,Twitter and sharing her insights about her local real estate market at Home To Indy.

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  1. Jeff Belonger

    September 3, 2010 at 12:39 pm

    Paula… wow… first off, I thought maybe this post was about me.. lol Because I knew I had sent you an e-mail with an update on the mortgagee letter and what it means.

    Two things… number 1, yes, this is just bad… it’s aweful and yes, it does feel like a scare tactic to get people to jump high. But the worst thing about this is that this loan officers information is completely wrong. Congress approved the 1.55%, but FHA is only raising it to .85% and .90%

    So this loan officers calculations are 110% incorrect. And it’s sad, because I read a post about this on Active Rain, by a loan officer that stated the same thing in regards to the 1.55%. I wrote to her and to let her know that what she had stated was wrong. You know what her answer was? ” Jeff, thanks for letting me know this. I had tried to find out the correct information before I posted this, but the site was down and I knew that it was as high as 1.55% and after trying a few times, I just submitted this.. but I now have corrected this..” WOW… that to me is just horrible. Hey, don’t get me wrong, I am not perfect and make mistakes. But to tell me that it seemed like she wasn’t 100% sure, couldn’t validate her info, but wanted to get something out to her readers and to the public? Ouch.. rut row.. So I ended up writing about this… here is that post : And I mentioned that people have been putting the wrong information out there.

    Overall, I am glad that you wrote this and that it came from a realtor… thanks

    • Paula Henry

      September 3, 2010 at 4:57 pm

      Jeff – Thanks for your input! I knew you knew the facts! It is sad when industry professionals post incorrect data simply to get something out, without first confirming the facts. When I received this last night, I was first astounded, then angry because our clients deserve better.

      I emailed the agent who forwarded to me to let her know the numbers quoted her were not correct. Hopefully, she will believe me and confirm the facts herself.

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Economic News

Boomers retirement may be the true reason behind the labor shortage

(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.



Older man pictured in cafe with laptop nearby representing boomers retirement.

In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.

Why Boomers are leaving the labor force

CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:

  • Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
  • The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
  • Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.

As Boomers retire, how does this impact the overall labor economy?

According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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